The chocolate teapot

The UK Trident programme encompasses the development, procurement and operation of the current generation of British nuclear weapons, and the means to deliver them. It was announced in July 1980 and patrols began in December 1994. Its stated purpose is to provide “the minimum effective nuclear deterrent as the ultimate means to deter the most extreme threat”.

It has also been described by former Vulcan squadron commander (the UKs original nuclear deterrent) and current vice-president of CND, Air Commodore Alastair Mackie, as Britain’s “stick-on hairy chest”.

choctea1

And yet other than “We should/shouldn’t get rid of it”, it’s rarely the subject of any serious debate or investigation. And as it’s the summer close season for politics, this seemed like a good time.

We know that it costs Scotland £163 million in running costs each and every year. We also know that only 520 civilian jobs at Faslane and Coulport (formally and collectively called Her Majesty’s Naval Base Clyde) near Helensburgh are directly dependent on Trident, despite claims by various Labour politicians that the system supports up to 22,000 jobs.

Of those 520 jobs, 159 are employed by the MoD and 361 by contractors Babcock Marine and Lockheed Martin. The remaining jobs cited by the No campaign are based on the military and security personnel present on the base for standard duties, but even here it’s estimated that 85% of base personnel do not live locally but travel south when not on duty, thereby contributing little to the local economy.

However as alert readers may recall, Faslane is intended as the home base of the Scottish Navy and as such the base, its personnel and associated economic benefits would remain active post-independence; with the main difference being the switch to a conventional defence role rather than nuclear deterrence.

But what exactly is Trident, what does it do, and how does it do it?

Trident is a submarine-launched ballistic missile (SLBM) equipped with multiple independently targetable re-entry vehicles (MIRV). The Fleet Ballistic Missile (FBM) is armed with nuclear warheads and is launched from nuclear-powered ballistic missile submarines (SSBNs, which if you were scratching your heads as we were actually stands for “Ship, Submersible, Ballistic, Nuclear”).

The UK system is based on the operation of four Vanguard-class submarines: Vanguard, Victorious, Vigilant and the tellingly-named Vengeance. At least one submarine is always on patrol to provide a continuous at-sea deterrent; with the others scheduled to maintenance, leave or training.

Each is armed with Trident II D-5 ballistic missiles (built by Lockheed Martin Space Systems in Sunnyvale, California); which is a three-stage rocket, each stage containing a solid propellant motor. Each missile is able to deliver thermonuclear warheads from multiple independent re-entry vehicles up to 7,840km away if fully loaded, or 11,300km if carrying a reduced load (coincidentally the exact distance between Glasgow and Buenos Aires in Argentina).

Since 1998, Trident has been the only British nuclear weapon system in service, following the retirement of the WE.177 tactical nuclear weapon (below).

choctea2

Vanguard-class submarines can carry up to sixteen missiles with a maximum of twelve warheads per missile (192 warheads in total), with each warhead having a yield of 100 kilotons (kt). However under the terms of the UK 2010 Strategic Defence and Security Review, each Vanguard boat is only armed with a maximum of eight missiles and forty warheads (five per missile).

At over six times more powerful than the bomb which destroyed Hiroshima, each warhead is more than capable of causing immense damage, yet is still significantly smaller than the warheads on the R-36M (SS-18) ICBM deployed by Russia, which can carry up to ten 750kt warheads per missile or alternatively one massive 20 megaton warhead (20,000kt – equivalent to 1,250 Hiroshima bombs).

The high American content means that the system is not in reality independent. According to a US diplomatic telegram released by WikiLeaks, President Obama handed over the unique serial numbers of the UK’s missiles to the Russians as part of an arms reduction deal, despite the strong objections by the UK Government. As a result the Russians now know exactly what the UK has and what it can do.

The UK government maintains that the warheads used in the Trident system are “designed and manufactured in the UK at the Atomic Weapons Establishment (AWE), Aldermaston“. The final warheads have been assembled at the AWE facilities near Aldermaston since 1992, and are transported to the Royal Naval Armaments Depot (RNAD) Coulport in Argyll (part of HMNB Clyde) storage facility by overland convoys.

