Why would an independent Scotland expect a currency union with the UK?

(192 Posts)
JapaneseMargaret Fri 14-Feb-14 07:46:44

I mean, I can see why they would, but doesn't that just totally undermine their desire for independence?

Am I missing something blindingly obvious...?

Euphemia Fri 14-Feb-14 08:32:17

We would be on too shaky ground economically to set up our own currency, at least initially. Perhaps in time.

A Scottish Government working group stated: "From the perspective of the UK - if there is a vote for independence - the Working Group believe that this framework would be to their benefit. It would, for example, provide a consistent and transparent framework to manage the transition process. The UK would also retain an integrated market with a key trading partner. As approximately 10% of the existing UK economy (roughly the size of the entire financial services industry in the UK), Scotland would remain one of the largest trading partners of the UK economy. There would be particular advantages for the UK in areas such as energy and financial services.

“Moreover, the model proposed for monetary policy, financial stability and fiscal policy offers fully engineered frameworks in key areas of interest to the UK. For example, the proposals for financial stability would ensure that major financial institutions based in Scotland and operating in the rest of the UK would be subject to similar levels of oversight and scrutiny (and vice versa).

"Additionally, Scotland’s continued use of the pound would make a massive positive contribution to the Sterling Zone’s balance of payments. For example, Oil and Gas UK estimate that North Sea oil and gas exports, the vast majority of which originate from Scottish waters, boosted the UK’s balance of payments by £40 billion 2011-12."

JapaneseMargaret Fri 14-Feb-14 08:52:37

Britain didn't enter into the Euro because it - arguably quite rightly, in hindsight - didn't want to be responsible for financially bailing out other countries' political mistakes.

Why would it all of a sudden want to enter into such an alliance with Scotland? How would a political-non-union-but-monetary-union benefit the UK? What's in it for them?

I mean, I can see that oil and gas exports have contributed to the coffers, but it doesn't quite cut the mustard...

I'm Antipodean, for the record. No axe to grind.

MoreBeta Fri 14-Feb-14 09:07:19

Many countries in the world have their own currency but are in fact 'dollarised' in that locals do not hold their local currency as saving as they do not trust it but only use it for immediate transactions. They hold US Dollars as a safer store of wealth.

I visited Argentina in the 1990s when 1 Argentine Peso was by law equal to 1 US Dollar. The law decreed that currency equivalence to give people confidence in the local Argentine Peso currency but in practice as tourists we only took US Dollars with is and all the shops and especially taxi drivers accepted the US Dollar eagerly but always gave you change in Argentine Peso which we also spent as quickly as we could. In fact everyone was trying to get rid of Peso as quickly as possible as no one really trusted the local currency at all. Everyone was so desperate to sell, spend or convert Argentine Peso so quickly that its value fell relative to the US Dollar in the black market and even when we were there it was only really worth 95 US cents. A few years later the peg to the US Dollar was broken and the Peso devalued rapidly as currency equivalence was unsustainable.

This is likely to happen to Scotland. It may issue its own currency, it may call it the Scottish Pound. It may be decreed that by law it is worth £1 Sterling but in reality the Scottish economy will rapidly become Sterling or Euro currency based and only small local transactions will be carried out in the local Scottish currency.

In truth the Bank of England and Treasury cannot do anything to stop Scottish people using Sterling as their preferred currency. People can use whatever currency they like - see the rise of Bitcoin. Very wealthy people often use gold and Swiss Francs as their preferred store of wealth but use the US Dollar for every day transactions because of its universal acceptance and liquidity around the world.

In my opinion Scotland should adopt the Euro if it wants to be part of currency union - but that is a whole other political question.

CogitoErgoSometimes Fri 14-Feb-14 10:40:17

The independence campaign is throwing up quite a lot of contradictory assumptions. Not least that, if they go their separate way, Westminster would still treat Scotland as an honorary de facto member of the UK rather than a complete other regime like Belgium.

Euphemia Fri 14-Feb-14 12:43:09

Nicola Sturgeon speaks very clearly about this: here she is last November.

niceguy2 Fri 14-Feb-14 12:55:28

We would be on too shaky ground economically to set up our own currency, at least initially. Perhaps in time.

Doesn't that pretty much tell you everything though?

Pro-independence are busy saying "Look everything will be rosy. We're gonna be fabulous. We've got all this oil. It's jam today and jam tomorrow."

But at the same time they want to desperately keep the pound because the economy isn't able to support their own currency.......Let's face it, no-one honestly believes the Scottish economy on it's own could bail out it's banks like the UK did.

In truth the Bank of England and Treasury cannot do anything to stop Scottish people using Sterling as their preferred currency.

Absolutely. But what happens is that the BoE and the government will make decisions based on the best interests on rUK and not Scotland. So then you have this bizarre situation where you have your independence but all the financial decisions are made in England where you now have ZERO influence whereas right now Scotland has MP's in Westminster.

ItsAllGoingToBeFine Fri 14-Feb-14 13:01:05

But in today's international world currency never operates on a vacuum. It is very naive to suggest that eg as Britain is not in the Euro it is not affected by the Euro.

Reasons currency union would be good for rUK:

Scotland would take on a share of the debt
All of England's exports to Scotland would continue unimpeded (ie without additional cost)
All of England's imports from Scotland would do the same ( imports eg electricity, oil etc)
The currency would continue to have oil backing it

Im sure there is more.

Doesn't really matter though, currency union isn't a deal breaker for anyone.

niceguy2 Fri 14-Feb-14 13:23:05

I really don't believe the doom & gloom over trade with Scotland if they had their own currency. There'd be some exchange issues but no different to how we trade with the rest of the world including Eurozone countries.

So I think I read somewhere that 10% of rUK trade is with Scotland. How much of that would continue? Personally I think pretty much all of it. It'll just cost slightly more to trade. No different than if the company was selling to France/Germany/US etc

And the key thing here is the Scotland refuse to commit long term to Sterling. In which case the idea that oil is backing it is a bit meaningless. That could disappear at any time that suits Scotland....but not England.

anothernumberone Fri 14-Feb-14 13:24:55

Lots of countries have currency agreements. It does not always undermine sovereignty although some South American countries linked to the US dollar might disagree.

flatpackhamster Fri 14-Feb-14 13:30:06

ItsAllGoingToBeFine

But in today's international world currency never operates on a vacuum. It is very naive to suggest that eg as Britain is not in the Euro it is not affected by the Euro.

I don't think that has been suggested.

Reasons currency union would be good for rUK:

Scotland would take on a share of the debt

Scotland should take it on anyway.

All of England's exports to Scotland would continue unimpeded (ie without additional cost)

All of England's imports from Scotland would do the same ( imports eg electricity, oil etc)

If Scotland wants to price itself out of its export markets, then I don't see why anyone would object.

The currency would continue to have oil backing it

Mmm, that helps.

Doesn't really matter though, currency union isn't a deal breaker for anyone.

It ought to be. Currency union destroyed Spain, Portugal, Greece and Italy because they were in the wrong one. It speaks volumes to me at the lack of critical thinking on this issue that you wave it away as an irrelevance.

Ubik1 Fri 14-Feb-14 13:36:01

I don't really understand why Westminster wouldn't allow Scotland to keep the pound.

I suppose if Westminster is determined to not have currency union, Scotland could tell them to shove the national debt and walk away.

ItsAllGoingToBeFine Fri 14-Feb-14 13:38:13

*Scotland would take on a share of the debt

Scotland should take it on anyway*

Why would Scotland take on the liabilities with no assets?

Ubik1 Fri 14-Feb-14 13:41:22
ItsAllGoingToBeFine Fri 14-Feb-14 13:44:10

ubik yes I saw that. I was ignoring it in the hope it will be swiftly refuted. If the Scots vote for independence the one thing not up for negotiation is independence itself. To suggest otherwise is ridiculous and no doubt against all sort of international law (and the Edinburgh Agreement).

flatpackhamster Fri 14-Feb-14 13:44:20

ItsAllGoingToBeFine

Why would Scotland take on the liabilities with no assets?

BECAUSE IT'S SCOTLAND'S DEBT TOO.

