Scottish Independence: George Osborne To 'rule Out Currency Union'

[Guest UK Debt Slave]

Oh! A whole other conspiracy theory. I don't personally think this is an EU plot. In fact the EU are probably hoping it doesn't happen because if it does the flood gates open: Catalonia, Basque region, various French and Italian islands - lots of small EU regions want independence and a lot of them did not become part of their parent country voluntarily like the Scots did. Catalonia especially would be a rich country if it left Spain (it has more people than Scotland although less land and is much bigger than some countries in the EU.) Madrid needs the Catalan tax base: the wealth flow is from Barcelona to Madrid, unlike London v Edinburgh.

A few things to note about an independent Scotland....

1. There's a two year waiting period to join the EU.

2. When you join the EU joining the Euro is mandatory.

3. When you join the EU joining Schengen is mandatory (which means leaving the British Isles Common Travel Area of UK, Rep of Ireland, Isle of Mann, States of Jersey and Guernsey, etc) So undocumented travel between Scotland and England will be illegal.

(The UK has opt-outs on the Euro and Schengen. These are not available to new applicants.)

That said, I believe the nationality issues will be the biggest bugbears in Scottish independence. How do we assign citizenship (eg: to a British person born abroad who has never even been to the UK.)

Here's an article in the Telegraph published today on the same subject

An Independent Scotland Would Have to Join the Euro

http://blogs.telegraph.co.uk/finance/andrewlilico/100026646/an-independent-scotland-would-have-to-join-the-euro-heres-why-and-what-it-means/

Edited February 13, 2014 by UK Debt Slave

[The Ayatollah Buggeri]

Osbo's approach seems to me a tad counter-productive. It may wind up voters north of the border who could interpret this as bullying. Another example of how the Tories seem to actually want a YES vote.

It would be in their interest. A yes vote would remove around 60 Labour MPs from Westminster, at a stroke and permanently.

Actually, I suspect that this is simply a case of reflecting the view of the majority of the UK's electorate, as he was elected to do. That majority lives and works in England, and they would not accept a "representation without taxation" use of the GBP by an independent Scotland. It's as simple as that.

Why an independent Scotland would have to join the Euro - Torygraph / Andrew Lilico. His main argument rests on the EU's insistence that all new member states join the single currency (and thus would not accept Scotland's application if it proposed not to), and that an independent Scottish currency would cause a politically unacceptable drag on growth in the short to medium term.

[AThirdWay]

How the Scottish economy fares as the oil runs down is a different matter.

Personally, I think the idea of a currency union is wrong for Scotland - patently so, you'd be handing over more powers to Westminster than at present, in fact if not in law. The only reasons I see it proposed are so as not to scare the voters, and to make sure that any and all problems can be blamed on Westminster. Neither is particularly honorable. Ireland, which is about as close an example as you can get to an independent Scotland, managed with it's own currency for a long time.

What annoys me at present is the habit the SNP has of announcing things - such as the currency union - without bothering to ask first. A currency union affects everyone in the proposed GBP-zone, and as such the SNP has no right to tell us what is going to happen, and then claim bullying if we dare argue. Indeed, the whole independence 'debate' is cast entirely as 'Scotland doing whatever it feels like', with a strong streak of the victim-bully act.

We seem to be in agreement

Regarding the oil running out, how do you think we'll fare within the union when the oil runs out?

With independence, at least we'd have 20-30 years of NS tax income to encourage business to Scotland. Stay in the Union, it gets pi$$ed up the wall on projects like HS2. As if there isn't enough money spent on transport infrastructure down South!

All hail London!

Edited February 13, 2014 by AThirdWay

[dances with sheeple]

We seem to be in agreement

Regarding the oil running out, how do you think we'll fare within the union when the oil runs out?

With independence, at least we'd have 20-30 years of NS tax income to encourage business to Scotland. Stay in the Union, it gets pi$ed up the wall on projects like HS2. As if there isn't enough money spent on transport infrastructure down South!

All hail London!

As opposed to parliaments, trams that don`t run and multiple Forth bridges?

[Guillotine]

It was over a hundred years back but what happened when the Irish republic was created?

They lost the pound, there must have been asset and reallocations and implications for international treaties? I'm not aware of any economic baggage from that breakup...

[Caius]

The English are cowards. 80% of the UK population and they're too scared to go it alone!

[1929crash]

It would be in their interest.

I disagree. Cameron and the Tories would be remembered as the creators of Little Britain, the ones who lost Scotland. Unlike in 1922, when Eire was created, there is no British Empire to fall back on.

[hirop]

If westminster is against Scottish independence, it's undoubtedly a good idea. If all westminster politicians say Scottish independence is a bad financial decision, it's undoubtedly completely viable.

The pound debate has been and always was the SNP trolling westminster. I don't know one NAT who thinks the pound policy was a good idea, it was floated for the undecided, and now he can point at the bogeyman. classic trolling. well done again.