Trident is ostensibly designed to be used in three possible ways:-

  • First Strike – A pre-emptive attack that annihilates the enemy outright, hopefully before they have a chance to retaliate.
  • Counterforce – A pre-emptive attack that targets the enemy’s military and thereby disarms them by destroying their capability to fight.
  • Second Strike – Primarily as deterrence, by threatening their use in retaliation should an enemy attack the UK with nuclear weapons first. This is the MAD principle (Mutually Assured Destruction) and was the basis for the Cold War nuclear strategy of the USA, UK and other allies

However there are numerous issues with each of these proposed uses.

Strategy 1 – First Strike

choctea3

The tiny red dots on the map above are all the damage that Trident can inflict on Russia, based on the present eight-missile, 40-warhead load-out and the single operational submarine at any given moment.

But even then it’s not clear Trident’s missiles would hit their targets in the first place, as the Russians have an anti-ballistic missile defence system called the ABM-3 Gazelle, designed in the 1980s for the Cold War but which only came into service in 1995.

The ABM-3 Gazelle program has around 50 missiles that carry a single 10kt nuclear warhead which travel at speeds of Mach 17 (about 3.4 miles per second) and act as a shield up to a radius of 100km. They’re designed to track incoming nuclear MIRVs, get close and then detonate, hopefully destroying the incoming threat. Only Russia and the United States have this defensive capability.

The degree to which Trident could operate as a successful first-strike system, then – certainly against a large country like Russia – is zero. Russia has far more than 40 military targets which would have to be taken out for a first-strike victory, even assuming every warhead hit its target (some of which are very small or even mobile). All it could achieve would be to get the Russians really, REALLY angry.

Strategy 2 – Counterforce

In nuclear strategy, a counterforce target is one that has a military value, such as a launch silo for ICBMs, an airbase at which nuclear-armed bombers are stationed, a homeport for ballistic missile submarines, or a command and control installation. The intent of a counterforce strategy is to disarm an adversary by destroying its nuclear weapons before they can be launched, thereby minimizing the impact of a retaliatory second strike.

This is a task for which Trident is even more poorly suited.

choctea5

Firstly, the Russian Strategic Rocket Forces are estimated to have 311 operational missile systems, including missiles that can carry 1078 warheads. These include 185 silo-based and 126 road-mobile ICBM missiles like the Topol-M ICBM.

The Topol-M is a silo- and mobile-based ICBM put into service in 1998. The missile has a range of 10,500km – easily capable of hitting the UK from almost anywhere in Russia – and carries a single 550kt warhead. They are designed to be mobile to avoid detection and destruction in the event of a first strike or counterforce situation.

Secondly, the Russian strategic fleet includes seven SSBNs that can carry 112 missiles with nuclear warheads. Five of the submarines are based in the Northern Fleet with the other two based out of the Pacific Fleet base.

Just like the Trident system they’re designed to be on constant patrol, avoid detection and initiate a first strike, counterforce or second strike on an enemy. Once out to sea they’re essentially undetectable.

Thirdly, Russian strategic aviation consists of 66 bombers that carry an estimated 200 long-range cruise missiles and bombs. In order to neutralise these threats, the air bases would need destroyed before any plane could get airborne, which with advanced Russian early warning systems is unlikely.

So again, the problem for Trident is that there simply isn’t anywhere near enough of it to target all of Russia’s nuclear arsenal. In addition it can’t track the mobile parts, meaning that the missiles in silos and bombers would be able to get airborne and exact their retaliation on the UK.

Strategy 3 – Second Strike

A second-strike capability is a country’s assured ability to respond to a nuclear attack with powerful nuclear retaliation against the attacker. For the UK this is Trident, hidden below the Atlantic waters 365 days a year waiting to launch.

choctea6

To have such an ability (and to convince your opponent of its viability) is considered vital in nuclear deterrence, as otherwise the other side might be tempted to try to win a nuclear war in one massive first strike against your nuclear forces.

Mutual Assured Destruction (MAD) is a doctrine of military strategy and national security policy in which a full-scale use of high-yield weapons of mass destruction by two or more opposing sides would cause the complete annihilation of both the attacker and the defender.

It’s based on the theory of deterrence where the threat of using strong weapons against the enemy prevents the enemy’s use of those same weapons. The strategy is a form of Nash equilibrium (better known as a Mexican stand-off) in which neither side, once armed, has any incentive to initiate a conflict or to disarm.