Jesus wept.

ItsAllGoingToBeFine Fri 14-Feb-14 13:55:30

But it is Scotland's currency too...

Mojang Fri 14-Feb-14 14:02:13

Erm , are they not wanting to take on the land and the oil then? They are intending to take assets.

It's not Scotland's currency, it's the UK's currency, you know the one some of them they want to be independent from.

niceguy2 Fri 14-Feb-14 14:03:22

I don't really understand why Westminster wouldn't allow Scotland to keep the pound.

I don't understand why Scotland WANTS to keep the pound.

Why fight for independence then throw your toys out your pram because England doesn't want to let you use his money.

You are either independent....or you're not. It's like getting a divorce but still demanding to use the joint bank account. Ultimately are you truly independent?

ItsAllGoingToBeFine Fri 14-Feb-14 14:08:53

Fair division of stuff?

Natural resources: along country boundaries ( though maritime may need a wee bit of negotiation as it has moved a fair bit in recent years)

Built assets:buildings, bases etc , by country boundaries

Moveable assets/assets outside UK boundaries: currency, embassies etc split by population share eg Scotland gets about 10%

Liabilities : eg the debt again Scotland takes a population share?

What is not fair/realistic is for Westminster to take an asset/asset share off the table without also removing some corresponding liability.

Alibabaandthe40nappies Fri 14-Feb-14 14:11:56

I was ignoring it in the hope it will be swiftly refuted. If the Scots vote for independence the one thing not up for negotiation is independence itself.

Well of course it is up for negotiation. If the UK government in Westminister don't agree to the ridiculous demands of Salmond then the whole thing is dead in the water.

mistlethrush Fri 14-Feb-14 14:11:58

If its so essential to have monetary union with someone, why doesn't Scotland get the Euro. Then at least they can moan about France and Germany making all the decisions rather than London.

Alibabaandthe40nappies Fri 14-Feb-14 14:14:26

ItsAll I think Osbourne has suggested that it would be better for the UK to keep all the debt rather than currency share and asset share with an independent Scotland.

Alibabaandthe40nappies Fri 14-Feb-14 14:15:39

mistle Scotland cannot assume that they will be allowed to use the Euro. Spain have said they will veto automatic entry, so Scotland will have to apply as a new member, which could take decades before they meet the terms for currency union.

SirChenjin Fri 14-Feb-14 14:15:45

Because Alex Salmond is a complete and utter arse. He outarses the worst of the worst PMs this country has ever had, and wants the security of the currency of another country as he knows full well that he is not up to governing.

The sooner we get a 'no' vote in September the sooner (hopefully) he will fuck off to the far side of fuck, taking Wee Nikki with him. God I loathe the SNP - fucking loathe them.

<breathes furiously into paper bag>

Alibabaandthe40nappies Fri 14-Feb-14 14:18:02

The reason Salmond is so desperate to keep the pound, and the backing of the Bank of England is so that he can still blame 'The English' when things are not rosy in Scotland's garden.
If Scotland are totally autonomous, with their own currency, then he will be completely exposed as the self-serving, incompetent fool that he is.

mistlethrush Fri 14-Feb-14 14:22:40

So the criticism about the recent 'you can't share the pound' as being Westminster 'bullying' is just another attempt to sidestep any responsibility?

MoreBeta Fri 14-Feb-14 14:23:21

The currency argument and the debt/liability argument are two different things.

A country can issue debt in another currency but its own. Its quite common. The currency argument is red herring really. Its just a piece of paper or an accounting entry but symbolic of national sovereignty of course. Scotland could issue a currency backed by oil, timber rights and whisky instead of gold for example. That would be quite popular I suspect. A currency backed by real assets that people holding the currency have a legal claim on.

The issue of debt is a more interesting one. If Scotland wanted to leave the union and its new Govt in waiting de facto declared UDI, refused to accept any joint liability for UK debt and its people refuse to pay taxes to UK Treasury then we would have in effect a similar situation as when the US declared independence. The UK Parliament would not have any leverage except invasion of Scotland. Lets not go there shall we - it didn't end well last time.

The SNP could make 'No taxation without representation' a very popular rallying cry.

ItsAllGoingToBeFine Fri 14-Feb-14 14:23:55

Well of course it is up for negotiation. If the UK government in Westminister don't agree to the ridiculous demands of Salmond then the whole thing is dead in the water

Article 1

1. All peoples have the right of self-determination. By virtue of that right they freely determine their political status and freely pursue their economic, social and cultural development.

Ubik1 Fri 14-Feb-14 14:24:36

why does everyone fixate on Salmond?

he won't be running Scotland

CogitoErgoSometimes Fri 14-Feb-14 14:27:34

There are more sidesteps in this debate than Strictly Come Dancing. hmm 'Westminster bullying' is put up as the rationale for everything that goes wrong in Scotland past, present and presumably future.

scaevola Fri 14-Feb-14 14:27:45

I think that there should be a referendum in the UK before the entering a currency union with any other foreign country. Scotland can exercise self-determination to become independent, but cannot them assume that 5)3 UK or any other foreign country will enter into any particular arrangements with it.

The division of debts and assets is totally separate from forming a new union.

SirChenjin Fri 14-Feb-14 14:27:46

a)Because he's an arse
b)Because no-one else is pushing for independence (well, none of the credible parties)
c)No-one I know who votes Tory/Labour/LibDem is remotely interested in independence. If you're voting for independence you're voting for the SNP, by and large.
d)Because he's an arse.

As for not being able to have a currency union being 'bullying from Westminster' - utter nonsense. And they still haven't come up with a Plan B.

Ubik1 Fri 14-Feb-14 14:31:00

But I thought that after the referendum, if yes, then Scotland would call a general election - we could end up with a Labour government (if they get their act together)

Also there are alot of people pushing for independence who are not keen on Alex Salmond. It's not about one man or woman.

ItsAllGoingToBeFine Fri 14-Feb-14 14:35:19

Its going to take more than one mans vote to win this referendum.

People pick on Salmond because he is an easy target, and because that is easier than engaging in debate, and coming up with some positive reasons to vote no.

SNPs main thread is independence, always has been. It is fairly telling that they won a majority in a parliament specifically designed to avoid majority governments.

Alibabaandthe40nappies Fri 14-Feb-14 14:38:34

Ubik I would be surprised if there was a GE straight away. The incumbent Scottish Parliament would remain while all the negotiations happen probably - some sort of coalition between the SNP and Labour is a very likely option.

You can't vote for independence on the assumption of getting a particular government.

ItsAllGoingToBeFine Fri 14-Feb-14 14:39:46

First general election in 2016 I believe

niceguy2 Fri 14-Feb-14 14:41:06

If its so essential to have monetary union with someone, why doesn't Scotland get the Euro. Then at least they can moan about France and Germany making all the decisions rather than London.

Exactly!!!! Salmond wants independence so Westminster isn't calling the shots. With the pound England still would be pretty much. He who controls the money always does.

Since Scotland wants to join the EU and promising to adopt the Euro is a pre-requisite, why not just adopt the Euro right away until membership of the EU. After all you don't need permission from London to use the UK Pound so by the same token you don't need permission to use the Euro right?

Ubik1 Fri 14-Feb-14 14:43:55

I'm not voting on the assumption of anything

I'm an ordinary punter interested in voting for independence. Most of these debates seem to caught up in tribal nationalism and knee-jerk reactions. I was making the point that this won't be the Socialist Republic of Salmond - otgher parties will be involved. Haven't they even talked about breaking up the SNP after independence?

I think I am going to vote Yes - am still not completely sure.

SirChenjin Fri 14-Feb-14 15:11:41

There is absolutely nothing knee-jerk about my reaction or other voters on the 'no' side, just as there is nothing - economically, politically, socially or even emotionally - that warrants breaking up the Union. The SNP have put forward nothing more than a wish list for an independent Scotland tied up in the blue and white ribbon of nationalism - which is not sustainable in long term. The fact that they have been caught off guard with the rejection of a currency union with no Plan B for something so fundamentally important to our future would be laughable if it wasn't so serious.

mistlethrush Fri 14-Feb-14 15:16:30

I don't have a vote as I'm in England. I do hope that Scots vote to stay as part of the union. (But if not they can sod off and use the Euro.)

