Common sense from Carney on currency. Currency Reflections: The Legal Issues | Future of the UK and Scotland: The Referendum Debate. Getting to Maybe: Currency, Debt, and the Pre-negotiation of Independence The UK government up until now has clearly stated that it is not going to ‘pre-negotiate’ the break up of the Union. Yet to-day apparently the UK Chancellor George Osborne, along with support from the Labour party, is to rule out in advance a currency union. In response the Scottish government has raised that they have a card to play: a possible refusal to take on a share of the UK’s national debt. So what is going on? There are several reasons why the new turn towards pre-negotiation is unfortunate and should be publicly resisted. First, a crucial debate and negotiation over the economic future of both Scotland and rUK is not best had in sound bites and public declamatory speeches prior to any vote having taken place.
Second, the Electoral Commission has said that people need to be informed as to the future consequences of their vote, and this style of campaigning in fact serves to dis-inform. Getting to ‘Maybe’? The flaw in Osborne’s pre-emptive strike against a currency union. Recently, misleading presumptions about what international law requires and seeming indifference to the necessity of negotiations following a possible pro-independence vote in Scotland on 18 September have framed the referendum debate.
Politicians can always craft arguments around faulty presumptions and then make a dire outcome sound eminently plausible. But the fate of Scotland cannot be so easily disposed of by George Osborne. The Chancellor’s 13 February speech in Edinburgh, in which he rejected any currency union between Scotland and the remainder of the United Kingdom (rUK) in the event that Scotland’s voters approve independence, was partly based on the presumption that the rUK would be the “continuator” state of the existing United Kingdom.
By laying down the gauntlet of rejecting any currency union with Scotland even before any referendum vote has taken place, and promising to “punish” the Scottish people if they vote for independence, Osborne overlooked an inconvenient truth. As Scotland Mulls Independence, A Stupid London Plays It Dirty. For students of British politics, the big issue this year is the future of Scotland. The Scottish people have enjoyed limited self-rule since 1999, when a separate Scottish parliament was set up. Now in a referendum planned for this September, they will vote on whether to establish an independent nation. Instead of letting Scottish voters make a reasoned and unpressured decision, the London establishment has increasingly been playing it dirty.
As the Irish economics commentator David McWilliams has pointed out, London’s “bully-boy” tactics have been so clumsy that they may backfire. The latest development is that, in a statement almost certainly inspired by London, European Commission President Jose Barroso has opined that it would be “extremely difficult, if not impossible” for an independent Scotland to join the European Union (EU). Is this the same EU that so lately rolled out the red carpet to countless new members in the remotest parts of Eastern Europe?
But why? Why there will be a currency union. A reader this morning pointed us to an article by the arch-Unionist blogger and pundit Professor Adam Tomkins, who we must once again emphasise in the interests of clarity is almost definitely NOT the gentleman in this picture: It was a piece from a few weeks ago about the currency debate, which the reader felt made a reasonable and “quite convincing” case, so we went and had a look. It’s easy to see why the unwary could reach such a conclusion. The professor uses all of his academic skill to make his points eloquently, and makes hay out of highlighting some of the sillier pronouncements that have come from some Yes supporters, such as the notion that the Edinburgh Agreement compels the UK government to basically do whatever the Scottish Government wants in the event of a Yes vote.
The image above comes from this BBC page. It depicts the UK’s GDP growth figures before, during and after the economic crisis of 2007-2009. The country’s credit rating was downgraded. What you won’t read today. The Scottish and UK press has been packed solid for the last 48 hours with strangely uniform assessments of how George Osborne has conclusively smashed the Scottish Government’s position on an independent Scotland’s currency. We’ve offered our own analysis, and various politicians and professional activists on the No side have been pouring ugly, borderline-xenophobic scorn and sneering on other nations which use some of the alternative options to a formal Sterling union, which is usually a sure sign that they’re scared of something. So it seemed worthwhile to collect together the views of some proper financial experts in one place for handy reference, because the cosy consensus in the UK media doesn’t seem to be reflected by people who actually know what they’re talking about.
Deutsche Bank thinks a Scottish pound pegged to Sterling is sensible. The Wall Street Journal concurs, calling it “viable and easy to implement”. And many city financiers agree with them on that. The Scottish Pound and the Illusion of English Money. Scotland and the rest of UK are currently joined by not just one union, but dozens of unions, these include: political, economic, trade, social, defence, in my case a family union, and the topic of the week, the currency union.
Some of these unions work and some don’t, some work for one country, and not the others, and some still work for all countries. Political Posturing - When you take political posturing and scaremongering out of the equation you are left only with the evidence, and that evidence points to an inescapable conclusion, that the currency union is one that works in the best interests of both Scotland and the rest of the UK in equal measure. The political union, however, works against Scotland’s interests and needs to be changed. The Jersey pound! One of the points they made this week is that “Scotland’s notes represent a ‘rare example’ of different cash being permitted across a single-currency area”. The illusion of English Money No real threat to Scottish bank notes. NEW REPORT: A Scottish Currency? - 5 Lessons from the Design Flaws of Pound Sterling. Written by Positive Money on . In September 2014, Scotland will hold a referendum to decide whether to separate from the UK.
A major question concerns which currency an independent Scotland would use: the pound, the euro, or a new Scottish currency? If an independent Scotland wished to establish its own currency, there is little sense in modelling the currency on a design that has already failed many times in the UK, Europe and the US. The banking and monetary systems in all these countries have spectacularly failed, throwing millions into unemployment and wiping years of growth off GDP. There is a better way. These changes would give Scotland a safer banking system and an economy that is more stable and far less dependent on debt. Our new publication “A Scottish Currency? Read online Download (PDF, 10 pages) Disclaimer: Positive Money has no view on Scottish independence, as we have no expertise on this issue. Independent Scotland 'may keep pound' to ensure stability | Politics.
A currency union will eventually be agreed between an independent Scotland and the remainder of the UK to ensure fiscal and economic stability on both sides of the border, according to a government minister at the heart of the pro-union campaign. The private admission comes amid increasing jitters at Westminster, after opinion polls showed an increase in support for independence despite the Conservatives, Labour and Liberal Democrats all arguing that Scotland could not keep the pound after a yes vote. "Of course there would be a currency union," the minister told the Guardian in remarks that will serve as a major boost to the Scottish first minister, Alex Salmond, who accused the UK's three main political parties of "bluff, bluster and bullying" after they all rejected a currency union.
A Times/YouGov poll found that Scots believe the Westminster parties are lying about the main element of Project Fear – their joint rejection of a currency union.