However as we’ve already seen, the destructive force of Trident is not sufficient to ensure total annihilation of the enemy. But more crucially for Trident is the fact that unlike the Russians, it’s our only nuclear force, and there’s only ever one active sub, meaning the entire deterrent could be compromised by the loss of a single vessel.

In 2010 an adapted Russian Akula class submarine was caught trying to record the acoustic signature made by the Vanguard submarines in order to allow the Russians to track the Vanguard’s location. At the time the Navy commanders ordered a Trafalgar-class hunter-killer submarine to protect the Vanguard, with a senior Navy commander reporting to the Telegraph that:

“The Russians have been playing games with us, the Americans and French in the North Atlantic. We have put a lot of resources into protecting Trident because we cannot afford by any stretch to let the Russians learn the acoustic profile of one of our bombers as that would compromise the deterrent.”

So on a standalone basis Trident is insufficiently powerful to uphold the MAD principle, is vulnerable to attack, and in any second strike scenario would almost certainly be retaliating pointlessly against the enemy long after the population of the UK has gone up in smoke.

It’s therefore difficult to escape the conclusion that Trident doesn’t meet the needs of any of the three strategies for nuclear weapons. In fact, only through NATO – with the United States providing the main nuclear deterrence – has MAD ever been viable, and Trident makes no difference whatsoever to MAD, its piddly 40 warheads an insignificant contribution alongside the American stockpile of almost 8,000.

So given that Trident can’t be effective as a standalone deterrent and is incorporated into a NATO system that would work just as well without it, why do we need it? Wouldn’t the UK be better off transferring the money to conventional defence and providing more support to NATO in a conventional role?

It’s a question that’s cropped up before. Last year the New York Times claimed that:

“While the United States would like to be able to rely more on its European allies, many experts doubt that even the strongest among them, Britain and France, could carry out their part of another Libya operation now, and certainly not in a few years”

“The situation in Britain is so bad that American officials are quietly urging it to drop its expensive nuclear deterrent”

Before quoting a senior American official as saying:

“They can’t afford Trident and they need to confront the choice: either they can be a nuclear power and nothing else or a real military partner.”

And this line of thinking isn’t new either, with the US having called for the UK to ditch Trident as far back as 1995. Interestingly, at the time the UK government regarded 96 warheads per submarine as the “minimum credible deterrent”, yet each boat now carries a maximum of well under half that number – suggesting that it’s nowhere near a credible deterrent now, if it ever was.

Trident is a chocolate teapot: completely useless for the purpose intended, and more likely to see the user burned should it ever be utilised. It’s an unaffordable folly, openly acknowledged as such by both Tony Blair and former UK defence secretary Michael Portillo, yet all three Westminster parties are committed to not only retaining it but upgrading it, at a cost of tens of billions of pounds Britain just can’t spare.

September 18 is Scotland’s only chance to release itself from this madness.

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Source: Wing Over Scotland

The best of all possible worlds


The best of all possible worlds


http://wingsoverscotland.com/the-best-of-all-possible-worlds/?utm_source=rss&utm_medium=rss&utm_campaign=the-best-of-all-possible-worlds
Source: Wing Over Scotland

Scotland’s global festivals boost Scotland’s wealth

Scotland’s global festivals boost Scotland’s wealth






Edinburgh-Street-performer-2011-Royal-Mile-8-630x310For those who live in Scotland’s biggest cities, this fortnight is like no other.  Visit Scotland estimated that Glasgow welcomed 390,000 people on the ‘Super Sunday’ of the Commonwealth Games. And of course this week the fringe kicks off in the capital.  Has there ever been a more buoyant festival feeling in Scotland? It also has an important economic impact that improve’s Scotland’s wealth as a country

The Edinburgh festival is the largest arts festival in the world. Last year there were 45,464 performances in total with thousands of shows across the city.

This is a prominent example of the cultural contribution to the social and economic vitality of Scotland. In financial terms, research suggested that £2.8 billion was added to Scotland’s economy in 2011 from the creative sector. (Table 2.2)

Culture is about so much more than its monetary value. Scotland’s literature, art, theatre, design, music and many other creative fields are part of a vibrant public life. Scotland’s history, natural buildings and museums all contribute to the story of Scotland. That in many ways is more important than any profit, added value or tourist incentive. It is the community impact that is being closely analysed in regards to the legacy of the Commonwealth Games.