SirChenjin Fri 14-Feb-14 15:19:36

Quite right too Mistle. If it were the other way around, then I can't imagine I would support an independent Wales, N Ireland or England voting to go it 'alone' - but only for the bits that suit them.

mistlethrush Fri 14-Feb-14 15:26:36

(But, please vote to stay part of the UK Scotland!) (And that's nothing to do with the pound, economics or anything - we seem to do pretty well as a whole and it would be a pity to throw hundreds of years of union away unless there's a REALLY good reason, and I can't seen one)

OldLadyKnowsNothing Fri 14-Feb-14 15:31:24

Scotland can't join the Euro. One of the stipulations is that a country's own currency must have been part of the Exchange Rate Mechanism for at least two years before being considered for joining. We don't fulfill that requirement.

MoreBeta Fri 14-Feb-14 15:37:47

Scotland only has the Pound Sterling because it had to be rescued by England in the 1800s when its banks failed. in effect, England just rescued Scotland again when RBS and HBOS got into difficulty.

Anyone seeing a pattern here?

If the Bank of England had not been there and Scotland had been independent in 2007 then it would have received the same treatment by financial markets as Iceland and Cyprus.

Mojang Fri 14-Feb-14 15:55:56

That's an excellent point MoreBeta although I wonder if it's true. If so, why haven't we heard it before? Although RBS HO iscin Edinburgh, it hasn't really been Scottish owned for a long time, has it? Of the deposits that would have been lost had it gone down, what % were from Scottish investors?

McFox Fri 14-Feb-14 15:58:54

Yes, the pattern being that anything with the word Scotland in the title is assumed by you to be Scottish owned... never mind the facts eh?

These banks were wholly regulated from London. Their money lending policies were changed only at the say so of Westminster. Most of the UK staff were based outwith Scotland, so most of the tax was paid to Westminster, and not counted as Scottish or Scottish Government revenue. Same deal with the national insurance and corporation tax was paid. Most of the losses were generated in London.

What you are really suggesting is that because it suits your argument, the revenue from the successful years of these banks should have been a UK boon, but when the these banks were buggered in London, due to Alastair Darlings failed strategies, and London had to bail them out, they become Scottish messes that the poor English had to deal with?

Think again.

MoreBeta Fri 14-Feb-14 16:04:32

Its true RBS and HBOS were not 'owned' by Scotland or even their shares particularly held by Scottish people but their branches and depositors were very much dominated by Scottish people like Northern Rock in Newcastle was very much a regional bank still with many local people as depositors. The failure of two local regional bank would have destroyed the deposits of many Scottish savers, caused huge job losses in Scotland and disrupted a large part of the Scottish economy.

Regional banks, when they are doing basic deposit taking and basic lending and making payments and small business loans to local companies (like they are supposed to be doing rather than pretending to be on a par with the large money centre banks in international capital markets) are quite an important part of a local economy.

Mojang Fri 14-Feb-14 16:05:51

See, that's not true either McFox, all the really bad decisions leading to RBS' downfall were made in Edinburgh by an empire building Scott who wouldn't be told anything by anyone....

Ubik1 Fri 14-Feb-14 16:07:44

Isn't Iceland doing ok now?

England just rescued Scotland again when RBS and HBOS and there was me thinking we also pay taxes in Scotland. Are these banks even 'Scottish' anymore?

I suppose for me the question is what is the benefits of a union with the current Westminster government? Fuck all it seems. They are not interested in Scotland. I think SNP is currently doing a good job.

MoreBeta Fri 14-Feb-14 16:10:03

McFox - HBOS and RBS are both incorporated in Scotland. They may be regulated out of London now but would very much fall under Scottish jurisdiction if it were independent.

FannyFifer Fri 14-Feb-14 16:12:25

Was mostly American money that bailed out the UK banks, there are no Scottish banks.

ItsAllGoingToBeFine Fri 14-Feb-14 16:12:32

Re bailing out the banks. Precedent (and law?) shows that banks are bailed out by the countries they are operating in. Had scotland been independent, and had scotland allowed such a bankingf crisis to develop then scotland would bailed out the proportion of the bank operating in scotland, which it could have afforded, not the entire bank.

MoreBeta Fri 14-Feb-14 16:12:55

I do wonder what an English Referendum would say about 'keeping' Scotland. I suspect England might vote yes to Scottish independence.

McFox Fri 14-Feb-14 16:13:16

Again incorrect. When the crash happened RBS had more staff and customers in the rest of the UK than in Scotland. They have 24m customers globally, with over 17m in the UK. That's not a regional bank, that is you being misled by a name.

You are trying to shift the blame to Scottish inability to manage banking, when the truth is that the collapse was the result of greed and a fundamental failure throughout the entire system.

OddBoots Fri 14-Feb-14 16:15:44

Scotland would leave itself in a very tricky position if it didn't take on its share of the debt, regardless of what currency it uses. Every developed country borrows and loans money to other nations, it's how the world economy works, if Scotland just said they wouldn't pay their debts no other country would trust them.

MoreBeta Fri 14-Feb-14 16:16:19

FWIW I have always thought a Parliament of the Islands is the way to go with local Scots, Welsh, N. Irish and English assemblies voting on local national issues but then coming together periodically to vote on issues of UK interest. Isle of Mann, Guernsey, Jersey and other Crown Dependencies might even wish to join in.

ItsAllGoingToBeFine Fri 14-Feb-14 16:19:10

if Scotland just said they wouldn't pay their debts no other country would trust them

Scotland would never say that. They might say, "as you are not sharing assets we will not share the debt" but that is completely different.

MoreBeta Fri 14-Feb-14 16:19:41

McFox - yes HBOS/RBS had more employees outside Scotland but their dominant position inside Scotland is crucial to the local Scottish economy. A failure of HBOS and RBS would undoubtedly have had a huge impact on Scotland. I am not allocating blame - just saying what the impact would be. Potentially devastating for Scotland and less devastating for England &Wales and N.I

FannyFifer Fri 14-Feb-14 16:20:45

Wouldn't be defaulting as Westminster already said they would take full responsibility for debt.

Debt is also tied to currency, a brand new state not using same currency is under no obligation.

We also have a 10% share in BoE assets, it belongs to the UK not Westminster.

No assets no debt.

"An independent Scotland would in such circumstances have no debt, a budget surplus (because our current deficit is entirely down to UK debt repayments – without those Scotland would be in the black BEFORE it even factored in savings from different policy choices, like the £800m a year on defence), and a vast reserve of tangible resources, most notably oil, as security.
The rUK, by comparison, would have a debt of £1,500,000,000,000 and a huge budget deficit. If you were going to lend someone money, would you choose the guy living within his means with plenty of assets, or the guy who already owes his entire annual salary and is still spending more than he earns?"

Mojang Fri 14-Feb-14 16:21:08

No, the banking system was weakened by the issues you state McFox but RBS suffered more than the rest because of one Scot's ego. The "staff" (wherever they were based)had nothing to do with, weren't allowed any say in, the atrocious acquisitions he made or the ridiculous status ssymbol he built in Edinburgh. People in London and elsewhere tried to tell him. I was there! I would be funny if it weren't so tragic

ItsAllGoingToBeFine Fri 14-Feb-14 16:24:16

Scottish GDP in 2008 was an estimated £145 billion. The cost to the UK of the RBS / HBOS bail out in 2008 was £88 billion. However the actual Scottish share on a per capita basis was £8.8 billion, and on the debt accrued by the Scottish registered banks which would have been an independent Scotland's liability is estimated at £2.4 billion.

DoctorTwo Fri 14-Feb-14 16:33:58

Scotland could issue a currency backed by oil, timber rights and whisky instead of gold for example. That would be quite popular I suspect. A currency backed by real assets that people holding the currency have a legal claim on.

Asset based currency? The corrupt bankers would never allow that in a million years. How about they do something electronic and call it Scotcoin? A computer based currency is not as good as an asset based one but is harder to defraud and, if done correctly, is open and democratic.

