Would the EU allow a Scottish secession-accession?

Following the whirlwind events of this week, Scotland now appears to be closer to secession than it has ever been in the 300-year history of Great Britain. This week the first minister of the devolved Scottish Parliament set a date for the first referendum on Scottish independence in history. And according to polling, if the referendum were held today, Scots could very well vote to separate from the United Kingdom.

The discussion of secession has been hanging in the air for some time, ever since the secessionist Scottish National Party won a majority in the Scottish Parliament in 2007. But now with an independence referendum date set, discussion has turned for the first time toward the real practicalities of what a split would entail and the difficult questions it would present. Who does the oil in the UK's territorial North Sea waters belong to - Britain or Scotland? Who would be on the hook for the massive bailouts of Scotland's two banking giants in 2008? Would Scotland use the British pound, the euro, or a new Scottish pound?

Scottish First Minister Alex Salmond took the decision in response to a call from UK Prime Minster David Cameron to call a referendum, which the SNP had promised in their election, now. London knows that with the current economic crisis, Scots would be unlikely to be very brave at the polls. But Salmond balked, saying he would not take orders from London and setting a referendum date in 2014. 

EU complications

Though there have been a lot questions asked in the British media today about what secession would mean, as far as I can tell not a lot of thought has gone into the EU implications of all this. Everyone has been asking whether or not Scotland would choose to use the euro. But there's a leap being made there. In order to use the euro, Scotland would have to be part of the EU. That is not up to them, it is up to the 27 member states. And there are plenty of member states with good reason to block Scotland's entry.

Will Europe be saved tonight?

I'm here at the big EU summit in Brussels, the D-day event that is being billed as the last chance to save the Euro and prevent a collapse of the European economy. Even if the leaders emerge from those fortified doors having done everything the markets are asking, there will still be a long road ahead in this crisis. But this could be the moment they were finally able to turn the tide and appear in control.

Or it could be remembered as the moment where the entire European project collapsed. The tension in the press room is palpable. It's hard to say if it's coming from the stressed-out journalists or seeping in from the inner chambers where the European leaders are meeting. Either way, I would venture to say the Justus Lipsius building (or 'Just Lips' as I like to call it) is one of the most tense places on earth at the moment.

The markets need the leaders to come out of those doors and tell the press room two things: First, that they have amassed a trillion euro war chest to protect all of the Southern European economies, including Italy and Spain, from collapse. Second, that Italy has agreed to put in place a drastic austerity plan in line with what is being imposed on Greece.

Belgium's 'invisible' EU presidency comes to an end

As the clock struck midnight last Friday, it wasn't just 2010 that was coming to an end. Here in Brussels, the new year also meant the end of Belgium's six-month period at the helm of the EU, as the country handed over the baton to Hungary. It was an interesting period for the rotating presidency, held for the entire six months by a country with no government. Yet despite the domestic political chaos, the presidency actually seemed to run fairly smoothly - or at least there weren't any noticable disasters. In fact if you weren't looking for it, you might have missed the Belgian presidency alltogether. It was a low-key, almost invisible affair.

Perhaps this was exactly the type of presidency that the EU needed at this time. After all, the Lisbon Treaty's creation of the new posts of President of the European Council and High Representative for Foreign Affairs was meant to downgrade the role of the rotating presidency to that of just a coordinator. Spain was the first country to take over the presidency after the treaty's adoption 13 months ago, and for those first six months of 2010 there seemed to be some confusion about the rotating presidency's new role. The Spanish foreign minister got in hot water a few times for appearing to speak for EU states when that role is meant to now be held by the new EU foreign affairs chief Catherine Ashton. And Spanish Prime Minister Jose Luis Zapatero, effectively the last Socialist leader left in power in Europe, seemed to be pushing for high-profile agenda items in a way that overlapped with the role of the new European Council president Herman Van Rompuy.

Contrast this with Yves Leterme, who is temporarily holding the Belgium prime minister position as a caretaker while the country continues to struggle forming a government. Leterme was pretty much invisable during the entirety of the Belgian presidency. At the European Councils he was happy to hand the reigns over to Van Rompuy, who as luck would have it is not only a fellow Belgian but also a member of Leterme's own political party. And I'm not even aware of the name of the Belgian caretaker foreign minister, I never heard from him or her at all last year. Given that the caretaker government is not authorised to propose new policy, perhaps this is unsurprising.

David Cameron's lucky day

It's been a good day for UK Prime Minister David Cameron. This morning Britain's Prince William announced he will wed his long-time girlfriend Kate Middleton in a lavish royal wedding next year. Cameron was reportedly ecstatic when he announced the engagement to his cabinet, and it's not hard to see why. A royal wedding is exactly the sort of thing the Tories need to lift the spirits of the British public, who are suffering so much from the economic crisis and the budget cuts. In fact the engagement announcement already started fulfilling its role as a much-needed distraction today as it completely drowned out the simultaneous announcement from 10 Downing Street of a raft of new cuts including, ironically, the scrapping of legal aid for poor people getting a divorce. So while the royal family celebrates an upcoming wedding, their subjects learn it will now be harder for them to obtain an equitable separation.

Meanwhile over in Brussels, word came this morning that Cameron may get his wish for a complete freeze in the EU budget after all. Talks between member states and the European Parliament over the 2011 EU budget broke down last night. With no agreement in sight, it will mean that the 2010 budget will have to be used next year. Freezing the EU budget at 2010 levels was exactly what Cameron wanted, though this is probably not the way he wanted to get it. But Brussels was in despair today over the failure to reach an agreement, which will have very serious consequences for the EU. Both the commission and the parliament seemed to be shocked by the deliberate sabotaging of the budget that appears to have been led by the UK with the aid of their Dutch and Danish eurosceptic allies.

It was particularly shocking considering that parliament had broken precedent and completely capitulated to member states' demand that the budget not be raised by more than 3% (the parliament had originally called for a 6% raise). What appears to have happened is that certain member states are using the budget negotiations as a power play, seeking to sideline an increasingly assertive European Parliament that has sought to use the new powers it was granted by the Lisbon Treaty. The irony of the situation was lost on no one in Brussels today. The British Conservatives, who are constantly whining about the "democratic deficit" in the EU, are seeking to marginalise the only directly elected EU institution. And they are willing to play a dangerous game to do so.

A day of deal-making in Brussels

As European leaders meet in Brussels today everyone seems to have something to sell. David Cameron and new Dutch prime minister Mark Rutte have stepped off their trains this morning with demands for an EU budget freeze for 2011. Angela Merkel and Nicolas Sarkozy arrived this morning having formed a pact between them a few days ago to jointly demand treaty changes allowing the EU to sanction eurozone countries who misbehave. And representatives of the European Parliament will be on hand to demand the introduction of direct EU taxation that would go directly to Brussels. It will be an intense day of horse-trading as each block tries to get what they want.

The British and Dutch conservatives want to freeze next year's budget at 2010 levels, opposing the 6% increase approved by the parliament last week. They say it would be obscene to increase the EU budget, which is financed by member states, at a time when national governments are pursuing drastic budget-cutting measures. Members of the European Parliament (MEPs), on the other hand, point out that a 6% increase is significantly lower than what they usually call for. But they say they would be willing to consider a freeze if the member states agree to new forms of direct EU taxation on things like aviation, financial trading and carbon credits. Right now the EU is entirely funded by member state governments.