Brexit

Panelists discuss the multiple challenges facing Europe today, including the public health and economic consequences of the coronavirus pandemic, Brexit, continued threats of nationalism, Russian influence, and relations with the United States.

Matthias Matthijs, senior fellow for Europe at CFR and associate professor of international political economy at Johns Hopkins University’s School of Advanced International Studies, discusses European integration and Brexit negotiations in the lead-up to the December 31, 2020, deadline. FASKIANOS: Welcome to the CFR Fall 2020 Academic Webinar series. I'm Irina Faskianos, vice president of the National Program and Outreach here at CFR. Today's webinar is on the record and the video and transcript will be available on our website, CFR.org/academic. As always, CFR takes no institutional positions on matters of policy. We are delighted to have Matthias Matthijs with us to talk about European integration and Brexit. He is a senior fellow for Europe at CFR and an associate professor of international political economy at Johns Hopkins University's School of Advanced International Studies, where he teaches graduate courses in international relations, comparative politics, and international economics. Dr. Matthijs is an award-winning author and teacher and an expert on European political economy, the politics of economic ideas, and regional integration. Since May 2019, he has also served as the chair of the executive committee of the European Union Studies Association. He is currently working on a book-length manuscript that examines the collapse of national consensus around European integration. So welcome Matthias. It is great to have you with us. We are coming up on the December 31, 2020, Brexit deadline. So I thought you could begin by talking about where negotiations currently stand, and what no deal means for the European Union. MATTHIJS: First of all, thank you, Irina, for inviting me to do this seminar. And of course, welcome to everybody joining. There is a kind of short-term pressure point here where we have reached the point in the negotiations between the European Union and the United Kingdom where it's basically the beginning of the end, if you want, that's now kind of in place. There's all kinds of deadlines being thrown around. Boris Johnson wants there to be a deal by October 15. Well, that's in a week, it seems unrealistic. And it looks like the European leaders are a little more comfortable pushing it into the second half of October, maybe even early November, because everybody knows the real deadline is December 31. Maybe it's worth standing still for a minute at how far we've come in these negotiations. And how many things have had to happen to get us to this point. And so I think Brexit is an event that will be analyzed by academics and scholars and think tankers for years to come. But it is kind of striking from a kind of historical institutionalist point of view, how many things have to happen for us to get us there. So first of all, of course, the vote. That was very divisive in the United Kingdom, because obviously the Scots and the Northern Irish voted to remain in the European Union, while the Irish and a solid majority of England voted to leave. That's seeing Cameron resign, Theresa May take over, Theresa May trying to make a kind of deal that would keep the United Kingdom very close to the European Union. And basically, that exposed the contradictions of Brexit. And so in many ways, a lot was settled when Boris Johnson took over, then couldn't make a deal at first then made a deal on the withdrawal agreement, and then won a big general election that basically said this is what the British people want, they will leave the European Union and they did leave the European Union—there's often confusion about this—on January 31 of this year. And then Boris Johnson campaigned in December on a platform of what you can call a Canada-style deal with the European Union. So a free trade agreement, that's maybe a little bit more generous than your kind of bare bones free trade agreement. What we've seen since then, is little has happened, right? I mean, there's been a global pandemic, and that's pushed the Brexit negotiations down the list of priorities for the European Union. But what has always been clear, and I think that's sometimes being misunderestimated, or underestimated, or misunderstood, or underestimated better at the side of Brussels, is that this is a government in the UK, a conservative government of all Brexiteers of people who are committed to delivering Brexit and who believe in it. Even though they may not believe in it privately, they believe in it publicly, and they are on the record saying so. And the only rationale for Brexit would be leaving the single market and the customs union because that at least keeps up the illusion, if you want, of taking back control and of sovereignty of basically being able in charge of your own trade policy, and your own immigration policy, and your own laws, and money, and so on. And so I think they are dead serious on delivering on this. And that's also why this government, the Boris Johnson government, is actually quite comfortable with a no-deal scenario, right? They are willing to walk away from what they think a bad deal, they think no deal is better than a bad deal. The big difference between now and a year ago, of course, is that there is a withdrawal agreement. So there, there is a solution for Northern Ireland, there is a solution for its citizens, EU citizens and UK citizens on both sides of the negotiation. And there has been—they have settled the money question. So the question now before us is, are we going to have a free trade agreement, a bare bones free trade agreement, between the UK and the EU? And that means zero tariffs, zero quotas, or are they not going to be able to get to that point? And so in many ways these negotiations have now dragged on since the summer of 2016, if you want to, really in earnest since March 2017, when they triggered Article 50, which started the clock of the two year countdown. But of course, that was extended a few times, and now we are at the end. There was one-year extension to the transition. So basically from the end of January to December 31. And there was a chance in June for the Johnson government to say, okay, we want another year extension to have a better agreement, a more solid agreement, because a lot has to be negotiated. And they decided against it. So another credible commitment that they're willing to leave the EU, they've already left it, they're willing to leave the single market and the customs union without a deal.  So what are the three sticking points right now? And there really are three sticking points in these negotiations. The biggest one, and it is the biggest one because it goes to the very heart of the rationale for Brexit, is what's known as the level playing field. So if you want a free trade agreement with the European Union, the European Union wants a guarantee that you're not going to use random state subsidies for unfair competition, that the Johnson government is not going to subsidize all kinds of companies and firms and give them an unfair advantage when they compete with France, with Germany, and so on. And so why is this an important sticking point? Well, because Boris Johnson's government wants to do industrial policy right, one of the rationales for Brexit, especially his Rasputin-like figure, his advisor Dominic Cummings, really believes that the EU restricts what member states can do, that they cannot arbitrarily support industries in the north, where they feel that the left behinds from globalization haven't gotten enough support. And so one of the rationales of Brexit is to do this. And so if the UK's point of view is to say well, we only want a simple free trade agreement, the way Canada has won, the way many other countries, Singapore, and so have with the EU, you cannot expect us to now sign off on all kinds of restrictions to what we can do from an economic policy point of view. Of course, Germany, and France is saying, well hang on a minute, I mean, you're very close, you're already very competitive, if you're going to give yourselves even another edge, that's not a good deal for us. And of course, there's an irony here, because it's Margaret Thatcher, that most famous of recent British prime ministers, that insisted on very strict level playing field conditions when she was championing the single market, because she didn't trust Germany or France to not support their own industry. So it's almost the reverse order.  Second main sticking point is fisheries, the negotiations over British territorial waters. And so for—this was already a big sticking point back in the 1970s, when Britain joins the European Union originally, so you have Portuguese, Spanish, French, Belgian, Dutch, Danish, and Scandinavian fishermen, who access British territorial waters and get quite a lot of catch from these waters. So does Brexit mean that Britain gets complete control over these waters again, and they can just bilaterally negotiate with countries how much they can catch every year? So that's something because for forty years, fishermen, and especially the French feel very strong about this, they basically want to maintain the status quo Europe. They know that they won't get there, so that's part of the leverage negotiation.  And the last point, the last sticking point in the negotiations, is the governance with how is this agreement, this free trade agreement, going to be governed? The British have been explicit that they do not want the European Court of Justice involved with any of this, they want their own law. So you're going to have to have a separate mechanism for things like level playing field. But then, the debate is that is there going to be exempt [INAUDIBLE] commitments to what we can and cannot do, or whether we're going to shadow EU regulations or not for good straight, for example? Or is there going to be an expose mechanism that looks into complaints that say well here, there's a dumping charge or there's a violation of the spirit of the agreement. And then there's going to be some sort of court, a bilateral court, with judges from both sides, and maybe judges from third countries—you can even imagine American judges being on there—who then say, well, actually the EU is in the right or the UK is in the right. So that's where we are, there’s clearly a deal to be made. The European Commission wants to make a deal, because the risks of not having a deal would be a short-term economic shock—we can come back to what that would look like—but they don't want to offer up the integrity of the single market, they don't want to give the Brits a special deal, because then they have to give the Swiss a special deal and other countries and then becomes a slippery slope. The Germans want a deal but know that at the cost of European unity and the French want to do but not at a cost of bankruptcy for their fishermen, either. And then, of course, Boris Johnson himself wants a deal. We're in the middle of a pandemic—the cases—the second wave is getting worse. He's had one policy U-turn after the other in his first nine to ten months as new prime minister since December. And so he wants to show that he can deliver, that he can govern. "Get Brexit done," was that kind of very attractive—for many voters at least—slogan like, let's get it over and done with and let's move on from this. And so if there is a no-deal scenario, this is going to go on and on and on and on. Because no deal in itself is not an outcome. It's a temporary situation, where then you have to have hundreds of bilateral deals that have to be negotiated. And that many people argue Britain will be in an even worse position, then because they will need that deal more than the European Union side will need it. So why don't I stop right there? FASKIANOS: Fantastic. Thank you so much. Now we are going to go to all of you for your questions. You can either raise your hand by clicking on the participants icon at the bottom of your screen or clicking on an e-tablet on the more button. Or else, you can type your question in the Q&A box. And if you could please—if you're opting to write a question, please identify yourself and your affiliation. And give us your name if you haven't renamed your device, so we know who you are. So I'm going to first take a question, raised hand, from our colleague Mojubaolu Okome, and please make sure to unmute yourself. Q: Good afternoon and thank you very much. So what I'm wondering is what really is the ideal resolution for this, given the fact that there are so many interests that are threatened on both the British side and the European side? Also, how does this—I mean, I'm African, I come from Nigeria—and I remember, Theresa May's government was making a lot of overtures to African countries, because I believe there's a need for alternative markets, if this EU relationship is going to be broken. So I mean, what then is this Boris Johnson administration willing or interested in doing and how does this affect the chances. Plus, there were so many people opposed, and their voices I don't think were heard. So how about that? MATTHIJS: Excellent question. The main problem, of course, in these negotiations is that what's ideal is very different from an EU point of view than it is from a UK point of view. So, from an EU point of