Scotland only has the Pound Sterling because it had to be rescued by England in the 1800s when its banks failed. in effect, England just rescued Scotland again when RBS and HBOS got into difficulty.

It was the 18th century. They were tricked into investing their time and money in an inhospitable part of Panama, and told (by the English) to take wool, blankets etc to sell to the natives. This effectively bankrupted the Scots and they were forced into signing the Act Of Union in 1707. RBS and HBOS are going to need another bailout soon, they're still bankrupt. Without QE all the major banks would be.

McFox Fri 14-Feb-14 16:34:12

One Scot's ego and greed upheld and encouraged the egos and greed of men and women from lots of other countries.

MoreBeta Fri 14-Feb-14 16:50:22

DoctorTwo - good post.

You are right about the banks needing another bailout. The bad loans are being held of balance sheet by shuffling them into subsidiaries. Creative accounting doesn't make the real economic issue go away though. Bad debts backed by assets that are not worth the value of the loan cannot be passed around forever.

The latest wheeze out of the EU is to mandate that EU citizens use their savings to buy up the bad loans from the banking system.

Riiiiight!!!!!.

That would be like asking us to put our savings in a bank that was about to go bust but without a Govt guarantee. No thanks.

Mark my words, by hook or by crook the financial black hole in the banking system and unsustainable Govt debt will be 'resolved' by taking ordinary citizens' savings and pensions. See Cyprus for details.

flatpackhamster Fri 14-Feb-14 17:36:32

FannyFifer

Was mostly American money that bailed out the UK banks, there are no Scottish banks.

No, they quickly became 'British banks' when Gordon Brown wanted the English taxpayer to bail them out to save Scottish jobs, didn't he?

DoctorTwo

It was the 18th century. They were tricked into investing their time and money in an inhospitable part of Panama, and told (by the English) to take wool, blankets etc to sell to the natives. This effectively bankrupted the Scots and they were forced into signing the Act Of Union in 1707. RBS and HBOS are going to need another bailout soon, they're still bankrupt. Without QE all the major banks would be.

Yes, of course it would be England's fault. Of course. Poor Scotland, poooooorrrrr weeeeeee Scotland. Everything would be fine for you, if it wasn't for the evil sassenachs. yawn

ItsAllGoingToBeFine

Scottish GDP in 2008 was an estimated £145 billion.

The cost to the UK of the RBS / HBOS bail out in 2008 was £88 billion. However the actual Scottish share on a per capita basis was £8.8 billion, and on the debt accrued by the Scottish registered banks which would have been an independent Scotland's liability is estimated at £2.4 billion.

So what you're saying now is that you think Scotland should be responsible for just 10% of Scottish bank's debts and none of British banks ones. How - Scottish of you.

Either they're Scottish banks, in which case you get 100% of the debts, or they're British, in which case you get 10% of ALL the bank's debts - which was estimated by the NAO to be £850Bn.

ReallyTired Fri 14-Feb-14 17:53:17

The banking problems are an international issue.

The problem with scotland and england having the same currencies is that they would have to have the same economic polcies. This is hard to manage if you have two soveriegn nations. You just have to look at the Euro to see the mess that Ireland and continental europe are in.

Lets see whether the scots want independence or not. We can cross the bridge of deciding whether to share a currency if scotland does choose independence.

roadwalker Fri 14-Feb-14 17:58:35

I am amazed that the SIP want a currency union, I thought they wanted independence
Until the euro crisis they said sterling was 'a mill stone around Scotlands neck' how times change

Alibabaandthe40nappies Fri 14-Feb-14 18:09:22

But Fanny regardless of debt, Scotland would be like a newly self-employed person with no credit record, or not much of one. It is naive in the extreme to try and portion out what has happened in the past and claim that Scotland is and will be 'in the black'.

I have no desire to see the Union broken up, but I am fascinated by the whole situation. What I would hate to see is a Scottish population vote 'Yes' on the basis of misinformation and blind hope that things will be as per Salmond's wish list, only to heartily regret it 10, 20 years down the line.

ItsAllGoingToBeFine Fri 14-Feb-14 18:18:20

Scotland would be like a newly self-employed person with no credit record

But with a massive inheritance to fall back on.

Ubik1 Fri 14-Feb-14 18:22:37

Lets see whether the scots want independence or not. We can cross the bridge of deciding whether to share a currency if scotland does choose independence.

Yes that's how I naively thought things would progress. It seems sensible. If Scotland votes for independence then surely it's in everyone's interests to make sure the transition is smooth and that both economies can complement each other. That will require some negotiation from both sides.

There's an attitude that Scotland should be punished for wanting civic independence 'you've made your bed,' rather than a pragmatic view that that difficulties could be worked through.

ReallyTired Fri 14-Feb-14 18:33:18

I consider myself English although I have lots of scottish relatives. I don't care whether Scotland becomes independent or not.

I feel that SNP has changed voting rules to skew the result. (Ie. allowing 16 year olds to vote.) It will be interesting to see if allowing children to vote in an election makes any difference. It may well be that teens are too apathetic.

FannyFifer Fri 14-Feb-14 18:43:50

16 year olds can work,get married & join the army, not children then.

Likeaninjanow Fri 14-Feb-14 18:44:39

Yes...these scottish banks are so scottish that staff have been told they will lose their jobs if the end result is a 'yes' vote.

FannyFifer Fri 14-Feb-14 18:46:34

What bank said that? Barclays said they would make it work whatever the result of indyref & RBS has denied the comments attributed to them.

Likeaninjanow Fri 14-Feb-14 18:49:37

I heard it was RBS.

BarkWorseThanBite Fri 14-Feb-14 18:51:39

Scotland and England are an optimal currency area. This means the economies move pretty together in terms of economic cycles - they have a very porous borders for goods and services and labour and therefore it is in England's interest (as well as Scotland) to have a currency union with Scotland, particularly the north of England.

Also, please remember the pound is the currency of the United Kingdom - so Scotland is just as entitled to keep it as England... huh

FannyFifer Fri 14-Feb-14 18:54:31

RE RBS was Vince cable talking bollocks.

http://www.thecourier.co.uk/news/scotland/rbs-would-adapt-to-independence-1.218497

Likeaninjanow Fri 14-Feb-14 18:55:57

No, it was a comment made by a manager to a team working there. That's what I was talking about anyway...

Although, said manager could have been reciting Vince bollocks. Who knows.

flatpackhamster Fri 14-Feb-14 18:56:49

Message deleted by MNHQ. Here's a link to our Talk Guidelines.

JapaneseMargaret Fri 14-Feb-14 19:01:37

Sorry to miss all this - just waking up. All very interesting and enlightening.

Also, please remember the pound is the currency of the United Kingdom - so Scotland is just as entitled to keep it as England... huh

This is a joke, right...?!

ItsAllGoingToBeFine Fri 14-Feb-14 19:09:16

If Scotland wasn't such a massive drag on England's economy

Scotland contributes more to Westminster than it receives back...

DoctorTwo Fri 14-Feb-14 19:12:11

flatpack I am an evil Sassenach. grin From the Tory Utopia that is Surrey. Stick that in your corporatist pipe and smoke it.

The Evening Harold shares its scary outlook for an independent Scotland. shock

Likeaninjanow Fri 14-Feb-14 19:14:17

Also, I don't have any whinging handout basket cases anywhere near me, so it's definitely not 'full' of them.

The highlands are also vair empty...not a whinger for miles and miles...

scaevola Fri 14-Feb-14 19:16:19

Independence is not devo-max.

Scotland can keep a Scottish pound, but like the rest of UK would have to back its independent currency for itself. If Scotland decides not to play interns of sharing debts, it also won't get a share of assets. And that might make it difficult to back a new currency adequately.

K999 Fri 14-Feb-14 19:16:36

What I dont get is why don't the Tories (and other unionists) say why they want to keep Scotland part of the UK?? Is it really because they like haggis and deep fried mars bars or is it because they need the revenue generated by Scotland??