Scotland’s strong cultural sector

However, within any consideration of Scotland’s finances it would be short sighted to ignore the economic benefits of a successful cultural sector.

For international and domestic tourists it is the mixture of events, sites and performances that encourages visits to Scotland.

To take the largest cities, Glasgow has a global reputation as a location for live music and performance. Edinburgh plays host to a number of renowned festivals each year including the Edinburgh International Film Festival, Edinburgh International Book Festival, Edinburgh Jazz Festival, and the Edinburgh International Festival.

_70202985_hydroone

Major music, conference and arts centres are key locations across Scotland’s from Dundee Contemporary Arts and Fat Sam’s, Aberdeen Arts Centre and Aberdeen Exhibition and Conference Centre, Bogbain Farm in Inverness or Perth’s Conference Centre. New venues like the 13,000 capacity Hydro in Glasgow have substantial impacts on city and regional economies due to knock-on-impacts in the hospitality and hotel sectors.

The Scotland’s festivals guide to 2014 includes over 350 events spread across the country, many of which are held away from Scotland’s urban centres.

Scotland also has 360 museums and galleries which attract approximately 25 million visitors a year, which generates over £80 million for Scotland’s economy.

Cultural business

The cultural sector has witnessed business start ups in music, publishing, theatre and design. Scotland’s music venues remain packed with local bands and promoters. The publishing sector has witnessed the rise of groups such as Luath Press, Cargo Publishing and the continued success of Canongate Books, who all regularly produce authors from Scotland. Theatre set-ups like Play, a Pie and a Pint have showcased work from Scotland that has since travelled world wide.

So the cultural sector has a vibrant business element. It provides opportunities to share ideas and showcase Scotland to the world. Long-term, it’s independence that ensures Scotland’s prominence on the world stage.

Conclusion

In the referendum cultural and festivals are an important part of Scotland’s wealth. As Business for Scotland stated previously:

“Scotland’s economy includes £21.4 billion in construction which employs 170,000 people, £11.6 billion in tourism which supports 292,000 jobs, £39 billion yearly turnover in manufacturing with a value added of £12.7 billion and 127,000 people employed. Scotland also has world leading expertise in life science,world class universities (5 in the world’s top 200), a multi-billion pound creative sector and vast energy (oil, gas, tidal, wave, wind and solar), fishing and agricultural resources.”

Scotland is a wealthy nation and the success of Scotland’s cultural sector makes an important contribution to that overall prosperity.

With the referendum approaching, that fact can put a spring in our steps as the parties continue.

Join Business for Scotland – Sign the business declaration

Visit our Resource Section for more information.




Tags: ‘featured’

Category: Economic Strengths, Economics of Independence, Prosperity


http://www.businessforscotland.co.uk/scotlands-global-festivals-boost-scotlands-wealth/
Original Source: BusinessForScotland

The times they have a-changed


The times they have a-changed


Does anyone know if Alistair Darling (left, with banner) is still a republican?

republicandarling

He doesn’t seem to talk about it much these days.

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Source: Wing Over Scotland

The case of the missing billions

Readers of this site may remember the story published on the BBC earlier this week, where the figures for GDP per capita miraculously switched overnight from showing Scotland as a net contributor to the UK to implying that Scotland was a net recipient.

bbcstats

And after reviewing the data posted by the BBC, it appears that the export figures have also been massaged to imply that Scotland exports vastly less than it does in reality.

The figures quoted are cited as coming from the Office for National Statistics, and claim that Scotland exports only £16.9 billion of goods and services. But does it?

Scotland’s exports are mainly based around:

  • Food and beverages
  • Chemicals
  • Business services
  • Electronics and instrument engineering
  • Mechanical engineering
  • Textiles
  • Oil & gas
  • Fuel-based equipment
  • Renewable energies, equipment and technology

And our top export markets are:

  • rUK
  • USA
  • Netherlands
  • France
  • Germany

The Scottish Government already collates all the information relating to these exports and the Financial Times has already done all the legwork to analyse what it means.

Back in January of this year an article entitled “Scots exports would be worth almost £100bn after independence” set out the figures for Scottish exports based on the Scottish Government’s Global Connections Survey, and notes how an independent Scotland would be among the world’s top 35 biggest exporters.