view, they would love nothing more than the UK to remain in the single market; keep the free movement of goods, services, capital, and people; and for them to remain in the customs union because it makes the EU and more attractive markets to make free trade deals for the EU with other countries, be it China, be it the United States, be it India, to just name the top three biggest markets that the EU doesn't have free trade deals with. But it also means basically that they have the best of both worlds, right? The UK is no longer a member so it cannot frustrate future decision-making or block or veto next steps in European integration. But they have to follow the rules, basically. And of course, that is immediately clear. From a Brexit point of view, that's exactly what they don't want. That is the worst of all worlds. For Boris Johnson's government, it's maybe not the worst of both worlds from a pure economic point of view because it means nothing changes in the UK, right. And in the end, who cares what exactly, car bumpers, modifications are or what regulations are when it comes to certain food standards because in the end, UK preferences are much closer to EU preferences than they are to American preferences or Russian preferences or Chinese preferences. So that's one. I think you're absolutely right, in the sense that a lot of voices weren't heard in the UK. And that's the nature—and everybody in the United States will know this right now—the nature of the electoral system in the UK that when there was an election in December 2019, it was settled in favor of what's known as a hard Brexit, meaning leaving the customs union and the single market that then allows the UK to control its own immigration, to make—to strike its own trade deals all over the world. So one thing I think important pointing out here is that if there is indeed a no-deal scenario, that means that the UK will have to trade with everybody, not just with the EU, but with everybody on what's known as most favored nation terms, which means they would have to treat China, Russia, the United States exactly the same as they treat France or Germany, which means, the tariffs, they could say, well, if we have too high tariffs that will be inflationary and bad for our economy. And of course, will drive up prices of all the kinds of things we import so let's just keep a zero tariff. But that will wipe out the automotive industry, the agricultural industry, and farmers, fisheries because they suddenly will face tariffs with the rest of the world, with the EU, the way they're faced with the rest of the world. So that's why your point about alternative markets is important. But that being said, the European Union has hundreds of trade deals with all kinds of countries, and association agreements, and so on. And so the UK has benefited from that negotiation because the EU is always in a stronger position because it had a much bigger market. The UK will have to renegotiate every bilateral deal with the EU has for itself. And we've seen that they've done this in the case of Japan. And what you note right away is that when it comes to the UK–Japan free trade agreement, Britain has had to accept worse conditions than the European Union had to accept. And so certain things like quotas, they say, well, you can have the rest of the EU quota, unless the EU uses the full quota and then your quota goes down, for example. So that's why I don't see there to be a great many short-term opportunities, because nobody will want to make a deal with the UK unless its relationship with the European Union has been settled. FASKIANOS: Thank you. I'm going to go next to a question in the chat from Peter Gourevitch at UCSD, University of California, San Diego, School of Global Policy and Strategy. Who are the interest groups in Germany and France pushing for a deal? And what will they give up to get one? MATTHIJS: That's a very good question from Professor Gourevitch. And very much expected, you'll be happy to know we just discussed politics in hard times yesterday in my comparative political economy class. And so the main interest groups pushing for a deal in Germany are the usual suspects. So it is automotive, I mean, everything that's heavy machinery exports that has a substantial market in the UK. So what they're worried about is tariffs on their products, and that will immediately make them less competitive. And to some extent, certain any services that rely on a lot of imported UK services, whether it's legal, whether it's financial, that they use, they also want to maintain good relations and so are pushing for a deal as well. I think in France, it's more complicated. Because, and that's where I think in these negotiations you see America playing good cop, pushing for a deal, pushing for a deal, not at any cost, but still staying optimistic, staying the course. You see Emmanuel Macron of France being much more pessimistic, and much more taking a hard line on this, especially fisheries. He wants very much a good deal because there's all these coastal villages, all over Brittany, Normandy, you name it, the whole French coast, that will be destroyed if there is no deal. So from that point of view, he wants to deal. From the point of view of level playing field he very much wants a deal, a very strong deal as well, because he is worried about unfair competition for France's national champions, and so on. So what will be interesting to see is who wins this tussle of strength? It seems to be the case that France and Germany have a new understanding since COVID-19 and since the European recovery fund, and what's called next generation EU, where Germany basically made a kind of dramatic U-turn, sided with the southern European countries, especially Italy, Spain, and France, in favor of a much more generous package that is consisting of grants rather than loans, and is kind of at odds with some of the northern European members right now. That being said, what is clear, thanks to this new strength of European integration, which arguably was possible because the UK had left. I mean, I think that's an important element here that the EU was able to come up with a significant recovery package of COVID-19 because there was no UK veto possible. The question is who will win this? Will the French let go of some of their vetoes or hard lines on this? I really do see if there's a breakdown of relations, it will be the UK that will pull the plug, I think the EU will negotiate until the last minute of the last day, because for them, the difference between the UK and the EU is that the EU did not vote for Brexit, there's no constituency in favor of this. Macron, I think, is pushed the other way from financial services, for example, because they see a real opportunity to steal quite a lot of business from London. So it's a very complicated dance among France, Germany, the Commission, Northern European countries that export the law, and then Southern European countries who honestly, it's not a priority for them. They're mostly worried about the European recovery fund, and that's what they're focused on. FASKIANOS: Thank you. I'm going to go to Morton Holbrook next. Morton, please identify yourself. Q: Yeah, I'm Mort Holbrook at Kentucky Wesleyan College in Kentucky, obviously. My question is, U.S. Secretary of State Pompeo has been going around the world promoting an anti-China coalition describing the Chinese Communist Party as the world's greatest threat. How has that been received in the UK and the EU? And will Brexit, or has Brexit, made a difference in how the UK and the EU respond to that? Thank you. MATTHIJS: Excellent question, Morton. I think actually on China, there has been an alignment of interests between the EU—especially recently Germany—the UK, and the United States. So what you can see happening starting next year, when Brexit is over, I mean, it will never be over because the relation continues and a lot of things will continue to be negotiated, but I think the Huawei—the decision of Germany to follow the EU guidelines on things like Huawei and 5G, and citing security worries as not including them in their 5G network, is suddenly showing that Germany is aligning with the rest of Europe and the UK when it comes to kind of  a more hawkish position on China. I do see relations between the EU and China worse for that point of view. Where there could be a difference is Russia, because the UK has traditionally been the most hawkish on Russia and Russia sanctions, now that they're gone, other voices, more pro-Russian voices from Southern Europe and even from Germany, may start to gain the upper hand even though it's not going to change overnight, either. And that may cause quite a bit of transatlantic dissent, whether there's a Biden presidency or whether Trump has a second term, that's always going to be an issue, I think, the relations between Russia and the EU are more important for the EU because of its proximity. But when it comes to China, that's where I think that the concept of what's known as EU sovereignty or open strategic autonomy or pick your vague term, this is really an effort of the EU to deal with China and the COVD-19 pandemic made everybody realize in Europe, how vulnerable they are and how dependent they are for certain goods and their supply chains, how well they're linked with China. So the effort now when it comes to health, or industrial policy, or the Green New Deal, or digital, these sorts of industries, Europe wants to be more self-sufficient. And so I can see them—it's more likely that they will cooperate with the United States there, then they will become more dependent on China. It's of course easier said than done. This sounds good in theory, but in practice, this is hugely expensive. And a lot of Northern European countries here are probably skeptical that the EU can pull this off on its own. FASKIANOS: Matthias, there is a question about the United States' position on Brexit. So, what is the Trump administration's position? And if Biden wins and takes office, what would be his? Is there any difference between the two? MATTHIJS: That's an excellent question and I think is on the minds of many of you. I mean, obviously, Brexit happened, and it's often linked with the advent of Trump in the United States because they seem to at least invite similar currents in Anglo Saxon capitalism, or an Anglo Saxon society, for that matter. So both had an anti-immigrant bent, both had a sort of anti-establishment bent. And so similar forces that drove the British people to vote for Brexit, voted many Americans to vote for Donald Trump. So the president, the American president has been very supportive of Brexit. He sees the EU as a competitor. He believes in sovereign states, and he wants to do deals with states rather than with something like the European Union. There was this famous meeting with Angela Merkel, where he kept asking her let's do a deal between Germany and the United States. And she kept saying, we cannot do a deal with you, because our trade policy is done by the European Union. And after the fifteenth time, he said okay, well, let's do a deal with the EU in that case. So I think that the main sticking point right now, and Joe Biden himself has repeated this, but even someone like Mick Mulvaney, who's the former chief of staff of Donald Trump, and of course, the special representative in Northern Ireland now, have played the Irish cards. So it's very clear that the Irish American and the Irish lobbying in Washington, DC, has more sway in the traditional special relationship, the Anglo–American relationship between London and DC. So here, Nancy Pelosi has said it, many Democrats, some Republicans even have said, there will be no trade deal with the United Kingdom, if there is a threat to the Good Friday Agreement. So the context of this is that in September, Boris Johnson's government rolled out what's known as the internal market bill that guarantees free movement of goods, services, and so on within the United Kingdom of Northern Ireland, Scotland, Wales, and England. And this was immediately seen and admitted by their own governments that this violates the withdrawal agreement with the European Union that went into effect on January 31. And so in the meantime, the European Commission has started a law—a legal suit—against the UK to take out the passages in that internal market bill that threaten the and the integrity of the Good Friday Agreement that could potentially force Dublin, or the Republic of Ireland, to put up barriers on the Irish border on the island of Ireland, between Northern Ireland and the Republic of Ireland. I think whether it's Democrat or Republican, Britain will have to have some sort of agreement, clean agreement, with the European Union before any trade deal can be done. Naturally, I think Donald Trump is more sympathetic to the whole Brexit idea. I think most people in the Biden administration, or in a potential Biden administration, Biden's policy team, they actually, they don't really understand the rationale for Brexit. They want to do business with Europe, and they, I think, see Germany as a more important partner, whether it's security or economics, than Britain right now. And so I would imagine under a Biden administration that the relationship between the EU and the U.S. will be more important than the kind of bilateral relationship between Great Britain, or the UK, and the U.S. FASKIANOS: Fantastic. I'm going to go