All I ever hear from them is that we have to keep the union together.......not why Scotland shouldnt leave??

ItsAllGoingToBeFine Fri 14-Feb-14 19:19:16

If Scotland decides not to play interns of sharing debts, it also won't get a share of assets

That, of course, cuts both ways.

And that might make it difficult to back a new currency adequately

Although, of course, Scotland has a plethora of natural resources, as well as assets that are unlikely to go anywhere.

ItsAllGoingToBeFine Fri 14-Feb-14 19:21:10

All I ever hear from them is that we have to keep the union together.......not why Scotland shouldnt leave

A lot of the commentators have noticed this. If they put forth a thoughtful and positive case for the Union then maybe the undecideds would be moving towards No rather than Yes

K999 Fri 14-Feb-14 19:22:25

And if Scotland was such a drain on the rest of the UK, surely they would glad to see the back of it?! It's not like the Tories/Lib Dem have an electorate in Scotland that they have to keep sweet??

SantanaLopez Fri 14-Feb-14 19:25:03

Although, of course, Scotland has a plethora of natural resources, as well as assets that are unlikely to go anywhere.

Resources mean fuck all without the money to exploit them. There are hundreds of countries with excellent resources. Scotland is not that unique.

All I ever hear from them is that we have to keep the union together.......not why Scotland shouldnt leave??

It's naturally much harder to be the 'negative' side in a debate, plus many of Westminster's politicians are in a sort of quandary because they will not be able to vote in the referendum themselves. I agree that the Better Campaign is lacking.

ItsAllGoingToBeFine Fri 14-Feb-14 19:27:27

Resources mean fuck all without the money to exploit them. There are hundreds of countries with excellent resources. Scotland is not that unique

Of course Scotland is not unique. That is why there are so many other examples of successful small countries with similar demographics.

I can't see the oil companies pulling out of the North Sea, or people suddenly stopping buying fish...

scaevola Fri 14-Feb-14 19:28:05

"Although, of course, Scotland has a plethora of natural resources, as well as assets that are unlikely to go anywhere."

Is that going to be sufficient? I can see why it could be, but also why, in markets as they actually exist, natural resources aren't a synonym for economic success or stability.

And of course, if pro-independence lobby as a plan B based on the, perhaps they'll unveil it soon. There's not that long to go.

K999 Fri 14-Feb-14 19:29:19

They don't have to be the 'negative' side of the debate.

They could be 'positve' about why Scotland should not leave the union? Ie Scotland contribute xxxxxx which is why we want them to stay????

SantanaLopez Fri 14-Feb-14 19:32:54

That is why there are so many other examples of successful small countries with similar demographics. I can't see the oil companies pulling out of the North Sea, or people suddenly stopping buying fish...

These countries don't have the same political or economic history as an independent Scotland would. No debt, no assets, and a horrendous international reputation. The interest rates on any loans would be utterly crippling.

It won't happen overnight, you are right, but there has to be massive investment to keep them growing and flourishing. This is the problem.

SantanaLopez Fri 14-Feb-14 19:38:23

They could be 'positive' about why Scotland should not leave the union? Ie Scotland contribute xxxxxx which is why we want them to stay????

The nationalists use Scottish contribution figures to support independence, so they can't use that argument.

Scottish people actually already get more spent on them than any other region in the UK. Highlighting this won't do them much good in the rUK.

On top of this, with Holyrood's devolved powers, there's really not much Westminster can promise.

K999 Fri 14-Feb-14 19:42:17

I'm not talking only about contributions re figures/money.....I'm talking about what Scotland 'contribute' culturally, historically,socially etc?? Why doubt they say anything about this???

SantanaLopez Fri 14-Feb-14 19:50:00

I dunno, I suppose the culture argument can only do so much. I know I am a much more analytical person who would not be swayed by that!

K999 Fri 14-Feb-14 20:00:44

But surely if one side is advocating that Scotland should stay should part of the UK they should set out the reasons why? It's not all about the numbers. Sure, that's a big part, but if they want us to be 'one nation' they should be recognising what Scotland contributes in a positive way.......or is the 'no' campaign really about not wanting to lose revenue???

SantanaLopez Fri 14-Feb-14 20:04:31

I suppose that's what David Cameron did the other day- did you see his speech in the Olympic Stadium?

K999 Fri 14-Feb-14 20:14:11

Yes.

But I think it's a little, too late. And soooo not genuine. And no doubt, DC won't want his legacy to be "the PM who was in charge when the union disintegrated"......

And I suspect there are a few in his party who think the independence debate is unworthy.

OldLadyKnowsNothing Fri 14-Feb-14 20:20:15

Ha ha, DC's speech was hilarious, my twitter was full of rUK saying, "Run, run like the wind!" So that worked...

SantanaLopez Fri 14-Feb-14 20:33:47

And I suspect there are a few in his party who think the independence debate is unworthy.

If you aren't getting a vote in it, why would you bother to get involved?

Don't get me wrong, the cultural stuff is important and the No campaign is sadly lacking but I don't think it's the most important part of the debate.

K999 Fri 14-Feb-14 20:42:28

My point exactly - it shouldn't only be the folk who have a vote that should be bothered about it confused

Surely this affects the whole of the UK???? Why is there such a lack of media coverage down South?

SantanaLopez Fri 14-Feb-14 20:51:09

It does affect the entire country, but when only 5 million out of 63 million have a vote, why would the 63 million bother to take any more than a passing interest?

SantanaLopez Fri 14-Feb-14 20:51:39

You can tell it's Friday night... 63 million minus 5 million is 58 million. Sorry!

CogitoErgoSometimes Sat 15-Feb-14 10:30:43

I have a sneaky feeling that if the remaining 58 million were to be given a vote it would be a resounding 'off you trot if it stops your whinging'. hmm

Solopower1 Sat 15-Feb-14 11:56:22

Can anyone on here give us one 'fact', either for or against independence, that we can all agree on?

Thought not. So it's all down to belief, prejudice and gut feeling then? Thought so.

In which case, the question we should be asking ourselves is: Do we fancy a huge leap into the dark and scary unknown? Or, to put it more positively, are we brave enough to follow a dream?

Either way, from the minute Scottish Independence started to look (to some) as if it might be possible, the status quo was not an option - but that's OK, most of us want some sort of change, I expect. But in wishing for change, we have to accept the bad with the good, because you never get one without the other. Our populations are made up of people who are so diverse they could be living on different planets. What benefits one sector will disadvantage another.

<Puts on that hat in Harry Potter that decides which house you belong to - might as well ...>

RedToothBrush Sat 15-Feb-14 12:53:04

Ubik1 Fri 14-Feb-14 16:07:44
Isn't Iceland doing ok now?

Thats the myth that it is. The truth is a lot more painful than that. And I actually despair of anyone who uses the example of Iceland as an economic example to follow as they clearly don't have a very good understanding of the consequences for the average Icelander and what they have to live with. They are in a situation where their children will still be paying for the collapse of their economy.

Here is an illustration of the worthlessness of the Icelandic Currency. The difference between a mortgage taken in Iceland, and one taken in Norway. For a mortgage worth ISK 26 million (USD 224,000), the Norwegian winds up paying back ISK 40 million. The Icelander, on the other hand, pays back ISK 500 million (USD 4.3 million).

Still think that Iceland is doing ok now?

Ubik1 Fri 14-Feb-14 13:36:01
I don't really understand why Westminster wouldn't allow Scotland to keep the pound.

I suppose if Westminster is determined to not have currency union, Scotland could tell them to shove the national debt and walk away.

So you don't think that there would be any economic consequences to doing so? Even if Scotland has natural resources it can sell and use, I'm not sure that that will be helpful in terms of borrowing. The Scottish government will have to borrow from somewhere. The English if saddled with debt which they feel the Scottish have defaulted on will be reluctant to do that. Maybe other countries might be willing to, but again it depends on how the credit agencies view a move like that. Potentially you could find a situation where it would be very expensive indeed to borrow money...