Edited February 13, 2014 by hirop

[EUBanana]

I disagree. Cameron and the Tories would be remembered as the creators of Little Britain, the ones who lost Scotland. Unlike in 1922, when Eire was created, there is no British Empire to fall back on.

There isn't a Swiss Empire either but they seem to do OK. The British Empire was a net cost anyway, hence Benjamin Disraeli, "Empire for empire's sake".

Jeez, why do people suddenly revert to 19th century thinking in these debates about Scotland.

Edited February 13, 2014 by EUBanana

[1929crash]

There isn't a Swiss Empire either but they seem to do OK. The British Empire was a net cost anyway, hence Benjamin Disraeli, "Empire for empire's sake".

Jeez, why do people suddenly revert to 19th century thinking in these debates about Scotland.

I was making the point that there is a psychological dimension to this. The British are not the Swiss, and the Tories would be the ultimate losers if Scotland went on their watch.

As for the Empire, Disraeli was wrong. It was good for business.

[MartinE]

What happens to Scottish mortgage debt post split??

Hungarian CHF mortgage scenario (ie: homeowner paid in Scot pounds but debt in GBP) or will the govt of the day impose some kind of transfer??

Debt slavery has to be a factor. Who would vote for that risk on their jumbo mortgage.

[Traktion]

So, would you consider it from my perspective. I see a group of people from the same country as me declare that they want of be in a different country, think they can leave the debts of the original country behind, but want to keep the same currency 'cause they want to, and everything will be all fine and dandy, and I'm not even allowed a say in the matter.

Indeed, if I dare to even complain about such presumptive behavior my words will be carefully studied for any grounds to should 'racist'.

That is the problem with statism. It foists debt on those who never agreed to it, attempting to make them feel responsible for it.

It is all cobblers.

[EUBanana]

As for the Empire, Disraeli was wrong. It was good for business.

Might have been good for the nabobs, but for Joe Q Public I think it didn't matter a damn.

[1929crash]

Might have been good for the nabobs, but for Joe Q Public I think it didn't matter a damn.

Since when has Joe Q Public mattered to the elite?

In any event, the Empire created loads of jobs and opportunities - in the colonial administration, the military, missionary work and commerce. I get the impression that the Scots benefited disproportionately from all this.

[Ah-so]

What happens to Scottish mortgage debt post split??

Hungarian CHF mortgage scenario (ie: homeowner paid in Scot pounds but debt in GBP) or will the govt of the day impose some kind of transfer??

Debt slavery has to be a factor. Who would vote for that risk on their jumbo mortgage.

This was the exact problem that was under consideration during the euro crisis.

Probably there would be agreement to peg the two currencies for a few years at an fx rate if 1:1. Over time the peg would be removed.

[EUBanana]

Since when has Joe Q Public mattered to the elite?

Well, yeah. But by inference it won't matter to Joe Q Public whether Scotland is independent or not. Life will go on, life will be exactly the same as it was before. Perhaps less so for the elites, but for most folks it won't make any odds.

In any event, the Empire created loads of jobs and opportunities - in the colonial administration, the military, missionary work and commerce. I get the impression that the Scots benefited disproportionately from all this.

Some. Eric Blair got to be a cop in India. Not that many though, the colonial administrations were famously tiny.

The Empire was good if you wanted to emigrate. Nowadays the Commonwealth + USA still fulfills that function to an extent. But to the great bulk of the British population who stayed in Britain, I think the empire was neither here nor there. I'm sure it was a totally different story to the elites, of course.

Either way, we're digressing, but there are plenty of nations smaller than England, and some larger, who are doing very well for themselves. Ditto Scotland. Scottish independence will make almost no material difference to the lives of anybody in the British Isles, north or south of the border. It would probably help the Scots out a bit in that they would have a government that presumably more closely aligns with its people. Certainly there would be no catastrophe or anything like that though for either party, not based on independence alone anyway.

[okaycuckoo]

Possible Salmond masterstroke.

"Tories tell Scots they cant use sterling"

Scots: English can't use sterling.

English: But it's still sterling. LIke the shiny stuff.

Scots: Nay, laddie.

Square Mile: Not over our dead bonuses.

Scots: Nay, lassie.

To Scotland: SOGOTP.

[MarkG]

Probably there would be agreement to peg the two currencies for a few years at an fx rate if 1:1. Over time the peg would be removed.

1. Why?

2. How?

Either the Bank of England, or the Bank of Scotland, or both would have to agree to exchange Scottish pounds for English pounds on demand. For the Bank of Scotland to do so believably, they'd need shedloads of English pounds in their vaults. For the Bank of England to do so would be insane, when the Scots can print as many as they want.

The whole idea that the Scots could be 'independent', yet continue to use the English pound, was insane from the start.

[kev-all-in]

Surely it ultimately comes down to who's finger is on the print button when it all goes tits up, and in who's interest they will act - obviously mainly their own in our elites case, but also sometimes their voters.