“The estimate of Scotland’s 2012 exports lays out in stark terms the strength of Scotland’s economic ties with the UK. It shows that £47.6bn of a total £73.6bn in non-oil exports of goods and services, and almost half of its oil and gas exports, were to the rest of the UK.”

In fact in 2012, Scottish oil and gas exports alone came to over £24.4bn, with the rest of the export trade bringing the overall total to £98.1bn.

So how is it that the BBC is reporting Scotland’s economy as only exporting £16.9bn? The trick the BBC appears to have employed is to take the figures for Scottish exports to the rest of the world (that is, excluding the £58.3bn that’s sold to the rUK) and then to exclude ALL of the Scottish oil and gas exports too.

ftstats

(The feeble excuse offered is that oil and gas revenues have been excluded “as there is no agreement between Holyrood and Westminster on their allocation”. Effectively the BBC is suggesting that Scotland might get none of the oil and gas revenue at all.)

But even then the BBC figures are exceptionally low. The FT table shows that Scotland exports £39.8bn to the rest of the world, including oil and gas. Yet even without oil and gas in those “International” figures, Scotland’s global exports (as detailed in the pie chart on the right) total a respectable £25.9bn. That’s a hefty £9bn (or 53%) higher than the figures cited by the BBC.

We can feel your eyes glazing over from here, so let’s boil it down:

Actual Scottish exports: £98.1bn
Scottish exports excluding oil and gas: £73.6bn
All Scottish exports excluding the rUK: £39.8bn
Scottish exports excluding both the rUK AND oil and gas: £25.9bn
Figure quoted by BBC for “Scottish exports”: £16.9bn

Super-alert readers will have noticed that the numbers still don’t quite add up for the explanation, so we had a dig around, and the only £16.9bn figure we could find came from a table in the 2013 ONS report Official statistics in the context of the referendum on Scottish independence – except that for some reason the BBC has chosen to use the 2010 stats rather than the more recent (and 8% higher) ones for 2012.

ons2010

Those figures are for the highly selective “manufactured exports” category, which means that they exclude all manner of services as well as oil and gas.

What the BBC has done here isn’t just careless, it’s deceptive. In order to gauge the reality of Scotland’s finances you clearly need to look at exports as if the country was already independent, in which case the rest of the UK would be an export market as well, radically shifting the balance. And obviously you need to include ALL of Scotland’s exports, not just an arbitrary selection of them.

Readers may feel that the state broadcaster – in using outdated figures and assuming an independent Scotland would end all trade with the rest of the UK and have no oil or gas revenues – has somewhat overstepped the bounds of impartiality. On the basis of the evidence it would be difficult to construct a case for the defence.

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Source: Wing Over Scotland

Taking your ball away

We just caught a documentary on the BBC News channel presented by John Beattie and entitled “The Games People Play”, which was first shown on either Saturday or Tuesday (the BBC seems somewhat uncertain). Covering the link between sport and politics, it’s one of the best things the channel has produced as part of its referendum programming, and we recommend it.

One rather depressing bit leapt out at us, though.

Sir Craig Reedie CBE, from Stirling, is former chairman of the British Olympic Committee and a current member of the International Olympic Committee. And when Beattie asked him about an independent Scotland’s entry into the 2016 Olympics in Rio, he gave an answer which readers may or may not find surprising, depending on their level of cynicism about “proud Scots”.

Reedie made a bizarre argument that an independent Scotland, despite having voted for independence in a democratic referendum accepted by the UK government in September 2014, might not have been recognised internationally by the start of the 2016 Games, and therefore would be refused entry.

That seems highly doubtful – two years is a lot of time to get all the paperwork sorted, especially given that Scotland already has all the infrastructure of a national athletics team in place and fully operational (as shown by its participation in the Commonwealth Games) – but it was what he said afterwards that jarred.

BEATTIE: As a Scot, though, would you not fight very hard to get them in?

REEDIE: No, I wouldn’t, because I was proud to be president, or chairman, of the British Olympic Association. I think elite athletes from Scotland have been served very well by membership of Team GB, they have benefited hugely from the very large amounts of UK funding that is available, and they are no less proud Scots.

