Cable Forum - Will Scotland Leave the UK?

Macpherson says Mark Carney also said that there would have to be fiscal transfers within a currency union.
If one part of a currency union goes into recession, it needs help from another party.
That happens in the UK already, he says.
But, under independence, those transfer payments would not happen unless you created a central fund. No one is proposing that. And, if they did, the rest of the UK might not agree to it, he says.

So that's £10bn extra a year the Scots would have to find for themselves, and that is on top of the £20+bn capital they would have to find for lenders to trust them. Where are they planning on finding the money?

Kursk

21-03-2017 00:25

Re: Will Scotland Leave the UK?

Quote:

Originally Posted by Chris (Post 35890848)

There is nothing to stop a third party country from using a currency that is not its own, either by directly circulating foreign banknotes, or else holding a supply of foreign notes equivalent to the value of domestic promissory notes it circulates within its own territory. For small, stagnant economies this can work fine. They lose some flexibility and dynamism but they save a lot of time and money because they don't have to worry about managing a currency for themselves.

I bow to your greater knowledge of economics Chris: would it be possible/practical/viable for Scotland to blindside us all by adopting the American dollar as its currency post independence?

We know President Trump has close associations with Scotland, could Scotland become, to all intents and purposes, the 52nd state providing a bridge between the US and European markets when Scotland resumes its EU membership?

The ramifications are scary.

RizzyKing

21-03-2017 01:09

Re: Will Scotland Leave the UK?

No scotland will never adopt the dollar and the close ties mean the US wouldn't favour scotland over the remaining UK, if scotland voted for independence they are on their own for a good few years while their EU application is processed. Unless unlike last time the snp have a credible economic plan they may not meet the criteria to join the EU so leaving the UK could see scotland struggling on it's own not something the scottish people deserve.

Kursk

21-03-2017 01:17

Re: Will Scotland Leave the UK?

Quote:

Originally Posted by RizzyKing (Post 35891001)

But if you become separated from your family, wouldn't a rich uncle be a desirable alternative? Why not adopt the dollar and freeze out the rest of the UK?

Scotland would surely be welcomed to the EU if it had the backing of a very affluent 'relative'.

nomadking

21-03-2017 01:27

Re: Will Scotland Leave the UK?

For Scotland to join the EU it would have to have its own independent currency and everything that goes along with it. Using Sterling or the US dollar or even the Euro isn't enough. They have to show they can run their own financial affairs. They would also somehow reduce their deficit from the over 9% it is now. That is worse than any EU country, including Greece.

Chris

21-03-2017 08:42

Re: Will Scotland Leave the UK?

Quote:

Originally Posted by Kursk (Post 35891002)

Nope.

Joining the EU means accepting the Euro. Acceptingbthe Euro means first having your own currency. Scotland won't be allowed to join the EU without first setting up its own currency.

1andrew1

21-03-2017 09:17

Re: Will Scotland Leave the UK?

Quote:

Originally Posted by Chris (Post 35891017)

Nope.

Joining the EU means accepting the Euro. Acceptingbthe Euro means first having your own currency. Scotland won't be allowed to join the EU without first setting up its own currency.

Montenegro wants to join the EU and currently has the Euro. So, if it joined the Euro, would it have to ditch the Euro, set up its own currency and then rejoin the Euro?
I just think Scotland should just unofficially keep the £ or have the Euro if it becomes independent, as it's a small country.

Chris

21-03-2017 10:54

Re: Will Scotland Leave the UK?

Quote:

Originally Posted by 1andrew1 (Post 35891022)

The cases are scarcely comparable. Montenegro hasn't had its own currency for decades. It uses the Euro because previously it used Deutsche Marks. The ECB is and always has been deeply unhappy about Montenegro's use of the Euro. In their case they probably will be allowed to just keep using it, when/if they eventually join, but given the ECB's public disapproval, how likely is it that Scotland, if needing to adopt a currency, would be able to adopt the Euro without causing some serious diplomatic ructions?

And let's say nothing of how unpopular the idea of adopting the Euro is, even in Scotland.

nomadking

21-03-2017 12:02

Re: Will Scotland Leave the UK?

Montenegro is going to have at least 10 years between application and acceptance. The currency issue is still not resolved. Whatever way you look at it Scotland would have to resolve the >9% deficit and their spending. That means austerity on a bigger scale than Greece. At least Greece could start by doing the sort of things they should have been doing all along such as unpaid taxes. Scotland doesn't have that option, so severe spending cuts would be needed. Rest of UKs(ie England) deficit would be improved.

Kursk

21-03-2017 13:30

Re: Will Scotland Leave the UK?

Leaving the Euro aside, could Scotland adopt the dollar and would there be any advantage in doing so?

pip08456

21-03-2017 13:39

Re: Will Scotland Leave the UK?

Quote:

Originally Posted by Kursk (Post 35891066)

Leaving the Euro aside, could Scotland adopt the dollar and would there be any advantage in doing so?

No, for the reasons stated above.

heero_yuy

21-03-2017 14:11

Re: Will Scotland Leave the UK?

Scotland will need to adopt the Brass Razoo. Only thing left. :D

pip08456

21-03-2017 14:17

Re: Will Scotland Leave the UK?

Quote:

Originally Posted by heero_yuy (Post 35891077)

Scotland will need to adopt the Brass Razoo. Only thing left. :D

Sonds reasonable and should suit Sturgeon to a "T".

Gavin78

30-03-2017 19:42

Re: Will Scotland Leave the UK?

Nicola Sturgeon writes to PM requesting a second Scottish independence referendum

Scotland's First Minister Nicola Sturgeon will tell Theresa May in a letter that they need to make a start on arrangements for an independence referendum.

the full text of the letter to be made public on Friday.

http://news.sky.com/story/nicola-stu...endum-10818701

papa smurf

30-03-2017 19:51

Re: Will Scotland Leave the UK?

Quote:

Originally Posted by Gavin78 (Post 35892556)

hope the reply goes public ;)

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