back to the raised hands and go to Babak Salimitari, who's at the University of California, Irvine. So please unmute yourself. Q: Hello, can you hear me? FASKIANOS: We can. Q: Thank you for taking my question. My name is Babak Salimitari, and I'm a second year econ student. My question is regarding the international complications of Brexit, especially the JCPOA. The UK is a signee as well as the European Union. However, this tug of war between the two groups has kind of put the entire European Union on edge. And I was wondering how that can possibly affect international deals, specifically the JCPOA. MATTHIJS: Yeah, I actually think on this specific issue, the EU, especially France and Germany, and the UK will remain much more aligned than they're divided on this. I mean, I could be wrong on this. There are hints from certain sources within Boris Johnson's government, that they want to align themselves much more closely in foreign policy with the United States. I think it will matter here, whether who's president of the United States, because it will make a difference. But that being said, I mean, the British people and the preferences, I think, in foreign policy, whether it's for nuclear diplomacy with Iran, whether it comes to climate change, whether it comes to global terrorism, the alignment, the values are much closer of what the UK wants, what the UK people want, and what the European Union want. Here, a no-deal scenario will make this much harder. And that's what I think both sides realize is a no-deal scenario means that at some point in December, maybe even earlier, both sides say we are not going to get a deal now, we're going to start preparing for no deal. And then these preparations will become self-fulfilling because they will become less scary. But then, no deal happens, it's January 1, there's chaos at the border, there's chaos in the airports, everything takes longer,  everything needs to be renegotiated. Nothing is certain anymore. There's so many things that regulate this very close relationship. Then they're like, okay, well, now we have to start renegotiating all of this. But it will mean failure of diplomacy. And it will mean that there's a fundamental lack of trust between both sides. And so it's going to be a lot harder to coordinate foreign policy positions, as important as JCPOA, as you mentioned. I don't want to be too one sided and think this is a tragedy for the UK. I do think it is and I think it was the quote unquote, wrong decision. But it is a tragedy for the European Union as well. I mean, we are now in a world, a more multipolar world, with a more assertive China and a revanchist Russia, and an unpredictable United States, especially now. And so the EU should, in its own interest at least, have a more coherent foreign policy. But that usually means having some hard power behind it. That would have been a lot easier if the UK was a member, because it has a serious military with global reach. It has an air force and so on. And now basically, much of the EU will have to rely solely on the kind of diplomatic strength of France. And that's not something that everybody is happy with in the European Union either because there's still a kind of mistrust of France's intentions. Are they doing this for the EU or are they doing this for themselves? Irina? FASKIANOS: Yes, thank you. I am scrolling through lots of questions and several questions have come up about the role that the WTO or ICJ can play in arbitrating the EU–UK trade disputes. This is from Heidi Hardt at University of California, Irvine. So if you can talk a little bit about that. Waseem Khokhar also asked, what will happen if there will be no trade deal by the end of December? Will they follow the rules of WTO or bilaterally? So there are several questions along that, in that vein. If you can address that Matthias, that would be fantastic. MATTHIJS: So yeah, there is a fundamental problem with WTO. Of course, it's undergoing a leadership change right now and we should know fairly soon who's going to take over. I mean, I think the odds-on favorite right now is the former Finance Minister of Nigeria, Ngozi Okonjo-Iweala, who would be an excellent choice, who's shown her strength and acumen already at the World Bank here in DC. And so the problem with the WTO is that it's handicapped right now by a lack of U.S. involvement, or by an active hostile U.S. administration who's refused to appoint new judges on its appellate body. So right now, it can't actually hear cases and rule on cases. So again, one would expect this to change in January. Under a Biden administration, you'd expect a much more supportive U.S. administration that will want to be more multilateral. Under a Trump administration, all bets are off. I mean, who knows, he may want to see a reform of the WTO or he may just withdraw from the WTO altogether. It's a lot easier to withdraw from the WTO than it is from the European Union, as I think we've seen in the last few years, with Britain trying to extract itself from it. So if there is no deal, then the EU will treat the United Kingdom on January 1, as a third country, as a WTO member like Mongolia, or like any other member of the WTO that it doesn't have a bilateral free trade agreement with. So basically, the UK will be treated like the United States, China, or Russia. So that means there will be tariffs on certain goods, automotive is a key one. Agriculture, because the UK will no longer be part of the Common Agricultural Policy. So this will hurt farmers who export to the EU. Fisheries are the same thing, because it's a great idea to have in theory, having control of your territorial waters and not have French and Dutch and Belgian fishermen in there means there is much more for the UK, in theory. But ninety percent of what British fishermen and fisherwomen catch in British territorial waters is sold in the European single market. So if suddenly, tariffs go up dramatically there, then there they are with all their fish and they can sell it. So here's the thing, what the UK can do is say, well, okay, unilaterally, we decide we won't charge any tariffs to any former EU members or former EU partners. But that means by WTO law that they then have to extend that privilege to every WTO member and then that includes China, Russia, United States, Canada, you name it. And so that will be hugely damaging for its own industries as well. So it's kind of like they're in a double bind, they will suddenly either see very high tariffs on goods coming in which will be inflationary, and which will lead to shortages, or they will see their own markets abroad, especially in the EU, be much less attractive for the exporters. So, you would expect January, February, March, then the UK and the EU will go back to the table, and they'll realize that this is unsustainable, and that they will come to some sort of free trade agreement. That's what I meant by saying that this is not an outcome, no deal. It's just a temporary state of affairs of somewhat chaotic relations with long lines at the border and in airports. At some point life goes on and deals will have to be made. But it's very much a question as well whether the WTO will be functioning. And the UK, once it's out of the EU, has every interest in multilateralism to work because they won't be part of a bigger trade bloc anymore. And so they won't have this kind of market power that they used to have as members of the EU. FASKIANOS: To continue in that vein, Matt Schaefer has posed a question about how will sensitive agricultural regulatory issues come out. And the US–UK FTA, such as chlorinated chicken, beef hormones, gene-edited, genetically modified crops. Will the UK be able to accommodate U.S. requests on these issues or will its deal with the EU prevent such accommodation? MATTHIJS: Yeah, this is a good question and I think there's a simple answer to it. In the end, the EU deal will trump—pardon the pun—any deal with the United States for the simple reason that nobody in the UK wants to lower, or is seen as lowering, food standards. And here is where environmental groups, consumer rights groups, have been incredibly effective in basically scaring the European consumer of American, certain American products. So whether it's hormone, beef, whether it's genetically modified organisms, whether it's chlorinated, or what's now known as chemically washed chicken. And so there is fear of British farmers of this, and they are always a sensitive groups and they always get a lot of support, and a lot of sympathy from British voters. But also what are the other obvious deals or obvious liberalizations that the United States would want with a deal with the UK—pharmaceuticals? And so the National Health Service will be on the table. And that's the kind of precious symbol of post-war British welfare. And so the last thing they want is higher drug prices, because they cannot compete against American drug companies. And there's financial services. What the big prize for the U.S.. will be is much broader access to the City of London, much broader access for American banks to operate there to take business away from British or European banks. So it's not clear that the things that the U.S. wants from a deal like this are all that attractive from a British point of view, because after all, Brexit was sold as this would set the country free and it would increase standards, environmental standards, and so on. Many times, Brexiteers would say, well, listen but EU standards aren't high enough. We can set them even higher once we're free from the shackles of Brussels, we just haven't been able to do this because of competitive pressures with other EU member states. FASKIANOS: Fantastic. I'm going to go next to Maia Cross from Northeastern University. She asked: what kind of security relationship do you think the UK will seek with the EU after Brexit? And there was another question in this vein but a little bit different—trying to find it in this long list of questions—about the proposed EU army? What are the plans? What is the status? That's from Heba El-Shazli, professor at George Mason University’s Schar School of Policy and Government. MATTHIJS: Excellent. Hi, Maia, thank you for your question, and would have expected that from you, and I was actually hoping you could answer that. But I understand that you know what you know and you don't know what I know. So, it's a very tricky question because it depends whether there's a deal or no deal. No-deal scenario, you have to be very pessimistic because I think it will break a kind of carefully built up a rapprochement between London and Paris when it comes to defense relations. It's something that was started, as you know better than I do, in 1998, at Saint-Malo between Tony Blair and Jacques Chirac at the time and has been built up since. France will want to lead a kind of European security policy and will, in a way, to some extent be happy that they are no longer blocked in their ambitions from the UK. That being said, French are also realistic. There's only that much they can do and close cooperation with the UK is in their interest because they're in the same neighborhood. And also, the UK has access to much better intelligence through the Five Eyes agreement between Canada, U.S., New Zealand, Australia, and the UK. So in the case, there's a no deal, I think there's going to be a long, prolonged period of poor relations. And also, I think the UK will choose to have closer relations with the United States, because at the end of the day, we are here with a Tory government that's in power, technically until December 2024, if they want, that's a long time. And their natural pro-American, most of them. And then naturally Euro skeptic, and especially French skeptic. So this specific government has no interest right now in very close defense relations or participating in the European army or anything like this. So, they will want to have closer relations with the United States and they will pressure any new administration or second Trump administration on the importance of NATO, it seems to me. In the case there's a deal, I think the deal will be broad enough that they will throw defense cooperation in there as part of it. And then, you could well see a kind of Franco and Anglo–French defense relations blossom and then sort of kind of doing a lot more together, cooperative in the realm of European defense. On the broader question of the EU army—yeah, there is a kind of timing question. Right now, honestly, realistically, the next three to four years, this is not going to be a priority. The priority is going to be the $750 billion euros that have been approved for disbursement over the next three to four years to rebuild the economies of Italy, of Spain, of Southern Europe, of the rest of Europe, and dealing with the pandemic and the economic recovery that will come with this. There's also—it's very clear that from the Franco–German proposal of May 2020, the stress—everybody was feeling there were four points to that proposal. And then everybody was focused on point number two, which talked about the $500 billion euros in grants that was going to be financed by jointly issued bonds through the Commission and part of the budget and a lot of people hailed as a kind of Hamiltonian moment for the EU, and this was a kind of fiscal step forward. And in the end, it could be, but it could not be. Germany has sold this very much as a one-off instrument to deal with an extraordinary situation as in a global pandemic needs, and that this will be paid off over a longer period of time, but there won't be any future commitments to this. The other three points, one, three, and four talked about sovereignty. And that's a very French idea. Sovereignty and healthcare industry and pharmaceuticals that they never have to depend on other countries that are non-EU when it comes to dealing with a pandemic. Green New Deal, and digital world, and then finally, industrial policy. So these are very—so to me, it's not Hamilton, but de Gaulle, that made a comeback in this. And of course, now we are slowly starting to see that this is very much a French view, which is not particularly shared by the smaller Northern European countries, but could well be supported by Germany. FASKIANOS: Great. I'm going to go back to the raised hands and go to some Salman Al Zamel. Please unmute yourself.  