The example above of an Icelandic mortgage doesn't look so unlikely to a Scotland that walks away from debts. England would probably end up honouring them, to protect its own credit worthiness but I do not think that Scotland would be viewed internationally favourably for it, because of the instability and uncertainty it would create in the markets whilst it was all be fought over and sorted out. It would end up being a black mark against them in the end.

Is that what Scots really want?

Personally I have always found the idea that Scotland would retain the pound in the name of Independent an odd one. It just makes no sense. At all. Its totally contradictory.

To me its not England V Scotland. Its understanding economics and politics versus being a clueless numpty who believes the myths of the media of things like the Icelandic crisis without bothering to try and fully understand them.

ItsAllGoingToBeFine Sat 15-Feb-14 12:57:43

Can anyone on here give us one 'fact', either for or against independence, that we can all agree on

And that, Ladies and Gentlemen, is an extremely important point. There are no certainties with independence or a no vote. Both outcomes are a leap into the unknown.

Solopower1 Sat 15-Feb-14 13:10:02

Following my own line of reasoning (for once) I have just realised that the outcome will be decided by those who have most to gain from change - any change - and nothing to lose by a leap into the unknown. (I know it's not rocket science, but my brain doesn't work very fast).

So poor people in Scotland want change. The thing is - those are the people who don't normally vote. So it's up to the SNP to mobilise them I suppose. But the very fact that the main supporters of independence will be from the lower social classes will automatically alienate the sectors of society that don't identify with them. Hence my colleague's remark the other day, that she would vote for independence, but she doesn't like the look of the other people who are going to vote for it. Which I didn't understand at the time, but I do now.

So a personal voyage of discovery for me, which I am sharing with you.

Solopower1 Sat 15-Feb-14 13:12:54

So it's a class struggle! (I'm on a roll here)

Think Clearances, think South Sea Bubble. T'was ever thus.

ItsAllGoingToBeFine Sat 15-Feb-14 13:23:24

I suppose it is sort of. Westminster/Tories/politicians are mostly the elites with a very far right view point. Think every man for them self. If you are in poverty its your fault for not trying hard enough and the state should not help you.

Scotland/north England very broadly speaking old Labour heartland, more working class, more socialist values.

New labour/Tories/lib dems have just kept moving WM politics further and further right.

Solopower1 Sat 15-Feb-14 14:37:13

So, my learned friends, as we have proved that there are no absolute certainties in this debate, this leads us to the inevitable conclusion that the results of the referendum will depend not on reasoned argument, but on the number of people who feel they have nothing to lose - and who feel strongly enough about it to vote.

And these are the people who will decide the futures of those of us who have quite a lot to lose.

There's a rather piquant little irony here. Methinks.

Ubik1 Sat 15-Feb-14 14:41:44

What is it that you have to lose Solopower?

And why should one person's vote mean any more than another person's? Is it because they don't have much money?

Ubik1 Sat 15-Feb-14 14:44:42

And the working classes in Scotland typically vote Labour (for all the good it's done them)

RedToothBrush Sat 15-Feb-14 14:53:49

To be honest, I think that politics in the UK, has turned into a situation where the main reason to vote isn't to vote FOR something, but to vote against the alternative.

Which is actually quite sad and not particularly healthy state for democracy to be in.

Solopower1 Sat 15-Feb-14 14:55:31

One person's vote means the same as anyone else's. It just depends how many of 'them' there are and how many of 'us'. Obv.

What have I got to lose? My rather pleasant, safe, secure little lifestyle, I suppose. I think we've got it just about right in Scotland - the best of all possible worlds - at the moment.

But I would be quite interested in what would happen in the event of independence. I just wouldn't want to here in Scotland during the 30-40-year adjustment period. On the other hand, great change brings great opportunities. For some.

Ubik1 Sat 15-Feb-14 14:56:45

It's interesting how the pro- union position is always framed in these finger-wagging, patronising terms. Rather than discussion, rather outlining the benefits to me, a public sector worker with three children, of staying in the union.

The whole pro-union campaign seems to be put in terms of 'it's too complicated/difficult/scary' and 'you are all to stupid to understand/run a country/be grateful for whatever you have.

I feel like I am being asked to just put up with the same old shit fir the next 50 years just so some wealthy people can continue to do well out of the union and others, who don't live in Scotland anymore, can continue to feel sentimental about the old country.

Ubik1 Sat 15-Feb-14 14:57:45

Sorry Solo - when I said finger wagging I didn't mean your post smile

Solopower1 Sat 15-Feb-14 15:00:10

'I think we've got it just about right in Scotland - the best of all possible worlds - at the moment'. I take that back, and wish to remove it from the record. Of course we haven't got it right, and we need to work to make it better.

Solopower1 Sat 15-Feb-14 15:02:28

Xposts. Thank you, Ubik 1. FWIW, I don't think we would be more than capable of self-rule. It would just take a while, that's all. And we could hardly do a worse job than the Coalition. Would that even be possible?

Solopower1 Sat 15-Feb-14 15:02:56

I mean I think we would be more than capable ...

RedToothBrush Sat 15-Feb-14 15:04:19

Well if you use the example of Iceland being in a good state as an example, I would question your understanding of economics tbh.

It means you are buying into a romantic media vision of what happened there rather than an honest version and how much people are struggling with the reality.

Is it that the pro-union campaign are simply patronising? Or are they trying to present a vision that is less rose-tinted and they are highlighting the fact that the independence campaign isn't being as honest as it should be either?

One appeals to heads, one appeals to hearts.

VelvetGecko Sat 15-Feb-14 15:07:59

Maybe we just keep the Scottish pound. According to most English shop keepers it is a foreign currency.

VelvetGecko Sat 15-Feb-14 15:08:20

should

Solopower1 Sat 15-Feb-14 15:13:13

... it would just take a while to adjust, I meant. Hope that's not patronising?

I think it's hearts and hearts tbh, RedToothBrush. Although I take your point about Iceland. And neither side is being entirely honest imo. Both sides are trying to manipulate us, one way or another.

Ubik1 Sat 15-Feb-14 15:27:31

I didn't use Iceland as an example - I was asking a question as there are many interesting and informed people on the thread.

Ubik1 Sat 15-Feb-14 15:31:03

I would also point out that I do not understand alot about economics. I do understand about triaging patients etc that does not make me a numpty

FannyFifer Sat 15-Feb-14 15:34:19

www.poundsterlinglive.com/breaking-news-articles/877-why-scotland-should-peg-an-independent-currency-to-the-british-pound-sterling-554654
Deutsche bank view on currency.

archive.is/VASeD
Wall Street journals view.

And and interesting view from the Adam Smith Institute.
www.adamsmith.org/news/press-releases/comment-an-independent-scotland-would-be-better-off-using-the-pound-without

Not much of these reasonable,thought out articles to be seen in Scottish press.

Solopower1 Sat 15-Feb-14 15:43:07

'Rather than discussion, rather outlining the benefits to me, a public sector worker with three children, of staying in the union'.

That's exactly what we're all trying to find out - how would it benefit us to stay or to go. But they can't tell us, because they don't know. No-one does. So in choosing to separate, we have to take the risk of things getting worse, or decide the stakes are too high to gamble.

Solopower1 Sat 15-Feb-14 15:49:29

Interesting articles, FannyFifer. It's good to get an international perspective - even if one of them is by the dreaded Adam Smith Institute.

Exciting times.

HollyHB Sat 15-Feb-14 16:43:51

Solopower - it's not much of a gamble. Anyone who has a UK passport is not going to lose it just because they live in Scotland.

But as someone pointed out (on another thread?), it is a class issue thing. So to an extent it depends on whether one is working class, middle class or other.

PigletJohn Sun 16-Feb-14 20:02:41

As a person of Scots origin resident in England, I am a UK citizen. I am very happy for the Union to continue. However, if the people who now live in Scotland vote for independence, I wish them well. I will then be living in a different country, and I would not expect the country I live in to be entering into obligations to form a currency union with a foreign country. I don't think the voters of E&W&NI would vote for it, and I believe the politicians who say the offer is not and will not be on the table.

Currency union is a big burden to carry, especially between nations that are not trying to achieve greater political union. In the Eurozone, the people of Germany are resentful because they feel they were obliged to bail out other European countries that got into a muddle.

