Scotland Looks (Back) to Europe
ANYONE feeling overwhelmed by the press of just too much happening in these recent weeks would be well advised to make a visit to Scotland.At a time when just about every day brings a report of some part of the world map that must be redrawn, the Scots are holding steady and sticking with the fundamentals. A particular expression of this steadiness is the Scottish response to economic integration and other developments within the European Community. Margaret Thatcher, as British prime minister, was profoundly uncomfortable about the concentration of Europower at the expense of national sovereignty. Her approach to the issue became counterproductive, even from the perspective of those who agreed with her in principle. But the Scots, at least those in the business community, remain remarkably unflapped about the prospect of being one of the remotest outposts of the single European market. After all, they know a thing or two about coping in economic union with a much stronger partner; they've been doing so since the union with England in 1707. The national sovereignty questions seem to them simply "a Westminster matter." If Scotland is used to dealing with a much larger partner to the south, it is also used to having its own connections with the continent. That Mary Queen of Scots was French on her mother's side is only one particularly concrete example of this. And the Dutch-style gabled architecture still visible in parts of Edinburgh is a reminder of the Middle Ages, when Scottish wool was shipped across the North Sea to the Netherlands for manufacture into woolen cloth. The opening of the New World and the expansion of the British Empire turned Scotland outward, and benefited Glasgow at the expense of Edinburgh: Ships set forth from Glasgow for North America, and Glasgow was as convenient a point as Edinburgh from which to set sail for Africa and India. Now the continental connection resumes its importance, and Scotland is looking back to Europe. The financial sector looms large in the Scottish economy, particularly asset management and life insurance. With only 8 percent of Britain's population, the Scots have 35 to 40 percent of the nation's business in these two areas. Capital accumulated to finance the Industrial Revolution stayed in Scotland, or rather in Scottish hands, and went on to finance North American railroads and other ventures around the globe. Now Scottish financial managers see new opportunities within Europe, in the handling of pension funds, for instance. The Scots take some ribbing for their thrift, and insurance and pension funds may not be the most glamorous lines, but they do all right. "You don't have to react to every opportunity that comes along in order to survive," observes a financial-sector official. The Scottish approach to investment may be described to American readers as more Warren Buffett than John Gutfreund. Willingness to let some opportunities go by may mean less profit at some points - but also less downside risk at others. There is still plenty of money to be made. The question remains, though: How confident can a place so far from the center really be about 1992? Yes, an Edinburgh bank economist allows, if I had a concern, peripherality would be it. Improved telecommunications and transportation would, of course, help. Ironically, he says, the best way to help Scotland would be to invest in the infrastructure of England, notably highways. And Scots will do just about anything to avoid having to fly through London's Heathrow Airport; they eagerly await expanded service from Edinburgh and Glasgow airports. Scots waste no time making a distinction between themselves and the English, and a certain political separatism is a mainstream point of view: Many Scots expect some form of devolved government within a few years so that strictly local matters can be handled in Scotland rather than by Westminster. Not so the financial sector, whose members avoid any impression of political "turbulence," as one puts it, that would limit opportunity in the new world of 1992.