Scotland’s independence vote – what does it mean for Switzerland?

Scotland, you might think, is just a small country populated by roughly five million people. But it is far more. Discounting its history and disproportionate achievements (you’re only as good as your last mega-invention – Grand Theft Auto), the country has Edinburgh, a vibrant, world-class financial centre; a significant oil industry; an unassailable whisky industry; tourism; and many other businesses that compete measure for measure around the world.

And then there’s its solid, well-maintained infrastructure. Its education system continues to power top class professions, innovation and commerce in the country and well beyond. And the Scottish legal system is a delight – unlike many others, it actually does pretty much what it is supposed to do – administer justice.

Scotland’s diaspora is much like Switzerland’s. Historically the poor came from mainly agricultural stock, and the educated ambitious were personified by the likes of television inventor John Logie Baird and steel magnate Andrew Carnegie and were cut from the same cloth as, say, Louis Chevrolet from Neuchâtel. Scotland still loses over 30,000 of its bright and ambitious young people every year. And Switzerland’s brain-worker emigration has not stopped either.

Like Swiss cantons, Scotland has its own parliament. Significant self-determination has been enjoyed for a generation, somewhat less than Swiss cantons, but the Scots have the desire and the ability to make things work – with one caveat – funding. Scotland relies on direct subsidies from the rest of the UK to fund its heavy social costs and receives a greater proportion from the coffers than the other countries in the union. Without subsidies, it’s not difficult to foresee sharp compensatory rises in taxation – something the leftist Scottish National Party is unlikely to baulk at.

If Scotland gains its independence on Thursday 18 September, it will be a dark day for the country, for the remainder of the UK and for Europe. The reverberations beyond the region may not be huge but they will nevertheless be felt around the world. The five permanent members of the UN Security Council, well known for being unable to agree on anything – even halting genocide – have all agreed that Scottish independence is a grave mistake. Certainly they may have vested interests, but in this they are right.

The UK will have to remove Trident, its submarine nuclear deterrent from Scotland. While the boats themselves can probably be moved to England, the larger and possibly insurmountable problem is where to move the atomic weaponry?

The UK government claims that this could mean that the UK has to give up its nuclear capability. This would be a major global game changer. NATO would be weakened and the UK could be hard pushed to maintain its seat as a permanent member of the UN Security Council. Would another democracy replace it? The nuclear umbrella it put up along with its allies, France and the US, would be diminished. Democracies – even neutral ones such as Sweden and Switzerland – have benefited from its deterrence value. Could that impact adversely on their security if Scotland gains independence?

And then there’s the small matter of an independent Scotland wanting to join the EU. Cutting to the chase, Scotland will surely be able to join the EU – an agreement would have to be worked out with Spain, in particular, to stop it boycotting Scottish entry as a demonstration of power to independence inclined Catalonia, but nevertheless such a deal could probably be made. The problem is that Scotland is highly unlikely to be able to negotiate any special conditions or opt outs – especially if it manages against all odds and rationale to keep the pound and opts out of the euro.

It will almost certainly have to sign up to the Schengen treaty (free movement of people), which the UK is not currently party to. The ramifications of this for Switzerland are negligible in the short term, but if the country ever decides to join the EU, Scottish membership terms will have set a precedent. Switzerland could therefore be forced to surrender many of its current favourable agreements.

Economically, there are some interesting possibilities for Switzerland in the event of a Yes vote. Several large Scottish financial institutions, such as the Royal Bank of Scotland and some hi-tech companies, have said already they will relocate out of an independent Scotland. While there may be an element of pre-vote sucking up to the powers in Westminster, these organizations would do well to consider Switzerland as an alternative financial and hi-tech centre.

And if it really doesn’t work out well for an independent Scotland, and the projected increase in mass unemployment does come to pass, Switzerland could benefit as a country near the top of the list for bright and aspirational Scottish emigrants.

Scotland’s fate will be announced on 19 September. At the very least, a No vote will trigger some heavy sighs of relief, but it will not be back to “business as usual”. The debate surrounding the whole campaign has raised many questions for other parts of the UK and they are not likely to let Westminster rest.

A Yes vote will cause massive change in the UK and have a knock-on effect on most global institutions, from the UN Security Council to the Olympic Games. Pundits prophesy a run on sterling if the vote is Yes. To some extent, they are likely to be right. What is depressing is that this is the very least of the problems that will face the UK, Scotland and Europe in the long term.