Next time RBoS goes bankrupt, E&W&NI will doubtless be among those wishing to help, as no doubt will the rest of the EU, but the BoE will no longer be Scotland's central bank, and will be under no special obligation.

niceguy2 Sun 16-Feb-14 23:14:54

Scottish independence: Barroso says joining EU would be 'difficult'

Oh dear. Looks like the EU President is now saying that ".... it's going to be extremely difficult, if not impossible" for Scotland to join the EU. Not because England would object. But in fact that objection may come from other countries such as Spain who would be petrified that if the precedent was set then Catalonia would try to follow suit.

So....two of the most fundamental reasons for Scottish independence now appear to be HUGE risks.

1. Scotland will keep the British pound. Except the head of the civil service, the chief of the BoE both advise against rUK entering into a deal. And all three main parties have said they won't do it either.

2. Scotland will join the EU. Bearing in mind that in the beginning Salmond argued that membership would be automatic. That turned out to be crap. So he's been spinning that it'd be a formality. Except now the EU president is saying actually it could be downright impossible.

What else have the SNP got planned that could turn out to be utter bollocks? How can anyone be trusting them with the future of their country?

PigletJohn Sun 16-Feb-14 23:40:40

1a
It used to be fundamental that an independent Scotland wouldn't use the UK pound. Scotland would be freed from the shackles of its oppressive neighbour and would embrace the freedom and security of the Euro.

But surely the decision will be taken on emotional grounds anyway?

ReallyTired Sun 16-Feb-14 23:45:46

I think that the spanish are worried that if Scotland becomes independent and joins the EU that the Basque region of spain will follow suit. It is vindictive of spain to refuse to let scotland join the EU. I hope that other countries including England would put pressure on Spain to let the scots in.

Very few English people feel vindictive towards scotland. I don't think many English people are particulary bothered if scotland chooses independence. Scotland is not a colony to be subdued.

I think that English politicians are fearful of currency union with an independent country because they have seen what a disaster the EURO has been. Unlike the Eurozone England and scotland are moving apart politically. It would be a nightmare if the English and the Scottish goverment had diametrically different economic policies.

PigletJohn Sun 16-Feb-14 23:55:02

Spain would not want Gibraltar to apply for membership either.

Umlauf Mon 17-Feb-14 10:25:27

It would be catastrophic for Spain if Scotland gained independence and eu entry. It is a relatively new country and unlike the uk and Scotland, relies heavily on Catalonia and the Basque Country for most of its income. I think I read somewhere recently that 30% of Spain's money comes from Catalonia! the basque region is also very comparatively wealthy. If the precendent was set by Scotland, Spain could very easily implode leaving the very poor south (50% youth unemployment in Andalusia) in an extremely precarious scenario. It's not "vindictive" to want to protect your people.

CogitoErgoSometimes Mon 17-Feb-14 10:33:04

I think Baroso has probably done more for the 'Better Together' campaign than everyone else put together.

niceguy2 Mon 17-Feb-14 11:32:52

It is vindictive of spain to refuse to let scotland join the EU.

Vindictive means there's an element of revenge. In Spain's case there is none so their position is not because of vindictiveness but self interest.

Spain cannot risk letting Scotland join the EU because then it sets a precedent for it's own regions that wants independence from Spain. In short if they let Scotland join they risk their very own country.

That's not vindictiveness but the complete opposite.

I'm listening to Salmond now who is spinning like mad. Apparently Scotland is loaded because of the oil/gas in the North Sea. A 'hotbed' of success.

If that's the case I don't see why he's so desperate share the pound. Set up your own currency and make the rUK so envious that we'd want to adopt the Scottish pound!

FannyFifer Mon 17-Feb-14 14:31:42

Scotland is not a region.

flatpackhamster Mon 17-Feb-14 14:45:37

Do you prefer the term province?

FannyFifer Mon 17-Feb-14 14:47:56

Think you will find country is the word, same as England.

ReallyTired Mon 17-Feb-14 14:50:47

The united kingdom is four countries that share a monarch and a parliment. Scotland has its own language, history and culture. Nearest comparable situation to the UK is the US with its 51 states.

PigletJohn Mon 17-Feb-14 15:07:00

some prefer the word "nation"

flatpackhamster Mon 17-Feb-14 15:10:56

It would certainly be a more accurate term than country.

Umlauf Mon 17-Feb-14 18:01:02

fannyfifer if by that you mean the Spanish situation isn't comparable with the UK/ Scotland's as they are merely "regions" The Basque Country has it's own language (much more widely spoken than the Scottish) history and culture and local govt. They would very much consider Scotland's fate to be a precendent for their own and for their situation to be comparable.

OberonTheHopeful Mon 17-Feb-14 20:07:32

I'm struggling to understand why rUK would want, effectively, to underwrite an independent country's public debt, and be a lender of last resort (and regulator) for its banks. Especially given the size some of those banks relative to Scotland's GDP.

PigletJohn Mon 17-Feb-14 20:26:44

It doesn't want to.

OberonTheHopeful Mon 17-Feb-14 20:35:36

That's my point really, the 'yes' campaign keep saying it's in the interests of rUK, but that just doesn't seem to be true. Their campaign seems to be predicated on a number of assumptions (EU membership would be another one) that may not be true, with no published alternative plans. It seems a bit half baked!

PigletJohn Mon 17-Feb-14 20:40:52

Person "A"
I want you to give me X, and you should agree because it is in your best interests

Person "B"
No, I don't agree that it's in my interests, and I don't want to give it to you

Person "A"
You're only saying that because you're a horrid bully!

Elderberri Mon 17-Feb-14 20:48:01

Independence vote will never go away, there will be vote after vote after vote for years and years. This way nationalist scots will feel they are doing something about it, while enjoying the benefits of the union.

Euphemia Mon 17-Feb-14 20:51:37

Elderberri I disagree - if it's "No" this time, that'll kill the question of independence for decades. After all the build-up, I just don't believe people will have the appetite for going through the whole thing again.

OddBoots Mon 17-Feb-14 21:00:28

I would think that the possibility of a repeat vote will depend on how close it is and also where the money is coming from to fund the voting process.

PigletJohn Mon 17-Feb-14 21:01:15

It's an emotional decision, but there are practicalities to be worked out. In the long run, an independent Scotland would probably want to be a member of the EU and the Eurozone. How to get there from here is a question that has not yet been answered.

OberonTheHopeful Mon 17-Feb-14 21:08:19

An interesting piece on the BBC this evening, polls are showing little movement in Scotland or elsewhere in the UK.

The number in favour of independence within Scotland has increased by no more than a couple of percent within the past few weeks, with the number against still at just over fifty percent (about twenty percent undecided). Within the rest of the UK, only about a quarter are in favour of a currency union with an independent Scotland.

flatpackhamster Mon 17-Feb-14 21:17:41

OberonTheHopeful

That's my point really, the 'yes' campaign keep saying it's in the interests of rUK, but that just doesn't seem to be true. Their campaign seems to be predicated on a number of assumptions (EU membership would be another one) that may not be true, with no published alternative plans. It seems a bit half baked!

Half baked? It hasn't even been proved yet.

flatpackhamster Mon 17-Feb-14 21:19:06

Euphemia

Elderberri I disagree - if it's "No" this time, that'll kill the question of independence for decades. After all the build-up, I just don't believe people will have the appetite for going through the whole thing again.

If it's a no vote this time, the yessers will simply blame The Sassenachs for ruining their glorious freedom and hints will be made of a big evil conspiracy all funded by Big England.

SantanaLopez Mon 17-Feb-14 21:24:41

OberontheHopeful-

1. the UK is Scotland's principal trading partner accounting for 2/3 of exports in 2011, whilst figures cited by HM Treasury suggest that Scotland is the UK's second largest trading partner with exports to Scotland greater than to Brazil, South Africa, Russia, India, China and Japan put together

2. there is clear evidence of companies operating in Scotland and the UK with complex cross-border supply chains

3. a high degree of labour mobility - helped by transport links, culture and language

4. on key measurements of an optimal currency area, the Scottish and UK economies score well - for example, similar levels of productivity

5. evidence of economic cycles shows that while there have been periods of temporary divergence, there is a relatively high degree of synchronicity in short-term economic trends

I am a no, btw. This was in the White Paper.

