Economic and Monetary Union: Implications for Scotland

This short paper sets out background to current EU policy on European and Monetary Union (EMU), looking at both the management of monetary policy focusing on the Euro and the parallel system for economic policy coordination which is primarily the responsibility of member states. It describes the way in which EU countries coordinate economic policy (notably through the Economic Reform Programmes and processes such as deficit reduction procedures) and how the EU institutions will support countries in the delivery of EU policies, including the mobilisation of investment funds to support EU policy priorities. It then looks as Scotland’s experience, describes the most recent Scottish Economic Reform Programme 2016 and postulates that the close degree of alignment between Scottish and EU economic and social priorities would allow a basis for joint working if Scotland decides to pursue a more close approach to EU policies than the rest of the UK. It also notes that if Scotland pursues the independence in Europe option, Euro membership would not be an issue of substance in the early years and that the focus of EMU discussions would likely be on the need for a deficit reduction programme for Scotland.