The scots can use the pound, or they can peg their currency to it if they want - that's fine in the good times. But what happens when TSHTF (ie another RBS, the next recession, high inflation or unemployment, an unpredictable global crisis etc etc), the scots wouldn't be able to force Osbourne to continue with or restart QE, or change interest rates etc for example if it doesn't suit England. Why would they want to give up some influence over this yet be tied to the same currency? makes no sense.

The Scots will bleat that Osbourne does whatever he wants anyway and thats probably true, but at least they have representatives in Parliament putting their case forward (rather too much in the case of McBroooon) which they wouldn't have if they were independant. In fact the Scottish seem very well represented in Westminister.

At the moment Osbourne / Carney et al are (supposedly) tasked with ensuring the finacial security and prosperity of the UK in it's entirety, once Scotland is taken out of the brief where's the incentive to encourage growth and development there? especially if it's at our expense.

I don't actually think it will ever happen, it's just a pointless circus to justify politians and give the illusion of democracy. Even if they did get a yes vote (very unlikely IMPO) it would all get tied up in legal crap for years, watered down until it's unrecognisable and then in the end made pointless by wider integration into the EUSSR anyway.

[buyerbeware]

Scottish indépendance is not going to happen and as a Scot I wish these SNP idiots would go away.

[billybong]

http://

www.newstatesman.com/politics/2014/02/george-osbornes-speech-scotland-and-pound-full-text

...

But the pound isn’t an asset to be divided up between the two countries after break-up as if it were a CD collection.

...

We got Britain out of the eurozone bailouts. Now we’d be getting into an arrangement that was just the same.

..

The CD collection example seems a bit infantile and didn't "Britain" help bail out some Irish banks (without Parliamentary approval) - at the very least.

They're clearly getting desperate that they're going to be losing some of their trousering.

Edited February 14, 2014 by billybong

[giesahoose]

http://www.heraldscotland.com/politics/referendum-news/yes-does-not-mean-yes.23438016

that would be an interesting development. ERRR wrong answer, try again

[Dorkins]

Here's an article in the Telegraph published today on the same subject

An Independent Scotland Would Have to Join the Euro

http://blogs.telegraph.co.uk/finance/andrewlilico/100026646/an-independent-scotland-would-have-to-join-the-euro-heres-why-and-what-it-means/

It's very easy to get around the "new EU members must join the euro" rule. To join the euro a country must be part of ERM II for at least two years, but there is no obligation to join ERM II. Most of the countries which joined the EU after the creation of the euro never joined ERM II, especially the bigger ones like Poland, Czech Republic, Hungary etc. Scotland could easily do the same.

[billybong]

From the Herald link.

A REFERENDUM Yes vote would not guarantee Scottish independence and the 'status quo' will be maintained if talks do not go smoothly, a senior ­Coalition source has warned.

It sounds as if Scotland will have to make some form of Unilateral Declaration of Independence - a bit like Rhodesia had to.

http://

en.wikipedia.org/wiki/Rhodesia%27s_Unilateral_Declaration_of_Independence

[richc]

Surely it ultimately comes down to who's finger is on the print button when it all goes tits up, and in who's interest they will act - obviously mainly their own in our elites case, but also sometimes their voters.

The scots can use the pound, or they can peg their currency to it if they want - that's fine in the good times. But what happens when TSHTF (ie another RBS, the next recession, high inflation or unemployment, an unpredictable global crisis etc etc), the scots wouldn't be able to force Osbourne to continue with or restart QE, or change interest rates etc for example if it doesn't suit England. Why would they want to give up some influence over this yet be tied to the same currency? makes no sense.

The Scots will bleat that Osbourne does whatever he wants anyway and thats probably true, but at least they have representatives in Parliament putting their case forward (rather too much in the case of McBroooon) which they wouldn't have if they were independant. In fact the Scottish seem very well represented in Westminister.

At the moment Osbourne / Carney et al are (supposedly) tasked with ensuring the finacial security and prosperity of the UK in it's entirety, once Scotland is taken out of the brief where's the incentive to encourage growth and development there? especially if it's at our expense.

I don't actually think it will ever happen, it's just a pointless circus to justify politians and give the illusion of democracy. Even if they did get a yes vote (very unlikely IMPO) it would all get tied up in legal crap for years, watered down until it's unrecognisable and then in the end made pointless by wider integration into the EUSSR anyway.

The Scots could unilaterally use the pound, but that would essentially put an end to any financial services industry in the country, immediately reducing GDP by about 10% or something (I don't know the exact contribution from financial services in Scotland, but it's not insignificant). No international bank can base itself in a country lacking a lender of last resort, which is what Scotland would be without access to the Bank of England. Even if the banks wanted to ignore the risk of doing so, the resulting market rate of money they needed to borrow would put them out of business.

The Scots can join the euro, or they can give up their banking industry. The inevitable delay in joining the euro will probably force the banks to move out of country, in any case.

The SNP are being completely disingenuous in this debate. While sticking up two fingers to the English, they're simultaneously in a huff because the rest of the UK is unwilling to hand over their credit card to backstop the Scottish banking system. The UK would be far better off without these clowns or the people who elect them.