Ironically, the exchange came just moments after Reedie had explained why Scottish athletes at the Olympics had been forbidden from saying things like “I’m doing this for Scotland”, because that would be judged a political act. So his view is apparently that you’re allowed to BE a proud Scot, just not to SAY so.

But let’s look at that statement again. If Scotland votes Yes, the fact that Scottish athletes may have been supported by Team GB in the past is neither here nor there.

(Indeed, the counter-argument can be made that the Union has served Scottish athletes so poorly that most of them have had to leave Scotland to find decent facilities. Many of the Scottish Commonwealth Games team train here in Bath.)

All that mattered in that scenario would be the future, yet Sir Craig just told the nation’s watching TV audience that as a member of the IOC he would refuse to fight for his own country’s inclusion in the Olympics, seemingly in a fit of pique because he opposed his fellow Scots’ decision to vote for independence. We’re then asked to accept that this is an expression of his Scottish pride.

Only one of the sides in the independence debate ever uses the term “proud Scot”, presumably in the belief that their actions make it necessary to assert it, because otherwise the opposite would appear to be true. It’s a phrase we fervently hope to never hear again after this September.

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Source: Wing Over Scotland

Information minimalism


Information minimalism


We know you’re not really very big on boring old politics while there are still reality TV “celebrities” alive and desperately punting their “leaked” sex tapes, Scottish Sun On Sunday, but we could probably do with just a little bit more to go on than this:

sunwealthy

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Source: Wing Over Scotland

The unlikeliest places


The unlikeliest places


Investors Chronicle (part of the Financial Times group), 25 July 2014:

“In the 12 months since we recommended EnQuest (ENQ) as a speculative buy option, the share price of the North Sea independent has oscillated within a relatively narrow range (-11p/+16p) either side of the current share price of 132p. The relative stability (or stagnation) of the share price – depending on your point of view – is partly attributable to repeat production delays on the Alma/Galia project.

But oil from the 34m barrel development is now imminent, which will help to shore-up near-term sentiment, particularly if output is cranked-up in fairly short order. However, even beyond the immediate quest to bump-up EnQuest’s daily production volumes by another 13,000 barrels, the driller’s strategic focus on exploiting maturing assets and underdeveloped fields in the UK North Sea places it in an ideal position to benefit from likely regulatory reforms, and we recommend buying in anticipation.

We think that Westminster has been deliberately downplaying the potential of the UK Continental Shelf (UKCS) ahead of September’s referendum on Scottish independence.

The Department of Energy has certainly been far more subdued than it was at the time of the February publication of Sir Ian Wood’s preliminary findings on the future of offshore oil & gas in the UK.

According to the report, the UK economy could generate £200bn over the next 20 years through the recovery of only 3-4bn barrels of North Sea oil and gas. Many analysts believe that the potential is much greater.

(Our emphases.) We all suspected as much, of course. But the Investors Chronicle isn’t exactly a renowned fount of Scottish-nationalist propaganda – for 150 years it’s been making its living out of telling the City of London how to get richer. If you want to find out what the UK’s wealthy elite REALLY think about the North Sea’s prospects, you won’t find a much better indicator.

So if it’s telling its readers to dive in on oil companies which had a big DROP in profits last year (you know, the freak low year for oil tax receipts that the UK government just loves to use as the foundation for its theatrically gloomy analyses of an independent Scotland’s finances), it’s probably worth taking note.

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Source: Wing Over Scotland

A useful idiot

Alert readers will doubtless have noticed that a post yesterday was disrupted by a series of strident and increasingly ill-tempered comments by a particular user, themed around their insistence that a central bank is a prerequisite of EU membership, and therefore Scotland wouldn’t be eligible if it was using Sterling as its currency OUTSIDE of a formal currency union with the rUK.

In fairness, that’s an assertion that quite a few people have made during the debate, and the commenter – eventually, having been repeatedly challenged for evidence to back up his claim – managed to provide a couple of examples, in the form of the New Statesman’s George Eaton and the Telegraph’s Andrew Lilico.

owls

The problem, of course, was that those were just equally empty assertions which provided no evidence. So rather than argue the toss over interpretations of obtuse legalese, we thought we’d just go straight to the horse’s mouth, and we rang Graham Blyth, the Head of Office of the European Commission in Scotland.