I think you're still muted. You accept the prompt. There you go. And identify yourself, please. Q: Okay, can you hear me? FASKIANOS: We can. Q: My name is Salman Al Zamel. I'm from King Fahd University of Petroleum and Minerals in Saudi Arabia. The question is what are the broad options available to the UK to maintain its security stability after its withdrawal from the EU? MATTHIJS: Good question, Salman. I wish we could have others on this call answer it, but it does seem to me they have a decision to make. Are they going to have close relations with the EU when it comes to they're maintaining their security, which seems natural because of their proximity, and what they've built up over the years? But of course, Brexit means kind of severing ties with the EU and moving further away from the EU. And there, the only realistic alternative is NATO, where traditionally the UK has punched well above its weight of the fourteen commanders that NATO had, eight were American, seven were British, and one was French, traditionally. So that's an incredible amount of weight that they used to have. They are still a nuclear power; they still have a seat, of the permanent five seat with veto rights at the UN Security Council. And they remain an important player on defense markets and so on. So, are they going to have a security arrangement where they basically try to play up NATO? And how does that then sit with a movement towards closer defense cooperation within the European Union? Or are they actually going to go with, as I mentioned previously, a closer—build on the close relations they built up over the last twenty years with France and play a major role in European defense as well? And what's interesting is that there's a clear deal to be made here as well. I mean, I can see a British commitment to close involvement and close support for European defense and security, in return for more generous terms on the trade front. And so that's where I think their insistence on a kind of very narrow, bare bones free trade agreement is maybe somewhat mistaken. Because closer relations, be it for lots of services as well, financial services, legal services, consulting services, and so on, where a close relationship is fundamentally in the interest of the British economy. That could have come at a price of closer defense cooperation. Honestly, I don't think they've made—they have not made up their mind on this yet. I think this is a discussion that will start in earnest next spring. FASKIANOS: So we have several questions about Scotland and Ireland. So what is the position of Scotland on all of this? Would a post-Brexit EU accept an independent Scotland into their ranks? Do you think Brexit has pushed the prospect of an independent Scotland and a united Ireland closer to being actualized? And what effect will Brexit have on EU-Ireland relations? MATTHIJS: Lots of good questions. So in Foreign Affairs a few years ago, I launched the acronym that the UK may become the former United Kingdom of England and Wales. So, you can read it out for yourself: FUKEW, what it sounds like. And I'm afraid that is the direction we're going after January 1. That being said, it's not that obvious either. I mean, think about—let's focus on Scotland first. So, Scotland voted 62-38 to remain in the European Union. They feel very much that this has been forced down their throats, that is being steamrolled. There's very few conservative members of parliament in Westminster that were elected in Scotland, most of them are Scottish National Party. And so Nicola Sturgeon, the leader of the Scottish, the SNP, has also been very good at dealing with Brexit and dealing with the COVID crisis. She's seen as somebody very competent, and as somebody, who if there indeed is a no-deal scenario and the chaos that comes with this, will spin electoral hay from this debacle. And so there is Scottish elections coming up in the spring, and you could see the SNP do very well. They could have an absolute majority in the Scottish Parliament, in Holyrood. And then the calls for a new independence referendum will be deafening, and it will be very hard for a government of Boris Johnson that is so hammered away on democratic will, and we need the will of the people and they wanted Brexit, we need to deliver on it, otherwise, people lose all their faith in democracy, it'll be very hard to resist this. That being said, that's what they will do initially. But as opinion polls systematically now show fifty percent in favor of independence, forty-five percent in favor of staying in the Union, that's a very different fact. And, Scotland could say, well, you've fundamentally changed the Constitution of Scotland. We're no longer members of the EU and that was very important to us. If you look at the polls, what's striking, is that young people are overwhelmingly in favor of independence, while older people are much more in favor of the Union, there's much more sort of like an attachment to the UK amongst the old than there is amongst the young. So, it's different dynamics than you saw in Brexit, where it was the old overwhelmingly voting to leave, and the young who wanted to remain. So the problem with Scottish independence is there's a lot of practical problems. Scotland depends overwhelmingly on England for its economic relations. They get a lot of subsidies from London for their education, for their health care, and so on. Also the question is of the currency. Do they want to exchange the pound for the Euro? It's not obvious because the Euro also is a very austere currency, not these days, but at least that's where they want to go back. And so do they give up their dependence on London and then get immediate dependence on Frankfurt for their currency and their monetary policy? That's not an obvious story. It's also hard to imagine an actual border, a Hadrian's Wall, between Scotland and England, because there's so much traffic, and tourism, and daily work, and trade relationship that's enormous.  So, that’s for Scotland. If there is a second referendum, and they overcome these obstacles, and they do win the referendum, the Spanish won't like it, the Belgians won't like it. But will they deny Scottish entry to the EU because they're worried about Flanders or Catalonia and so on? I don't think so. I think it'll be a very important symbolic victory for the EU that Scotland becomes a member and basically take the UK's place. Northern Ireland is also very complicated because there I think it's even more likely that then the separation of Northern Ireland of Great Britain, when it comes to regulatory terms, will gradually move Northern Ireland closer to the Republic of Ireland, because that relationship will be maintained. And so, demographic trends are also in favor of Catholics and Republicans that want to reunite. And here it's not unthinkable that at some point, there's a referendum there, as well, for unification. And then you basically have this kind of scenario that we had with East Germany in the early 1990s, where a part of a country becomes automatically a member of the European Union, as well. One thing I didn't mention with Scotland which will be a huge issue is nuclear weapons. They will have to give up the nuclear weapons that are UK nuclear weapons that are stationed in Scotland to England or to what's left of the UK after they leave. This is not going to happen tomorrow. This is going to be a longer process, but you can see this dominate the next ten years of UK politics. And I think that is the fundamental irony, is that as Brexit happened, and I definitely was one that shared those fears, you're like, oh my God, European integration has gone into reverse. Here's a country, an important member state—maybe not a Euro member or a Schengen member—they voted to leave. So, the idea that a country would ever leave the European integration was never really seriously considered. And it was a quick fear that other countries may follow suit. I think that's now overblown. It's clear that what the UK has gone through, nobody else particularly wants to go through and that the Orbáns and the Kaczyńskis of the world are more interested in changing the EU in their favor than they are in leaving it because they get a lot out of it, and they know that. But the Union that's really at stake here is the United Kingdom, the United Kingdom of England, Wales, Scotland, and Northern Ireland. So it's thinkable, it's definitely among the realm of possibilities, that in ten years’ time, the UK will no longer exist the way we know it today. FASKIANOS: Thank you. I'm going to go next to, let me see, Mark—where is it? And he kindly wrote the pronunciation of his name for me, which is fantastic. Mark Kleszczewski. He's a student from CUNY Baruch College's Marxe School. Are there any special risks or outstanding issues that affect the banking and financial sectors? MATTHIJS: Can you repeat that Irina? Sorry. FASKIANOS: Oh, no problem. I said, are there any special risks or outstanding issues that affect the banking and financial sectors? MATTHIJS: Yeah, that's the great price. So, what's interesting when it comes to Brexit is that there's actually a bit of a division within the City of London in the financial sector of whether Brexit is good or bad. Hedge funds, for example, see this as a great opportunity to make money, because there's risk, there's kind of great macro risks and so on. Bigger banks rely on a lot of European clients and are worried of losing their single-market passport, where they can do business in the rest of the EU, like they can in the UK. That being said, it's my understanding that most big financial firms have already made arrangements where they have seats and presences in the rest of the EU, be it in Dublin, be it in Amsterdam, in Paris, in Frankfurt. In that way, they can continue to do business in both the EU and the UK as before. You could see the financial sector shrink in London because it's less attractive now, because it less gives you access to the European central market the way it used to. It's also my understanding that a lot of the things that govern financial services have been extended already for a longer period of time in order to avoid the kind of financial calamity on January 1, in case of a no deal. So I think the risks are much more on the trade front and in the supply chain front right now than they are on the capital flows and the financial front. That being said, Frankfurt gains from this, Paris wants to gain from this, so it is clear that Britain will lose business in the short term. And it's not clear that they can gain this back. The only way they can do this is that they can diverge on financial regulations and make it more attractive to come and do business in London than in the rest of the EU. That being said, there's so many advantages that London had in the financial sector, that these are also not going to go away overnight because of Brexit, whether there's a deal or no deal. FASKIANOS: Matthias, thank you very much for being with us today, we appreciate it. And to all of you for your great questions. I tried to get to as many of them as possible and to weave them all in, but I left a lot still unanswered. So we'll have to have you back. Thank you. Yes, absolutely. And you can follow Matthias on Twitter at @M2Matthijs. That's how you spell it. So, follow him there. Our next Academic Webinar will be on Wednesday, October 21, at 1:00 p.m. Eastern Time. Renee Bowen, director of the Center for Commerce and Diplomacy and a professor at the University of California, San Diego, and Jennifer Hillman, senior fellow for trade and international political economy at CFR, will co-lead a conversation on international trade policy. So, I encourage you to follow CFR Academic on Twitter @CFR_Academic, and go to CFR.org, ThinkGlobalHealth.org, and ForeignAffairs.com for information and analysis on Brexit, as well as other foreign policy considerations. And we have an Election 2020 portal where you can track what Biden and Trump think on different foreign policy issues. So, I encourage you to go there and I hope you all are staying safe and well during this challenging time. We look forward to continuing our conversation with you all. (END)

Panelists discuss the recent friction between the United Kingdom and European Union in the run up to the withdrawal negotiation period deadline, including the status of negotiations, the future of the European economy and inter-European trade, and potential ramifications for the transatlantic relationship.

