Cameron begins his Scottish dance

May 15, 2015

Scotland's First Minister Nicola Sturgeon and Britain's Prime Minister David Cameron pass each other as they pay tribute at the Cenotaph to mark the 70th anniversary of VE Day in London

British Prime Minister David Cameron will hold talks in Scotland with the other big winner in last week’s elections, Scottish nationalist leader Nicola Sturgeon, who has already warned him it cannot be “business as usual” with Scotland.

After failing to win an independence referendum last year, the Scottish National Party almost swept the board last week, taking 56 of Scotland’s 59 seats in the Westminster parliament.

It had declared its intention to shut the Conservatives out of government by backing the opposition Labour party but the numbers did not stack up.

Having used the prospect of a Labour government supported by the SNP to scare voters, and stoking English nationalism in the process, Cameron has now pledged to reunite the country. He may eventually offer the Scots full fiscal autonomy as part of a sweeping new devolution of powers.

That is a tricky one for the SNP. The economics of independence looked shaky last year and since then the price of oil has plunged, revenue that an SNP-led independent Scotland lays claim to. So having campaigned on an end to austerity, Sturgeon may be forced to deliver the opposite if she had full fiscal control of her country.

Her predecessor, Alex Salmond, has already talked about London continuing to underwrite the Scottish government for any debts that may mount. That is surely a bridge too far.

It’s no less problematic for Cameron. Giving Scotland sweeping fiscal powers and at the same time promising another five years of austerity for the rest of the country holds obvious perils.

Scottish parliament elections are due next year and the SNP could use that platform to push for a second independence vote. If Britain were to vote to leave the EU in a separate referendum, due by 2017, that may well push pro-European Scots towards secession.

With Thursday having been a holiday in much of Europe today is what’s called a “bridge day” – i.e. another day off to glide into the weekend.

Despite that, negotiations over a Greek cash-for-reforms deal continue. Athens offered a concession to its international lenders on Thursday by pushing ahead with the sale of its biggest port, Piraeus. But it refuses to countenance separate demands to cut a bloated pension system.

Prime Minister Alexis Tsipras and Finance Minister Yanis Varoufakis are both due to speak at a two-day Economist conference in Athens which begins today.

Money is running very short – the last deadline voiced by Varoufakis was two weeks hence. But sympathy from its euro zone partners is scant.

Bundesbank chief Jens Weidmann criticised weekly top-ups of emergency funding to Greek banks, saying they broke a taboo against the European central banking system financing governments.

The European Central Bank has turned a deaf ear to Greek pleas to be allowed to issue more treasury bills. Fitch is due to review Greece’s credit rating, which is hovering just about the default category.

After Hungary posted solid quarterly growth of 0.6 percent in the first three months of the year and Romania came in with a hefty 1.6 percent gain, today we get equivalent figures from Poland and the Czech Republic.

The Czechs are forecast to post growth of 0.8 percent. Poland only gives a year-on-year figure which is predicted to come in at a robust 3.3 percent.

The Burundi authorities have arrested three generals for their role in an attempted coup but the leader of the bid to overthrow President Pierre Nkurunziza is still on the run, a presidential spokesman said.

Nkurunziza returned to Burundi on Thursday after the army chief declared that an attempted coup staged when the east African leader was abroad had failed.

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