Scottish Independence... What are your thoughts?

[MPS16]

No, the pound sterling is the currency of the UK, controlled by the Bank of England. Scotland, if they chose, could have a currency called the pound but it would not be the pound sterling....

I was thinking about Ecuador as an example of an independant country using an other countries money.

In the case of Ecuador they use the USA Dollar.

[astral276]

I was thinking about Ecuador as an example of an independant country using an other countries money.

In the case of Ecuador they use the USA Dollar.

You mean currency substitution? That means giving up control of the levers that govern the currency (e.g. exchange rates). That would not be in Scotland's interest, and totally at odds with independence.

[MPS16]

You mean currency substitution?..... That would not be in Scotland's interest, and totally at odds with independence.

Yes I totally agree.

But it is one of the options available to an independant Scotland.

[billsstamps]

You mean currency substitution? That means giving up control of the levers that govern the currency (e.g. exchange rates). That would not be in Scotland's interest, and totally at odds with independence.

It can be in the interest of a small country as a transitional arrangement, like Montenegro using Euro.
But Scotland is not so small, yet is it large enough to afford the apparatus of Pound Scotiae?

[tonyreddevil]

They have Scottish £5 notes administered by the Banks in Scotland.Why cant they do the notes and coinage

[PetBazaar]

So are the SNP going to present a 'Plan B' to the Scottish people now that the UK government has ruled out currency union?

At the moment they're too busy insisting that Plan A will ultimately go ahead. A speech in Aberdeen this week is apparently going to completely "deconstruct George Osborne's argument". That said, there have been tentative references to a Plan B (currency pegged 1:1 to the pound) as suggested by some independent committee or other. However, none of the press are picking up on it and are continuing to bash them on the Plan A.

As far joining the Euro, simple answer to that one. We can't, full stop, end of debate, Ignore the newspaper headlines about are going to or don't want to. We wouldn't fullfil the 5 criteria required to join the Euro, so we can't.

Maybe Scotland could use the Mars Bar as currency?

Someone has already suggested empty Irn Bru bottles.



As far as the EU goes. I'm not sure that anyone really knows what will happen there. A member country breaking up is completely unprecedented and nothing in the EU rules currently deals with it, so any claims of what will happen is assertion and speculation.

Personal opinion is that something will be cobbled together to allow a fast track application and acceptance.

[astral276]

That said, there have been tentative references to a Plan B (currency pegged 1:1 to the pound)

I'm no money expert (as my bank balance proves) but that seems one of the worst options. You end up with no control of your own currency's rate of exchange, are subject to the fluctuations of a foreign currency, and have no lender of last resort.

A pity they can't bring the referendum forward. I'm already bored with the rhetoric (from all camps), gawd knows what it will be like by September.

[kreativebargains]

For joining the Euro Scotland do not meet the criteria, but then again when the Euro launched most of Southern Europe met the criteria but they were still allowed in.

[PetBazaar]

I'm no money expert (as my bank balance proves) but that seems one of the worst options. You end up with no control of your own currency's rate of exchange, are subject to the fluctuations of a foreign currency, and have no lender of last resort.

My bank balance suggests that I went to the same finance classes as you.

Apart from the lender of last resort bit, thats pretty much what a currency union gaurantees too.

I've more or less given up on the UK press to find out what's going on, but from what I've been reading, here's the gist of a few "worldwide" headlines:

• Why Scotland should peg an 'independent' currency to the British pound sterling - Deutsche Bank
• How Scotland Can Keep the Pound - Wall Street Journal
• An independent Scotland would be better off using the pound without permission - The Adam Smith Institute
• The Future of Scotland and the Pound - The Institute of Economic Affairs
  

All of these well respected, but presumably neutral, organisations are suggesting that a 1:1 pegging is a sensible option. I was going to privovide the links, but thought I'd probably be shot if I did. The trick is to have an economy aligned to that of the outside currency, and given that the Scottish economy is more closely aligned the UK's than many of the English regions are, that shouldn't be a problem.

[tkauctionworldwide]

I was thinking about Ecuador as an example of an independant country using an other countries money.

In the case of Ecuador they use the USA Dollar.

If Scotland do sign up to become part of the EU there would have to agree to using the the Euro as all new member states now have to do.
Why would the EU treat Scotland any differently to other new member states if they break away from the UK?

Its alright for some Scottish politicians who want to break away from the UK to bang on about how they have been in the EU for 40 years as a part of Britain and already work within the confines of EU laws, Britain as never signed up to the euro currency but changes have been made where new member states are concerned when joining up..