David Scheffer: Thank you very much. Hello, everyone. I'm David Scheffer, visiting senior fellow on international law at the Council on Foreign Relations. And I've been a longtime student of Scottish devolution and aspirations for independence from the United Kingdom. We have the privilege today of being joined by Michael Russell, who is cabinet secretary for the Constitution, Europe and External Affairs of the Scottish Government, and he is a constituency member of the Scottish Parliament, representing Argyll and Bute. He was raised in Troon in Ayrshire and educated at Edinburgh University and has lived in Argyll for over 20 years. Mr. Russell was previously Minister for Environment from 2007 until 2009 and then served as Minister for Culture, External Affairs and the Constitution before moving to the role of Cabinet Secretary for Education, which he held until 2014. He was appointed Minister for UK negotiations on Scotland's place in Europe in September 2016. I can attest confidently that Mr. Russell is a close confidante of Scottish First Minister Nicola Sturgeon. And, after her, he is the most informed and articulate spokesman on issues of devolution and independence in the Scottish Government. He has spoken often of the hazards of Brexit, of Scotland's determination to remain in the European Union, and of the inevitability of Scottish independence if Westminster continues down a destructive path of its own separation from Europe. A significant majority of Scots have repeatedly expressed their desire to remain in the European Union. While the independence referendum of September 2014 failed to achieve a majority vote, in part because of the UK government's position at the time to remain in the European Union, there is a majority of Scots for independence in all of the polls reporting in recent months. Thus, the aspirations for independence remain very much alive, while the Scottish Government prioritizes management of the COVID-19 pandemic. So it's a bit complicated. Mr. Russell and I will engage in discussion for 30 minutes, and then I will open up the floor for questions. Please feel free at any time to raise your hand, and I’ll see those hands stack up, and I'll begin calling on individuals at the 30-minute mark. So let's begin. Mr. Russell, it's a tremendous pleasure to have you today at the Council on Foreign Relations. I want to start with this sort of cosmic question. The Scots have a long history of division and union with the rest of the United Kingdom, which includes England, Wales, and Northern Ireland. For those in our audience who may not be familiar in detail with Scottish history and politics, can you briefly tell us what it means to be Scottish, particularly being a Scot living and working in Scotland, or the European Union during the turbulent politics of the United Kingdom and of the world today? How committed is Scotland to remaining in the European Union? And why? Michael Russell: I think I could probably speak for the next hour on that topic and not complete it. But let me just quote somebody who may be surprising to quote, Cecil Rhodes, who said that to be English was to win the first prize in the lottery of life. Scots don't feel that way. I think that the Scottish view of the world is much more modest, much more inclusive. And the reason we regard membership of the EU as absolutely central is because we share European values and those values of cooperation. We share the view of the world as held throughout Europe. And we find it increasingly difficult to reconcile that with not the plain people of England, as Chesterton called them, but the English government and the way in which it operates. In order to be a normal nation, and in that simple normality, in order to be a normal nation, it will be necessary for Scotland to be independent within the EU. It is not normal to be in the type of constitutional setting where we are presently where a substantial number of the powers that we need to exercise are not available to us. And it is, I think, we have to see all this through two prisms now. The world has changed enormously in the last three or four months. And those two prisms are Brexit and the vote of the UK, but not Scotland, to leave the EU. Scotland did not vote to leave the EU and yet is being forced to do so. And the COVID pandemic, particularly, as I think it continues to change views. Every individual death is a tragedy, and I offer my condolences to those people in the United States who have gone through such terrible times, as we've all gone through those times. But we have to come to some conclusions about those and where we want to go next, what the future will look like. There's a tremendous book that actually originates in America, John Barry's 2005 book on The Great Influenza, which celebrates the success of American medicine and the coming of age of American science. But Barry writes about pandemics in general in that book, and he comes to a conclusion, though, what makes the difference in terms of coping with a pandemic in governmental and governance terms is quality of leadership. It is governance itself. The conclusion he comes to and let me quote it because it's really important, “The biggest problem in coping with a pandemic lies in the relationship between governments and truth. Part of that relationship requires political leaders to understand the truth and to be able to handle the truth. Those in authority must retain the public's trust. The way to do that is to distort nothing, to put the best face on nothing, to try to manipulate no one.” And I think what you may have seen in the handling of the pandemic is that in Scotland, the pandemic and the difficulties of the pandemic have added to the views that have certainly grown after Brexit, that we need to have a more honest, a more truthful, and a more values-driven politics that we are able to have, and a governance that is better for people. So we have to do a lot together, and we're not able to do that. There is a barrier between us and the world. And it is removing that barrier that is really important. And I have argued repeatedly, that devolution, the devolution settlement, the settlement under which Scotland, Wales, and Northern Ireland presently live, which is only 20 years old, has not been able to bear the weight of either Brexit or COVID, because of the demands upon the governments to serve their people. We've not been able to answer them as fully as we should, because we do not have the full powers to do so. So it's a question of where power lies, how power is exercised, and where it would better lie and be better exercised in the future. And it is not in any sense ethnic, or racial, or to do with disliking people. I was born in England. My mother was English. Her father's proudest boast was that he had bowled out the great W. G. Grace, the cricketer. If you look at the chronology, W. G. Grace must have been a bit arthritic by then, but even so, you know, this is not about being against people. It is about a modern reaction to the world in which we live. And the better way we could run things in Scotland, if we were not at arm's length from it and removed from it. So that is a long way of saying it's normal to do it. We need to become normal because it will lead to a better governance, a better equality, a better deal for our citizens, and a better relationship north and south of the border. There's a very old saying that says independence for Scotland will get rid of the surly lodger and gain a good neighbor. And we need to go to being good neighbors with the others on this island, but not to be controlled by them. Scheffer: Michael if, as the US or the UK government claims, COVID has proven that the idea of independence is not viable for Scotland, why hasn't the United Kingdom provided resources for Scotland to weather the pandemic? I just don't see much news of stuff flowing from the south to the north during the COVID pandemic. Russell: None of us are capable of making the cost of the pandemic without an extraordinary loosening of borrowing and the loosening of the public finances. I mean that's clearly true. I mean, the UK has borrowed an enormous amount, going north of £300 billion at the present moment. We do not have full borrowing powers in the Scottish Parliament. It is one of the areas of restriction upon our powers. So we have not been able to borrow the amount we feel we need to deal with it. If you look at the scale of the German response, we're not able to match that in terms of the way in which we should to spend in Scotland. Now, the way in which Scotland is financed, as you well know, is very complex, but it relies upon essentially a thing called the Barnett formula. And for every pound that is spent in London, for certain parts of government expenditure, a proportion of that comes to Scotland, but it did, according to the proportion of the population, which is about 8.6-8.7 percent at the present moment. There is a complicated balancing formula to do with public finances and taxation, because we do not have full taxation powers. Now we have spent more than we have received in that formula on Brexit. There's no doubt upon that. Equally, Brexit has cost us far more than any compensatory payments. But remember, part of the issue of the union is sleight of hand. If you keep reassuring people that everything is fine, and that you are looking after people, then they tend to believe it for a long period of time. And they tend to avoid the confrontation that inevitably will come. We have spent more than has been provided for. We are not able to borrow the money we need to tackle the job properly or the way in which we want to do so. And therefore we believe that the financing of this is far from proving that we rely on and would continue to rely on the UK. It actually proves the opposite. This gives a justification for saying we could do this better ourselves. Scheffer: Why don't you just go ahead and hold the referendum for independence if you think the people of Scotland want independence? What is the obstacle right now? Russell: Oh, this is where this is where it becomes very strange for people to believe. We can't do that. In 1997, when the Labour government was elected in London and was committed to devolution, devolution had been attempted twenty years earlier. It had failed on a referendum not because the people of Scotland voted against it, but because a stipulation was put in that referendum that 40 percent of those who were on the electoral roll would have to vote in favor of it, and it just failed. So there was a majority for Devolution 79, but it was not carried through. When the Labour government was elected 1997 with a commitment to devolution, then the sticking point for support for that from my own party, the Scottish National Party, which was very much a smaller party at that stage, was there to be no glass ceiling on the arrangement. In other words, if the people of Scotland at some future date from that, decided that they wanted to move on to independence, they couldn't be forbidden to do so. And the compromise position that was reached with the Labour government, I was there when it was reached. I was with Alex Salmond in negotiations with Donald Dewar, who was then the Secretary of State of Scotland. The agreement that was reached was if the Scottish Parliament sought a referendum, then both Parliaments would have to vote for that. But there was no question that if the Scottish Parliament asked for that it would get it. And that is the mechanism that operated in 2014, that the Scottish Parliament asked to hold a referendum. It was granted. The UK Parliament voted with it. We have asked to hold another referendum, and we have been refused on two occasions. The first time contemptuously by Prime Minister Theresa May. The second time in a complicated but equally peremptory way by Boris Johnson. So we are not presently empowered to hold that referendum. Now that is in itself a subject of debate in Scotland. Some people say that the constitution would permit you to do so. I have never believed that that is the case, because I negotiated the agreement that said something different, but we believe that if the Scottish Parliament asked for it, then it should be granted. That is not the present situation. Were that the situation, then we would be holding that referendum. The argument against it from Boris Johnson is we had one in 2014, which, you know, is equivalent to saying you had an election six years ago, you're not getting another one. Johnson has indeed said it should be a matter for a lifetime. So in other words, you had an election when you were 21. You're not getting another one until you were 60. This is democratic nonsense. But it is impossible presently for us to do so without a concomitant vote by the Westminster Parliament, which when you think about it is very strange, because the UK was able to hold a vote to leave the EU. And the EU never said, “No, you can't do this.” And if that had been done, I suspect that would have been a matter of outrage. Scheffer: Well, so far, we've talked about both the pandemic and independence and I want to bring the two issues together. What is the highest priority of the Scottish Government during this year of the pandemic? Is it to deal with the pandemic, ensure the health of the Scottish people, try to get more funding for the National Health Service, restore the economy, or is it to pursue the political agenda of independence in the event Brexit and how London handles the economic withdrawal from the European Union this year, compels Scotland to break perhaps as early as next year? Are these coterminous priorities? Russell: No, no, the priority has been an absolute priority has been COVID from the very first day. We went into lockdown on the 23rd of March. And we said the week before, as I wrote to my counterpart in the UK government that we were suspending the work we were doing on the independence referendum and that there would not be a referendum this coming year, because clearly we wouldn’t be able to prepare for one. There was no reciprocal gesture from the UK. There was an election in the UK last December. We recognize the mandate that the Johnson government had