An ill wind blows outside the summit cocoon

WHEN Europe's leaders fly into Edinburgh today, one thing you can be sure will not be on their minds is the complex, unstable politics of the country they are visiting. Like the city itself, the old Palace of Holyroodhouse will be merely the picturesque backdrop for a private inter-governmental haggle. Everyone from bankrupt fishermen to hordes of angry home- rulers will be converging on the city.

What of their professed target, the polyglot band of travelling politicians, journalists and diplomats? The politicians will be too busy to notice. The rest of us will be puzzling about the differing versions of subsidiarity being given by Danish and Belgian apparatchiks, dabbling in the free food and gifts and studying the flight times home. It will be a little reminiscent of some medieval royal progress in a backward region, with the hacks as insolent hangers-on, complaining about the winter wind and studiously ignoring the petitioning peasantry.

Anyone who does stumble out of the summit's cocoon to study the state of Scottish politics will find it a dismal and unedifying spectacle. Labour, Scotland's bigggest party, is struggling sadly to come to terms with the problem of being both dominant and impotent. Its new leader, Tom Clarke, is off sick until the new year. Labour has lost a series of local council elections in Glasgow to expelled Militants. Labour's bitter rival, the Scottish National Party, has been riven by feuding. The Scottish Constitutional Convention, a cross-party home rule body that was Scotland's most interesting contribution to the politics of the Eighties, is searching for a role.

But here is a curious thing: this mood of pessimism and bickering among the Scottish political classes comes at a time when bread-and-butter issues here are the subject of both intense anxiety and intense activity. In sharp contrast to the spring election period, when many Scots enjoyed a shiver of schadenfreude at the spectacle of plummeting southern house prices and struggling yuppies, the recession has finally arrived in the North. Tens of thousands of jobs are threatened at the submarine base of Rosyth and in defence-related electronics companies.

Outside the industrial heartland, too, there is a mood that seems tinged with a rare militancy. Scottish fishermen have resorted to blockade to protest about their dire financial straits. Most of Scotland gave a cheer when 100 crofters from Assynt managed to buy their estate; and a ruling in the Court of Session suggests that other crofters may start trying to take on the landlords once more.

More seriously, perhaps, the Scottish whisky industry is mounting a strong (and justified) lobbying campaign to protest about the high duty levied on Scotland's national drink - nearly double, by alcohol content, the tax on imported wine. Finally, in one of the wettest countries in the world, the case for privatising the water industry is causing perplexity.

The strongest argument that the unionist opponents of home rule have had was that staying with the Westminster system was good for Scottish prosperity. This is getting a little tricky to maintain. So there is clearly a bit of a paradox here, since the electoral cycle has pushed the home-rule movement into depression and division.

The modern history of Scotland suggests, however, that the country's politics are unstable: at some point in the next five years expect a surge in Scottish nationalism. The next push may well come from Europe. However many Scots march through Edinburgh this weekend calling for home rule, their voices are unlikely to reach the minds of the summiteers or, frankly, the hangers-on. But if the long slog to European union is not about to end in acrimony, then real subsidiarity - passing power down as well as up - will start to emerge from dry and private treaty debates. It will become a living and contentious issue. More and more, Scotland's 'unconstitution' will come to seem a strange, voiceless relic of an earlier age. Perhaps the goings-on inside Holyrood tomorrow, and the hoarser goings-on in the streets outside, do have a connection after all.

A cracked edifice

AMID all the pious silliness that these royal dramas provoke, nothing has been sillier than the rush, from the Prime Minister downwards to Lord St John of Fawsley, to reassure the nation that 'no constitutional consequences follow'. The monarchy is not some fine old cathedral, off which the occasional stone princess can fall without threatening the structure. It is a human edifice, not a limestone one.

Human edifices are inescapably political. As the Queen's decision to pay tax shows, the strength and self-confidence of the monarchy cannot be separated from the esteem in which it is held. Or the lack of esteem. The monarchy is supported principally by older Britons; and the Queen Mother cannot be the only old lady who profoundly disapproves of the conduct of its its younger members.

The damage to the Windsors is real. We cannot know where it will end. Will the Prince of Wales make a fit King? Will he want to? What will be the effect on him, and the monarchy, if a telephoto lens captures some future lover of his estranged wife? There can be no citizen of this country who still believes the Royal Family is magical, or in a different world, or particularly virtuous.

John Major - a candid friend of the Queen, as his predecessor was not - did his best to limit the damage. Close friends of Prince Charles praised Mr Major for his even-handed, sympathic approach. But he was wrong in the Commons. Constitutional consequences may well, one day, follow. Yesterday was not a conclusion to anything; it was part of a process.