Being such important people, we got straight through.

Unfortunately, Graham was just heading out to something even more important than talking to us, and he asked if we’d put the question in an email and he’d get something back to us today. He was as good as his word. Here’s the exchange we had.

———————————————————————————————————

FROM: Rev. Stuart Campbell
TO: Graham Blythe

Hi Graham. Further to our telephone conversation of a few moments ago, my question is simply “Is it a condition of EU membership that a member state must have its own central bank?”

Any assistance much appreciated.

———————————————————————————————————

FROM: Graham Blythe
TO: Rev. Stuart Campbell

Dear Stuart,

Your enquiry relates to the monetary policy of the EU that is mapped out in the Treaty of the Functioning of the European Union. Specifically I would draw your attention to Article 130 of the Treaty that concerns how the ECB should exercise its responsibilities. Article 131 further states that:

“Each Member State shall ensure that its national legislation including the statutes of its national central bank is compatible with the Treaties and the Statute of the ESCB [European System of Central Banks] and of the ESCB.”

The Statute of the ESCB and the ECB is laid down in a Protocol that is annexed to the Treaties. Article 14 of the Protocol concerns National Central Banks. Article 14.3 specifically states that:

“The national central banks are an integral part of the ESCB and shall act in accordance with the guidelines and instructions of the ECB…”

In terms of new Member States, it is Article 48 [48.3] that specifically makes reference to new Member States. It states:

“Upon one or more countries becoming Member States and their respective national central banks becoming part of the ESCB, the subscribed capital of the ECB and the limit on the amount of foreign reserve assets that may be transferred to the ECB shall be automatically increased…”

Article 50, the final protocol should also be looked at as it refers to Members States with a derogation (The Applicability of the transitional provisions).

Currently out of the 28 EU Member States today, 18 (Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Luxembourg, Malta, the Netherlands, Portugal, Slovenia, Slovakia and Spain) have adopted the euro, which means that they participate fully in Stage Three of EMU. The

· Irrevocable fixing of conversion rates;

· Introduction of the euro;

· Conduct of the single monetary policy by the European System of Central Banks;

· Entry into effect of the intra-EU exchange rate mechanism (ERM II);

· Entry into force of the Stability and Growth Pact;

Two – Denmark and the United Kingdom – have a special status, which means that in protocols annexed to the Treaty establishing the European Community (EC Treaty) they were granted the exceptional right to choose whether or not to participate in Stage Three of EMU. They both notified the EU Council (Denmark in 1992 and the United Kingdom in 1997) that they did not intend to move to Stage Three, i.e. they did not wish to become part of the euro area for the time being. The other EU countries currently have a “derogation”. Having a derogation means that a Member State has not yet met the conditions for the adoption of the euro and it is therefore exempt from some, but not all, of the provisions which normally apply from the beginning of Stage Three of EMU. This includes all provisions which transfer responsibility for monetary policy to the Governing Council of the ECB.

Trusting that you will find this explanation to be of assistance

With best regards

———————————————————————————————————

FROM: Rev. Stuart Campbell
TO: Graham Blythe

Thanks very much for the reply. However, I’d already found much of that and it doesn’t really seem to address the question. It says what member states should do with regard to their central banks if they happen to have one, but it doesn’t seem to state or even imply that a central bank is a requirement of membership.

———————————————————————————————————

FROM: Graham Blyth
TO: Rev. Stuart Campbell

Dear Stuart,

My immediate response on a beautifully sunny, warm Edinburgh afternoon (long may it continue) is that your question has never been tested since all those countries acceding to the EU have had central banks.

With best regards,

Graham

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FROM: Rev. Stuart Campbell
TO: Graham Blyth

That’s much the conclusion I’d reached myself. It certainly doesn’t seem to be laid down in any statute, and if you can’t find one I suspect nobody can :)

Enjoy the sun.

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So that’s that. The head of the European Commission in Scotland can’t find anything in EU law that says you must have a central bank to be an EU member state.

Honestly, UK media, do we have to do ALL the journalism around here these days?

.

NB For the avoidance of any doubt, the “useful idiot” referred to in the headline of this article is the annoying commenter who made us decide to definitively resolve the issue, not the splendidly helpful and affable Mr Blythe.

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Source: Wing Over Scotland