to leave the EU. We, however, won the election out the park in Scotland, 48 to 59 seats. We believe that they should recognize our mandate to hold that referendum. They have not done so. Even so, COVID was a priority and remains a priority. We've taken out a very cautious approach. There has been a four-country approach, and I think it's fair to say it did work to start with. The lockdown was a four-country approach—Wales, Scotland, Northern Ireland and the UK—the rest of UK, England, follow the same approach. That has diverged somewhat in the last two months. And certainly, we have taken a very much more cautious position particularly on easing the lockdown. Our first minister has been much criticized for it outside Scotland. Inside Scotland, she enjoys very substantial support for what she has done. And that means, for example, today is the day where pubs and restaurants can open, and that's for the first time since the 23rd of March. Hairdressers are able to operate today. I probably look as if I need one, but hairdressers allowed to operate from today. Most of these things have happened earlier in England. Health is a fully devolved matter. So we are able to operate that policy ourselves. And we have done so we have even made slightly different decisions on the closing of the borders. The UK’s list of border closures we did not accept in its entirety. We looked at it again. And there was one country that we took a different view, which regrettably was Spain. And we've not allowed visitors from Spain to come to Scotland without quarantine, although England has. And we base that on the science. We've been very driven by the science. We've set up our own scientific advisory structure, and we would continue to be that way, so we'd be very cautious, very careful, and it's not over. I would really stress this very, very strongly. The pandemic has not come to an end. You know, we've just had seven days with no deaths. That's the first seven-day period with no deaths since I think the end of February, beginning of March. But we know this can come back very quickly. If you look at the figures today in Israel, for example, where you see that at one stage they were down to 10 new infections a day. Yesterday, I think there were 1400, you have to be very cautious. So we will continue to go on being quite cautious. And the First Minister has said it is not her priority presently to move on the issue of independence. But I do think that there are things happening which will force our hand, and I've said this, to react to them. For example, tomorrow the UK Government will issue a white paper on a number of topics, which is taking powers away from the Scottish Parliament. That will produce a reaction without a doubt. Scheffer: Next year you will have elections for the Scottish Parliament. The Scottish National Party has the majority of the seats in the Scottish Parliament. Is the First Minister waiting to see what the results could be from those elections with a stronger majority, perhaps in the Scottish Parliament, before she would take a rather definitive step towards trying to seek an independence move after those elections? Russell: No, I don't think so. I mean, we have a very strong mandate. In any case, I mean, you know, we have one the last I can't remember how many elections in Scotland. But you know, we won the December election. We've won every election, I think, since 2014. You know, I don't think that is the case. I think the case is that COVID is the number one priority both to suppress and eliminate the virus and to rebuild the economy. I took part in a webinar in Brussels office this morning with a banker called Benny Higgins, who is chairing our recovery group. And you know, we are very focused on the issues of economic recovery and a green recovery. I mean, Scotland, you know, has world-leading climate change legislation. We are very focused on the green recovery. So all those things are priorities, and we need to do those. But the election is very significant next year. Because if the UK government continues in a way it's going, then the anti-devolution, the anti-constitutional change agenda will be very, very visible. And you know, that will be a place in which a decision has to be reached. The other thing we need to do is conclude this debate. I mean, I think the problem with constitutional debates is that they cause uncertainty, and it is very important that we conclude this debate. So I would want to see next year's election taking steps to say we have to conclude this, and the issue is to give the people Scotland a choice. The people of Scotland voted for a choice. We've said, for example, in the election last December, this is about choosing not to have Brexit and choosing to be independent in the EU. We won 48 of the 59 seats. It can't be really more definitive than that. Scheffer: Does the rise of the Alliance for Independence Party recently, which is more focused on trying to achieve independence, rather than the Scottish National party's current priority in governing on the pandemic and then ultimately, the independence issue. Is the Alliance for Independence a realistic threat to the SNP? Russell: I'm scratching my head to think I've ever met anybody from the Alliance for Independence. So to that extent, I have to say, probably not. I understand the frustration that people have. I have that frustration. I would like to conclude this matter. I think there's work for us to do. But you know, if you're in government, you've got other obligations as well, and you've got to fulfill those obligations. There is a sense in which the, the debate has been about whether you can game the Scottish electoral system. If you can, because we have a two-vote system, where you vote for a constituency representative and you vote for a list representative. They think if you could, if you only stood on the list in a separate party, you would get more members. Wherever that type of gaming of electoral systems has been tried, it hasn't worked. If you look at Germany, you know that they have a very similar electoral system to ours. It hasn't worked there. So I'm not convinced that this is something that we should entertain too much. Equally, I welcome everybody in the cause of independence. It’s a very broad church. You know, the SNP may be the cornerstone of it. But it's a very, very wide “yes” movement, which embraces people in all parts of the legal spectrum, so I'm not going to lose sleep over it. But equally, you know, I've been a member of the SNP for forty years. I think I'm getting too old to change. So I’ll stick with what I've got. Scheffer: Michael, is there any way for you to describe for our audience two legal strategies: one is, is there a general description of what your legal strategy would be for independence if Boris Johnson continues to balk on a Section 30 opportunity for you to have a referendum? And then secondly, is there an emerging legal strategy, under I suppose almost any scenario, for Scotland to try to maintain its ties with the European Union, single market or otherwise? Russell: It shouldn't be thought that we have been unwilling to compromise or to be imaginative in this. In December 2016, we published the first of a series of papers called Scotland's Place in Europe, which we put forward in compromise, which would have seen a closer relationship with a single market and the customs union. And of course, one has to be aware in politics, as in history, not to have false memories. At that stage, there was no declaration from Theresa May or the UK government that they wanted out of the single market. That was only really ruled out in the Lancaster House speech in January of 2017. So we thought it was a suitable compromise. And one of the great tragedies of Brexit is if Theresa May, having become Prime Minister, had sat down and brought the leader of the Labour Party, Nicola Sturgeon, and you know, Karen Jones, who was a leader of Wales, and at that stage, Martin McGuinness and Eileen Paisley from Northern Ireland and said, “Look, how do we all get something out of this? How do we all get a compromise here? That the UK can leave the EU, if that's the will of the people in England, but that we don't suffer greatly, and those who didn't want this get something too?” That never happened. Theresa May’s style was not to listen, but to talk. So you would just go to have a discussion with her in Downing Street, and she would talk at you for an hour about how you really just weren't able to understand how good the deal was that she was talking about. And that just didn't happen. So as a result of which we're left in a situation where there is no compromise for the UK. They want to leave, and that is quite clear where they are now, on the poorest possible terms, because the word sovereignty has become this enormously important word, and you can only exercise sovereignty, according to the Brexit extremists who are now in charge, by cutting all the links, by not having any substantial links at all, and similarly, by not accepting any of the rules that that organization has. Now, you know, our position is we are willingly members of the EU. We agree with the pooling of sovereignty. We think the pooling of sovereignty is how people should go forward. It does not make you any the less sovereign. That is quite clear. I've asked the French, are the French any less sovereign for being in the EU? Are the Germans? The answer is no. So the question is, we want to join that. The EU will never say to any candidate member, “You're in. Fine.” But you know, we do observe the acquis. For over 40 years, we’ve observed all the rules. Members who come to join come very often from a long way back, and they have to change a lot of their systems to meet what are the 35 chapters of accession. We don't. We qualify. We've been doing it for 40 years. So the legal strategy there is we need to understand the chapters of accession very clearly and to be able to prove to the EU that we meet them all. The issue of accession has also been a live issue with the French in recent months. The issue of membership. Montenegro was part of this. But there is no intention to exclude. We are essentially functioning as an EU member. So of course, the legal strategy there is simply to go into that position, but connected with that is the EU’s quite proper position that they would not accept a candidate member unless they were independent, because it's an organization of independent states. So you have to get yourself past first base. And that first base is independence. How do you get to independence? Well, the barrier is holding a referendum at the present moment. I don't believe the barrier is getting the majority in that referendum. I think that would happen. Now, I think things have changed substantially from 2014. The barrier is holding a referendum. And I think there are only two ways you can go about that. The first way is to challenge that in court. And I think that is the most likely outcome. COVID has interfered with that. I think if you look at the way in which the Scotland Act was passed in 1999, there was no intention that the power to hold a referendum would be withheld for political reasons. And there are also mechanisms by which you can take a bill to the Supreme Court and have it judged there. So you will have to follow a legal route, I think, to get to a referendum, or a purely political route, you know, and you might want to, you know, think of Parnell, no one has the right hold the march of a nation. If the people of Scotland say they want a referendum, if the people of Scotland say we wish to vote for this, you’re democratic, I'm democratic, anybody who is democratic has to accept that that is a right that they have to do so. And the longer you refuse to allow that to happen, the less democratic that person is. Scheffer: Let me ask one more question and then we'll open it up. What is Scotland's place in the world today and under a prospective independent status? I asked that in the context, as well, of your relationship with NATO, which would be of interest to our American audience. Russell: We plan to have membership with NATO. Who wouldn't? That has been an issue in the party over the years. I have always been strongly on the wing that says this would be utter madness, given both where we are geographically, and also where our politics are. So that would be our intention to be part of that Alliance. I suppose you could describe us as a small, moderate, moderately left of center, European nation. [INAUDIBLE]. In Scotland, we're a fairly ordinary, small, quite talented, European nation. Resource rich. We have a very, very rich set of natural resources, very well educated. We are, according to the OECD, the best-educated country in Europe. We have assets to bring to the table, but we are a small European nation. That's what we are. And that's how we would operate in the world. More than half the members, actually just under half the members, eleven of the members of the EU 27, are the same size or smaller than we are. And in a rather neat thing, we're almost exactly halfway in the table of independent nations in terms of size. So there's nothing exceptional about Scotland in that regard. You know, we don't claim to be exceptional. But we do want to be normal, to go back to that point. Scheffer: Well, thanks so much, Michael. That has been so helpful. I want to open it up to questions now. And I see some hands popping up and I'd like to start. I think the first one that popped up was Ambassador Peter Galbraith. Peter. Moderator: Ladies and gentlemen, as a reminder to ask question, please click on the raise hand icon on your zoom window. When you are called on please accept the unmute now prompt then proceed with your name and affiliation followed by your question. Ambassador Peter Galbraith Hello, can you hear me? Can you hear me? Scheffer: Yes. Russell Yes. Ambassador Peter Galbraith: First, I want to express my appreciation for this program since my ancestors left Crinan in the Highland clearances, and my grandfather, who was in Canada, was all things Scotch as the Scottish community were called there, and he would be amazed and thrilled at the thought that Scotland might