England: is the Euro-crisis making a UK break-up less likely?

Just as Scottish independence becomes more popular in Scotland, and Plaid opts for secession for Wales, the EU starts to break.

Political ineptitude in Brussels, Berlin, Rome and Paris is cause for major concern. 

John Redwood, a Eurosceptic Tory MP, stated in a letter to The Economist that Europe was still "pressing ahead with full monetary and political union." But we see little sign of that across all of Europe or even inside the Euro 17. 

Fiscal union is balked at by southern Europeans, many of whom might have to leave the Eurozone altogether soon anyway. While the UK, IMF and US call for rapid action from stolid and market-naiive northern Europeans to stave off disaster, we've witnessed slow reaction from Berlin, Brussels and Paris taken too late to reverse adverse market sentiment.

If the European Union fragments into the Periphery and the Core, as pundits now predict, then where would an independent Scotland, and less likely independent Wales, sit?  

Inside the core, and part of a United States of Europe? 

• This would necessitate Scotland or Wales forfeiting their independence once again. They'd adopt the new Euro, and would be even further divorced from the centre of gravity in Frankfurt than they are at present from London.

• Changes in interest rate policy would affect them adversely, as you can bet that rates would be set to benefit Germany, with little or no consideration given to the economies of Scotland or Wales.

• At present neither country exports much to Germany, and that would be bound to continue. They'd be forever in hock to the European Central Bank, just as deficit-running Virginia is to the Fed in the America.

In the Periphery?

• This would leave Scotland and Wales exposed. Both are small economies, with Scotland roughly the same size as New Zealand (ranked 52 in the world) and Wales equivalent to Slovakia (rated 60). 

• Both now use the Pound Sterling, but would that change? If their currencies floated they'd be battered by global market pressures, and they'd no longer have the weighty English economy and London investment intelligentsia to stabilise the situation for them.

The modern dynamics evolving in Europe present new challenges to the independence lobby. It'll be interesting to see how they respond to these. And how successful England is at retaining the Union. Maybe now is the right time to revisit the concept of a federal UK? But that concept has always been kicked into touch by those who say England is far too large a constituent country and would need to be broken up, which would entail added bureaucratic costs. True, so would a confederal system not work better?

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Postscript: A confederal United Kingdom?

Ireland has experienced a sharp wake-up call in its erstwhile love affair with the European Union. Perhaps after the warm reception given to the Queen on her recent Dublin visit, a confederal set-up could be an option for a forgiving Ireland too.

States of a potential confederal United Kingdom might be considered:

1. Anguilla (population.13,600)
2. Bermuda (pop. 67,800)
3. Caymans (pop. 54,900)
4. Cornwall (pop. 534,300)
5. England (pop. 50,911,700 excluding Cornwall)
6. Falklands (pop 3,100)
7. Gibraltar (pop. 29,400)
8. Guernsey (pop. 65,600)
9. Ireland (pop. 6,197,100 including Northern Ireland)
10. Jersey (pop. 92,500)
11. Man, Isle of (pop. 80,100)
12. Montserrat (pop. 5,900)
13. Saint Helena (pop. 5,700 including Ascension and Tristan da Cunha)
14. Scotland (pop. 5,222,100)
15. Turks & Caicos (pop. 44,800)
16. Virgin Islands, British (pop. 27,000)
17. Wales (pop. 3,006,400)

Leaving the following as British Overseas Territories:

1. British Antarctic Territory (pop. 250)
2. British Indian Ocean Territory (pop. 4,000)
3. Pitcairns (pop. 60 including Henderson, Ducie and Oeno Islands)
4. South Georgia and South Sandwich Islands (pop. 30)
5. Sovereign Base Areas of Akrotiri and Dhekelia (pop. 7,000 Cypriots and 7,500 British military personnel and their families).

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