Sturgeon handed solution to ‘balance books’ after Scottish independence: ‘Mutual interest’

Sturgeon handed solution to ‘balance books’ after Scottish independence: ‘Mutual interest’

The leader of the SNP made her intentions to hold a second vote on independence clear to Prime Minister Boris Johnson after securing a fourth consecutive victory in the Scottish election in May. She claimed it “is the will of the country” and warned Prime Minister Boris Johnson against “picking a fight with the democratic wishes of the Scottish people”. In May the London School of Economics and Political Science (LSE) reported that it would hit the Scottish economy “two to three times” harder than Brexit.

But experts at Edinburgh Napier University may have found a way for Mrs Sturgeon to “balance the books”.

Energy formed a key part of the first independence battle as Scotland boasts one of the most favourable conditions in Europe for harvesting wind energy.

In their piece in the Conversation, economists Piotr Marek Jaworski and Kenny Crossan noted: “One major problem is the EU fiscal rules, which require a general budget deficit of no more than three percent of GDP per member (this is temporarily suspended because of COVID).

“In 2019-20, Scotland’s deficit amounted to 6.9 percent if North Sea oil revenues are included (or 7.5 percent without it). This was a considerable improvement on earlier years, but still well above the threshold – and that was before the pandemic.

“Now UK borrowing is hitting record highs and the Institute for Fiscal Studies thinks Scotland’s effective deficit will have reached close to 30 percent in 2020-21. 

“Any analysis of independence economics should therefore start by asking whether an independent Scotland could balance the books by increasing revenues and decreasing spending and how willing Scottish society would be to potentially make sacrifices.”

The pair pointed out how the European Regional Development Fund (ERDF) may “be of assistance,” adding that it could “potentially ease the transition for the nation’s public finances”.

They said: “Green energy would be of particular mutual interest to Scotland and the EU, especially wind power, for which Scotland has the most favourable conditions in Europe. 

“Scotland’s accession would be valuable to help the EU meet its goal of climate neutrality by 2050.

READ MORE: Sturgeon’s independence would cost Scotland ‘up to three times’ more than Brexit

“The EU member with the highest green energy consumption is Sweden, with less than 60% percent The EU total is only around 20 percent, so Scotland would immediately raise this share.

Any increase in Scotland’s wind energy production could also be diverted to supply the EU with green energy, further increasing its overall share. 

“Yes there are limitations with the electrical interconnectors, but EU finance could be used to expand them.”

Published at Wed, 21 Jul 2021 20:35:00 +0000