be independent. As David knows, I've spent much of my career in countries, in fact, that were breaking up or aspiring for independence. In Croatia, I was the first Ambassador there, but also East Timor, as it separated. And more recently, I've spent a lot of time in Kurdistan. And one thing that strikes me is that the power for independence is where you have a separate identity, often ethnic, where they feel unfairly treated by the majority, by the dominant group. I wonder, in the case of Scotland, whether this sense of unfairness at this stage overpowers the economic argument that Scotland really needs to be part of the United Kingdom, that it receives large amounts of funds. And the second question I have, very briefly, is that when you look at how other countries have become independent, when the Croatians or the Slovenes held their referendum, they didn't ask Belgrade for permission, they went ahead and did it. Would you consider holding a referendum if, in fact, Westminster turns you down? Or you lose the court case? Russell: Interesting questions. First of all, Crinan is in my constituencies, so I am the representative for Crinan. So you can you can come and see me at the constituency office, and I'd be bound to give you an explanation then. Thank you for your question. They are very good questions. Can I just challenge you in your view that in some way we are dependent upon money coming from south of the border? That is not the case. This is an area of some contention, I have to say, between economists, and when economists contend, and you will know what I mean, I tend to stand to one side until the dust is settled. But the reality of the situation is that you can certainly take an analysis of Scottish fiscal flows and see that there is substantial resource that goes the other way. And indeed, one can ask oneself, an interesting question, “Cui Bono,” who benefits? And if it was no fiscal benefit to the UK to have Scotland as part of it, why are they trying so hard to avoid independence? So I just I think that the premise needs to be examined, as all these premises do in terms of the history of, I won't say one's economy because it's not, but if you look at the history, for example, of the British Raj, and you look at the work that's been done on that in recent years, about the position of India prior to the Empire, then you begin to see some very interesting things. So I wouldn't accept that. And therefore I don't accept that, you know, in a sense, a feeling of grievances is overcoming the finance. I don't feel a substantial feeling of grievance. I think the system doesn't work. But, in that sense, I certainly blame the politicians who are operating it, but I don't feel oppressed in that way. I'm the biographer of Winnie Ewing, who was a great SNP figure in Parliament, one of the first MPs and a long standing MEP, and she tells a story of when she was on the lobby convention in the EU. And she tells the story of meeting Robert Mugabe, who said to her that the problem with Scotland and independence is that you are not oppressed enough. I don't think that is the case. I think we have a modern case for independence. And one in which, as Alex Salmond has often said, none of us have suffered so much as a nosebleed in the course of independence. It's a peaceful and democratic movement. In terms of permission, the big issue here is not permission, but recognition. I've talked about the way in which the EU would find an application for membership, I think, to be final. It would take some time as these things do, but it would be there. But recognition requires a constitutional route to independence. And you can see with the issue of Catalonia, that the lack of a constitutional route is a barrier to recognition. So I am cautious about taking any route that does not have constitutionality at its heart. And this is a longer process, but it is one I think it has to be gone through. And, therefore, I do not envisage circumstances in which we would say, you know, we are now going to break what is the Constitution. What we need to do is to make sure the Constitution does not attempt to break the people and to make sure that it is not a barrier to the normal process of a nation saying “we want to follow a different path.” Scheffer: And Michael, can I just follow up on that and ask is one of the strongest legal points that you might contemplate the one that you made earlier, namely that where the Scottish Parliament itself is requesting the referendum, that somehow has a significant weight with respect to the UK Parliament agreeing to that? Russell: Well, it should have. I mean, if you have a structure in which you'd have four Parliament's operating, and one of those Parliament's regards itself as sovereign, that is the UK Parliament regards itself as sovereign, which is a very medieval concept, but it still does. That system isn't one that we believe is stable, and neither actually do the Welsh, and Wales is an interesting example. Wales has a Labour government, not a Nationalist government, and yet their present First Minister, Mark Drakeford, who was my counterpart in dealing with Brexit and the UK before he became First Minister, has argued that the concept of sovereignty needs to be revisited. And in the UK, the concept of sovereignty should be shared sovereignty, and it should be willingly shared sovereignty. And therefore it can be withdrawn. Just as in the EU, you can choose not to share sovereignty. In those circumstances, Scotland would say we wish to withdraw that and take our sovereignty to put in somebody else's bank. And that's the modernization of the Constitution, which the UK needs to have. Wales, Scotland and Northern Ireland, for example, all voted against the withdrawal agreement, but it didn't matter because it can be overruled. And that is a difficulty. Scheffer: Let me ask now, Paul Sheard of the Kennedy School at Harvard. Paul Sheard: Thanks very much. I'd like to ask about the currency that Scotland would have or aspire to have, if it gained independence from the UK and tried to rejoin the EU, and what kind of monetary arrangements Scotland would aspire to have with the UK in the interim? And of course, in asking this question, I'm mindful that the euro is the currency of the EU. And the UK had a derogation from ever adopting the euro. But a rejoining Scotland presumably would not have that derogation, automatically at least. Russell: There is no obligation. I mean, this is an interesting issue, as you clearly know, because it's been a controversial issue in the first referendum and will be in a subsequent referendum. There is no obligation upon a member state joining to take on the euro. There's an expectation, but there is a process to go through, and for example, Sweden did not go through it and did not take the euro and is not a member of the euro area. I'm not going to give you a definitive answer on this. Because the moment I do, somebody will jump on it somewhere else and say this is why you can't do it. Rather strangely, the issue of whether or not Scotland could have its own currency, could continue to use a sterling in a sort of sterling area, or should go to the euro, is a matter of huge debate within Scotland by the anti-independence forces. All of which seem to end up with the view that Scotland cannot make any choices about its own currency uniquely in the world, that Scotland would have to end up with cowry shells or something, because it just couldn't have a currency. And what we've said very cautiously, and we are cautious about this, is as we approach a second referendum, we'll lay out the options that we have. We have talked about whether those options should include the continuation temporarily of a sterling area, with a number of tests that were applied before we move to our own currency. Some people have argued that the euro would be a suitable currency. I think, you know, there's been such a tabloid press attack upon the euro for years. I mean, one of the problems with Brexit, there’s been something got up substantially by this tabloid press. There's been such an attack on the euro for years, it's very difficult to have a rational conversation about whether the euro would be the right option as well. So, Paul, I'm going to disappoint you by not giving you a definitive answer. I am going to say there is, and will have to be, a definitive answer. But it's one which I think is as an aspirant country, we should only go to when we are ready with the Scottish people to have that debate. And at the present moment, that debate would be nightmarish, because it would be seen as a lightning conductor for everything else. Scheffer: Thanks. I think the next person on my list is Hani Findakly. Hani Findakly: Thank you very much. This is quite an interesting discussion. I'm not familiar with the politics of Scotland and the UK, but I have looked at the economics of countries that have broken up, starting with the India-Pakistan breakup and looked at about 30 countries. And while there have been a few exceptions, maybe about 10-20 percent, the majority of countries that break up tend to do worse than they would have done under a union and some of that, I think, is for obvious reasons. But another part is because of what economists call externalities. Things that we don't account for, and they interact with other things. So, you know, this is history. What's more important is looking forward, and it's fully understandable the emotional and other forces that drive that. But with COVID-19 and the expectations of some kind of a new normal with changes in the world economy, trade, the value of natural resources, and other things that countries depend on for their economic performance, I wonder if you have been through that kind of analysis and whether or not you have expectation that changes in the new world after COVID-19 will continue to be a benefit a breakup of Scotland from the union? Russell: Well, I'd refer you to a paper we published last month on the expectations we have of both a COVID recession and a Brexit recession. Whereas the rest of Europe will be suffering severely from a Brexit recession, they will have the advantage of what appears to be, and this week's EU summit will confirm it, you know, a pretty exceptional response from the EU 27 in terms of the MFF agreements that they're going to reach, and they're likely to reach with the leadership of Germany actually making sure that they do. They will not have a Brexit recession. So the UK will be double dipping in its approach. And that's one of the reasons why we believe Brexit should at the very least have been postponed. There was an opportunity to postpone the negotiations by up to two years, which the UK refused to do. And that would have been helpful. So our view is, as part of the UK, the economic prospects are very poor and will continue to be poor for longer and will be worse than we would otherwise have it from the COVID recession. I think it was the Financial Times that estimated that the recession would be the worst for the UK since 1709. I have no personal experience most of that period. But if that is the case, then I think we've got problems there. The second issue to consider here is the nature of Scotland, and as it is just now, Scotland is actually a rich country. I mean, you have to step back a little, and look at it. It has a small population, which is well educated. It has a very substantial amount of natural resources both of the 20th century and of the 21st century. It has a pretty considerable reputation and ability in exports. The number one food export of the UK, which is whiskey, of course, is a Scottish export, but actually, Scotland's export offering is very wide-ranging. So there is no reason why Scotland should not flourish. The fact that it isn't flourishing now might say something about how its economy is managed, and its economy is managed by the UK. And you know, when you look at that in the light of other experiences of economies being managed at a distance, and say that actually also may be a considerable issue to factor in. So my expectation is that choosing independence now, I don't think any of us can avoid the COVID recession. But I think it will mean that we would avoid the Brexit recession. It would also mean that the potential of the Scottish economy and the Scottish people were fulfilled. Our recovery plan leans heavily on the issue of natural capital. And I think if you look at the issue of natural capital, and the work we're doing as a well-being economy, I think you can see considerable advantages. So I'm not pessimistic about this. And I think there are occasions in which countries that go their own way suffer from it. As in personal relationships, if these things change, then people can flourish, and I would expect us to flourish. Scheffer: Thank you. The next individual is Julia Moore. We can't hear you quite yet. Julia Moore: Okay. I apologize if this question has already been asked or was the issue was addressed earlier. Because as you can see, I'm technologically challenged by this zoom technology. But let's assume that your Scottish exit happens constitutionally as you hope, and as you describe, what makes you believe that Scotland could overcome the tremendous obstacles to getting, forget the euro, getting membership into the EU and into NATO? Russell: Well, my personal conversations have convinced me that that is a case, to be honest. I spend a lot of time talking to people. It seems to me that the enthusiasm for having a small, new, highly educated, wealthy, and sharing European values country as a member of the European Union is likely, to be blunt, to be virtually irresistible. You know, there is no work to be done. There’s no queue. Nobody stands before or after anybody else. You have to qualify. But you know, I think it would require quite a lot of imagination to say that Scotland, being as it is, does not qualify. And certainly, the people I talk to regularly and all of the countries believe that Scotland will be a suitable candidate member for the EU, and will be accepted as such. And indeed, it would be very strange if it wasn't. This was, of course, an argument that the UK put during the 2014 referendum as David