Saturday 6 October 2012

A tale of two SNPs

No doubt many of us remember that rather hard to spell country Czechoslovakia. It split in two on 31 December 1992 and became the Czech Republic and Slovakia.

This may well seem to be, as a certain prime minister notoriously said, a case of a faraway country of which we know nothing, but it is actually very relevant to the situation in present day Scotland and the debate about independence. 

The Slovak National Party (SNP) brought about independence for Slovakia even though only 37% of Slovaks and 36% of Czechs wanted to break up their union. The way they brought about separation was to continually demand ever more devolution, which eventually made the Czechoslovakian state completely unworkable. Eventually the Czechs demanded  either a viable federation or two independent states and Czechoslovakia split even though the vast majority wanted it to remain united. 

There was no real reason for the split. Czechs and Slovaks are virtually indistinguishable to outsiders, each speaking a very closely related language. But once the SNP began working its magic, creating division where before there was unity, emphasising national difference and stoking up resentment, divorce was achieved even under the most unfavourable of polling situations. Hardly democratic, but then nationalists are not normally known for their love of democracy. 

The Scottish National party (SNP) has closely studied the example of the Czechoslovakian split and it is is obvious that they wish to follow a similar model in breaking up Britain. It is for this reason that they are so desperate to get a second question on devo max. They know that devo max, would make the UK unworkable, just as it made Czechoslovakia unworkable. They know that eventually London, would be forced to say either accept a viable union or leave, with the likelihood that Scotland would leave. Therefore Mr Salmond wants two questions  in his referendum. Vote for Independence and you get independence now, but if you vote no to independence and vote yes to devo max you still get independence only a little later. That’s how a nationalist party can win independence even when only around a third of the population want it. Not very democratic of course, but who said nationalists were democrats?

One of the most interesting parallels with the breakup of Czechoslovakia is the issue of currency. Originally it was the intention that the Czech Republic and Slovakia would retain the same currency, rather like Mr Salmond wants to retain the pound. Within a few weeks after the split in Czechoslovakia however,  the Czech and Slovaks had set up their own currencies. The Slovak currency fell by around 30% against the Czech currency. Slovakia eventually chose to join the Euro while the Czech Republic retains the Koruna. 

No one can know for sure what would happen in the event of an independent Scotland trying to stay in the Sterling zone. What we do know however is that economic circumstances as well as potential hostility from the rest of the UK could force Scotland to leave. A monetary union without a fiscal union offers no guarantees. Under those circumstances Scotland’s new pound could rise or fall versus Sterling, and just as the Slovak Koruna fell versus the Czech Koruna, so Scots pound could fall versus the pound Sterling. The last time Scotland was independent 12 pounds Scots bought 1 pound sterling.

I wonder how the Slovaks feel now about having left their union with the Czechs, I wonder how they feel about the Slovak National Party (SNP) which led them down the path which ended up in the Eurozone and who knows where thereafter. I bet there are quite a few who wished there had never been an SNP. You can see their point really.