referred to earlier. And that argument was that an independent Scotland would not be a member of the EU. Now, David Cameron as the UK Prime Minister called in a lot of favors to get a few people in the EU to say that, and Scotland was affected by it. Because for many Scots, being in the EU is extremely important. But I have absolutely no doubt from my experience, from who I talk to, and from what they are saying because, you know, many European figures are saying this entirely clearly, Scotland would be a good fit for the EU. In NATO, I think that's also the case. I can't imagine that NATO would want to say no, that's not suitable to have. If you look at NATO membership, and if you look at our geographic position, I think that would be a strange decision to reach and a quixotic decision to reach. Whatever else you might call NATO, I don't think I’d call it quixotic. So I think in all those circumstances it is fairly obvious that will take place. It will take the procedure of admission. It will take, before that, the procedure of application. But what is different about Scotland? I would fail to understand that. Scheffer: You know, I might add, Michael, an answer to Ms. Moore’s question. I certainly recognized when I was in the quarters in 2014 in Brussels, skepticism because of exactly that point that you raised, that they wanted to simply maintain the United Kingdom as a full coherent nation, a powerful one, within the European Union. However, of course, because of Brexit, I had to witness with great interest that last summer, when the First Minister Nicola Sturgeon visited Brussels and gave some speeches there, she was feted almost by the European Commission and the European Union officials. It was a very, very different reception for Scotland. One that was very supportive and understanding that Scotland has a tremendous amount to contribute to the European Union. So, the tide, as far as I could see, had completely turned by last summer. Russell: I attest to that. I mean, I was around in 2014, of course, and you know, in recent years I have been talking to lots of people. But, Van Rompuy, the former president of the Commission and a former Belgian Prime Minister, so not a man fond of separatism in any description, has been on the record saying if Scotland applies and Scotland qualifies, which it does, Scotland will be a member. And I'm not asking people to be wildly enthusiastic about it. But that's the fact. You know, if we qualify, and we do qualify, and if we observe the acquis, which we have done, then we will be a member, and that's what we would want to do. Scheffer: Let me turn now to Frank Klotz, who is retired from the US Air Force. Frank Klotz: Thank you very much for an excellent presentation. I'd like to follow up with one of David's questions and your answers related to NATO. For many years now, NATO leaders have endorsed the importance of the UK’s independent nuclear deterrent force to NATO defense strategy. The UK independent nuclear deterrent depends, of course, on its space in Faslane. The SMP’s position in 2014, prior to the referendum, as I recall, was that continued presence of nuclear weapons in Scotland was not to happen. Has that position changed since? And if not, how would you see the UK’s concern, and ultimately NATO’s concern, about the future of UK nuclear forces being resolved? Russell: Let's start with the obvious, which is, you know, a small country of five million people is not going to possess nuclear weapons and shouldn’t. Scotland has no interest in so doing and would, therefore, not be a nuclear nation. Our position has not changed on Faslane. I think there's a substantial majority in Scotland who do not wish to see nuclear weapons on Scottish soil, and you know, I am one of those people. We may take a different view on these matters, but I am sitting as the crow flies about fifteen miles from Faslane across this lovely lock outside, and I therefore think I would feel perhaps a bit better if that was not happening. We said during the 2014 referendum that we recognize that doesn't happen overnight. And that therefore there would have to be a period in which that was negotiated and took place. But we would expect to negotiate having those nuclear weapons not in Scotland. Now, that is a matter, of course, which would have to be discussed with the UK and with NATO. But that would be our position. Now, it could be a different government in Scotland than the one that I would favor, but I think, broadly in Scotland's there is a pretty wide agreement upon that. In the UK, the Labour Party has always espoused the continuance of a nuclear deterrent. That is not true of the Labour Party in Scotland, by and large. So I think that would be likely almost under any dispensation. We believe in strong conventional forces. We talked about how those might be arranged in an independent Scotland and you know, we would follow that and we would wish to be part of NATO, but on that one, we do not wish to see nuclear weapons in Scotland. Scheffer: Michael, is there any particular opposition in Scotland to out-of-theatre operations by NATO? In other words, if you become an independent nation and join NATO, would we see Scottish soldiers in a future type of Afghanistan situation with other NATO soldiers? Is there any point of view on that? Russell: Yeah, I think the two areas in which we've expressed our interest and concern. One is we regard NATO sanctions as being extremely important and the NATO umbrella being extremely important. So as a member, we would meet members’ obligations. If we felt those obligations fit with our own view of the world, and we also believe in the European defense model, then we'd go along with that. We're also very interested in the way in which Ireland, for example, has carved out a place for it in terms of UN peacekeeping. And we do think there's a role for Scotland in that. We have a day efficient and effective contribution from our armed forces, Scottish regiments and Scottish soldiers. We would have thought we would want to see that within that context. But you know, we are committed to NATO membership. We're committed to working with Europe on defense issues, and we're committed in terms of UN action too. So we wouldn't be standing back, but equally, we'd be doing it from our standpoint. Scheffer: I want to entertain more questions. So I'll keep my eye on the roster here. But I actually have two I can pitch at to you in the meantime. One is, did you just have a special session of the Scottish Parliament? If so, why? Was it all virtual, and what was the big deal? Why did everyone have to get called back in July? Russell: Well, you know, we have a work ethic. Unfortunately, and necessarily, during the COVID epidemic, nobody believes that we should be away for a substantial period of time. We are technically on recess, but we're meeting in three weekly cycles. Because the First Minister, and the review of our regulations under COVID takes place every three weeks, so she addresses the Parliament, and we deal with that. And we do virtual questions sessions because we believe that that we should still be answerable to the country through its representatives. We are able to do quite a lot virtually. Where I'm sitting in my outdoor study in Argyll looking over Loch Riddon, I've done a parliamentary statement from here. I've answered parliamentary questions from here. I've appeared in front of parliamentary committees from here. Edinburgh is about three hours by car, so I've driven through on four or five occasions to do things there. But it is not a normal year. So our normal pattern would be we would end in the end of June. We would start again at the beginning of September. We finished at the end of June. We will start again on the 11th of August when schools go back. Schools have been off since the 20th of March. Schools go back on the 11th of August, and we will go back then. But I will be in parliament on the 29th and 30th of this month, and I will be doing a statement of some sort before then. So, we keep ourselves busy. We believe in serving the people. Scheffer: But there's no particular crisis this month regarding London's negotiations on Brexit or anything? Russell: Well, I think the reason I may have to give a statement before the 30th will be, you know, we're certain there will be a white paper from the UK Government tomorrow, as I said, on issues which we believe, substantially undermine the devolution settlement. So that will be part of it. But you know, the main issue is COVID. And the main issue is making sure that we keep the Parliament and the people informed of that. The first minister undertakes daily press conferences on COVID. Up until now, they've been five days a week. I think that will change shortly. But we still do them. They are televised. She is open to press questions for a lengthy period of time. And the quote I gave you earlier about truth and being honest with people is what we try to follow. So we've tried to make sure that people have all the information they need. Scheffer: I believe Peter Galbraith has another question, Peter. Ambassador Peter Galbraith: Thank you. And I wanted to just say I was not being critical of Scottish independence when I was asking about the economic issue. It was the sense that often in these circumstances, where people feel they're, in the case of Scotland, dragged out by what England did, that can overcome economic issues. And I also think I've pointed out that countries often do very well after independence. Obviously, the Baltic countries case in point. In fact, Croatia and Slovenia, clearly better without Yugoslavia. My question is how do events in Northern Ireland affect the Scottish situation? I think the polls show that there is a majority now for a united Ireland or at least very close. There's a process perhaps you might explain for having a referendum there. Do you see that process going forward with Boris Johnson's government? And I guess it would raise the question of if they are willing to do it in Ireland, how could they say no to doing it in Scotland? Russell: We've always accepted the special situation in Ireland. Ireland is recovering from, you know, a generation of civil war essentially. It is not like Scotland, and therefore, we've always accepted special arrangements for Northern Ireland have to be made and for Ireland. And we've never drawn equivalences with that and wouldn't do so. And it's quite dangerous to try equivalences, as you well know, between national movements in various places. You know, everything is different. But there are some interesting issues in Northern Ireland, and a special settlement within Brexit is a particularly important one. There is a special protocol in the withdrawal agreement that means that Northern Ireland will sit somewhere between the EU and the UK. It will have regulatory alignment with the EU and the border will therefore not be a border, per se, in terms of goods, and it will be treated in a special way. Now our view is if that is possible for Northern Ireland, it should have been possible for Scotland, and there should have been some special arrangements with Scotland, and that was not reached. The question of Irish reunification is a very, very different one. You know, there are a number of players in there. I think the new Taoiseach in Ireland, Micheál Martin, has made it clear that he doesn't think the time is right for a border poll. And the border pool can be called with the consent of both sides, but I don't think that's likely to happen immediately. I think it's likely to happen at some stage. But a lot of this is the same issue. And the issue is, Brexit has precipitated change that was underway, In any case. Northern Ireland voted against Brexit too. The only part of the of the island, so to speak, that didn't get anything it voted for was Scotland. Wales voted for Brexit narrowly, but voted for Brexit. England voted for Brexit, Northern Ireland voted against it and is getting special status. Scotland voted against it, and it's getting nothing. And the tensions created by Brexit have exacerbated what was an ongoing process. You've got to look at the issue of Scottish independence not as some modern phenomenon. This has been going on for well over 100 years. The establishment of the committee for the Vindication of Scottish Rights in the 1850s and 1860s, they campaigned for restoration of the position of Lord Advocate. The growing administrative devolution that took place in the late 19th, early 20th century, and there's a school that would argue that what has held us back were a number of events, which renewed UK solidarity or British solidarity: the two World Wars, the creation of the of the National Health Service, and so on. But the process has been going on. I mean, you know, I mentioned earlier my grandfather. My grandfather was a publisher. He was an Englishman, but he was a publisher in Edinburgh. I think he would be astonished that there was a Scottish Parliament, because he died in the 1960s, and it was a long, long way then. I mean, there was certainly no majority for it. I think he’d be astonished that his grandson was in a Scottish Parliament, a minister in the Scottish Parliament, perhaps even more so, discussing this with a distinguished American audience on a night like this. There has been a process underway, and that process continues to be underway. And that is true in Ireland as it is true in Wales and elsewhere. It is a question of how those that process comes to a conclusion that I think we're now talking about. Scheffer: Thank you so much, Michael. This has been a tremendous conversation about the past, present, and future of Scotland. And I deeply appreciate it and the Council on Foreign Relations and all of our participants do as well. You take good care of yourself, stay healthy next to the Loch there. And we'll see you. Russell: Thank you very much.  

After the United Kingdom’s January 31 deadline to leave the European Union, questions remain regarding how Brexit will affect the United Kingdom’s relations with the European Union and the United States. Our speakers discuss the transition period, the consequences of Brexit, and what to expect in the coming year.