PigletJohn Mon 17-Feb-14 21:28:51

if the people who live in England don't want to enter into a currency union, no-one is going to make them.

mistlethrush Mon 17-Feb-14 21:34:31

The UK dabbled with the euro and worked out that it wasn't going to work (pity Greece etc didn't do the same really) - why on earth would they want to link the currency with a different country instead?

OTheHugeManatee Mon 17-Feb-14 21:42:57

I have to say I don't really understand why it would be in the UK's interests to form a currency union with a separate nation, act as their lender of last resort etc. I also don't understand how it would be sensible to do this unless a common fiscal policy were in place across both nations. And if you have a common fiscal policy, what's wrong with the current situation?

Equally on the 'no assets, no debt' argument: obviously if Scotland were to leave the Union, they would take a share of the Bank of England's reserves. In that sense they would absolutely get some 'assets'. This is a totally separate issue from whether or not (or on what terms) they get to keep sterling as a currency. Sterling is not an 'asset' in and of itself, it's a currency in which assets can be counted. No-one's quibbling that Scotland would get its share of the Bank of England's assets, or even that they can keep those assets in sterling if they want to - just whether they will get any say in the management of sterling - the currency - after independence (they won't).

They are basically saying that if they can't carry on having a say in how sterling is managed, once they've left the union for which sterling is the currency, they will default on their debts. This seems unwise to me, as it will mean - having abandoned the BoE as lender of last resort - that they then make themselves a credit pariah around the world and thus push interest rates on any subsequent debts sky-high. And natural resources or no, all governments need to borrow.

It's a bit like saying 'OK, well if you're going to ask me to stop turning up and trying to have dinner at this member's club I'm no longer a member of, I'm going to trash the place and cut up all my credit cards and get in trouble with the police, so nyer." And then looking surprised when their application to join other clubs is turned down. It doesn't make sense.

Oh and FWIW I don't really care whether Scotland leaves or not. In some ways I'd like to see it happen, just because I'm curious to know what would happen. I'm just morbidly fascinated by the debate, as so much of it seems just a bit nuts hmm

SantanaLopez Mon 17-Feb-14 21:46:35

Completely agree, Manatee, what a great post.

I have been genuinely horrified/ surprised by people saying 'George Osbourne saying we can't have the pound made us want to vote yes,' as if to spite him. It's so childish and petulant, 'we don't like being told what to do'. What a truly great basis to build a new state on.

PigletJohn Mon 17-Feb-14 21:56:40

How long ago was it that the Independence scheme was to dump the pound and go for the Euro?

SantanaLopez Mon 17-Feb-14 22:05:14

2009 rings a bell.

OberonTheHopeful Mon 17-Feb-14 22:10:41

I agree that the case hasn't been 'proven', but the only way of truly doing so would be in the event of Scottish independence. It seems an awful risk to take based on so many assumptions.

rUK is Scotland's largest export market, and one of rUK's largest (IIRC Germany just gets in ahead, though it shifts year by year), but then that represents around 60% of Scottish exports yet only around 10% of rUK exports.

There are cross border supply issues with all sorts of nations, including Germany (I work for a German company) and these haven't proven at all insurmountable. Yes, there would be exchange costs but these tend to amount to a very small percentage of GDP. These issues, and labour mobility, are made easier (and less expensive) by a free trade agreement. This can exist without a currency union (and currently does, between the UK and EU).

The biggest issue for many isn't about an optimal currency area, but about the underwriting by rUK of Scottish public debt and bank liabilities that is a consequence of currency union. I believe that the three main UK parties are right to assume that there is little public appetite for this.

I would certainly wish Scotland well if they choose independence, but I do believe that the plans, as presented, assume too much, with little or no contingency if those assumptions turn out to be incorrect. Complaining of 'bullying', and describing the EU Commission President as "preposterous", doesn't strike me as a reasoned argument.

niceguy2 Tue 18-Feb-14 00:26:39

ok. So let's assume Scotland gains independence. They continue to use the pound but they're not in the EU. Membership could take years.

Would Scotland expect to continue in the free trade market of the EU whilst not a member and possibly never be one?

what if they aren't allowed and are slapped with tariffs?

IrnBruTheNoo Thu 20-Feb-14 16:29:49

Oh dear, FannyFifer. I feel you're being ganged up on on this thread....there's not enough Yes! supporters on the thread to balance it out with regards to the currency union being discussed..

I'm a Yes! supporter (still need to get a badge and wear it with pride) and cannot see the issue with Scotland keeping the pound. Why make an issue out of it? David Cameron worried much, what's he worried about? Let Scotland keep the pound as it as much belongs to Scotland as it does to NI, Wales or England. Salmond was right to use the term 'bully' because it drew attention to the fact that all three parties were not willing to negotiate.

PigletJohn Thu 20-Feb-14 17:00:29

If the people who live in England are given their independence, it will be up to them to decide if they want to form a currency union with another independent country.

It appears that they don't want to. Nobody can make them. The offer is not on the table.

flatpackhamster Thu 20-Feb-14 17:16:33

IrnBruTheNoo

Oh dear, FannyFifer. I feel you're being ganged up on on this thread....there's not enough Yes! supporters on the thread to balance it out with regards to the currency union being discussed..

I'm a Yes! supporter (still need to get a badge and wear it with pride) and cannot see the issue with Scotland keeping the pound. Why make an issue out of it? David Cameron worried much, what's he worried about? Let Scotland keep the pound as it as much belongs to Scotland as it does to NI, Wales or England. Salmond was right to use the term 'bully' because it drew attention to the fact that all three parties were not willing to negotiate.

You - like so many 'yes' supporters - are either deliberately or accidentally conflating two different things.

The first is Scotland using £Sterling as legal tender in Scotland.

The second is currency union with the UK.

Which are you referring to here?

IrnBruTheNoo Thu 20-Feb-14 17:44:42

Both.

flatpackhamster Thu 20-Feb-14 18:10:40

Well you need to be clear, because the two are very different things. The first is no problem. The second is a ridiculous conceit. Why on earth would the UK want to be burdened with the immense fiscal drag of a socialist welfare state like Scotland? It would be the same problem that the Eurozone has with Greece.

It's bizarre to try to play the victim card by claiming bullying, too. It's as bizarre as the UK demanding Edinburgh, Scotland refusing and the UK claiming it was being bullied.

ReallyTired Thu 20-Feb-14 18:19:26

Ultimately the scots are making the decision whether to be independent rather than the rest of the UK. Rightly so the English, Welsh and Northen Irish have so say in the referdum. If the scots do decide to break away then it is up to the RUk as much as scotland whether we share the pound.

Being indepedent allows the scots to have the socialist policies that their electorate want. The English electorate want less social welfare. Scotland will become a high tax nation where as low tax polices are popular in England. I can't see how it is possible for a high and a low tax nation to share a currency.

IrnBruTheNoo Thu 20-Feb-14 18:30:36

We need a lot of social welfare in Scotland - that's the point! We don't need to be governed from Westminster, it doesn't add up. We need to be making policies in Scotland that relates to the Scottish people, where Holyrood is the hub, not Westminster.

No offence, but unless you live in Scotland you have no idea what issues affect Scottish people in their daily lives.

IrnBruTheNoo Thu 20-Feb-14 18:32:20

"It's as bizarre as the UK demanding Edinburgh, Scotland refusing and the UK claiming it was being bullied."

LOL, it's nothing like it, sorry.

roadwalker Thu 20-Feb-14 18:46:03

Given that Salmond didn't want the pound, it was a mill stone around Scotlands neck, until the euro crash its indicates he doesn't really have a clue what to do
Genuine question, is the rUK better off with or without Scotland

flatpackhamster Thu 20-Feb-14 18:55:30

Message deleted by MNHQ. Here's a link to our Talk Guidelines.

IrnBruTheNoo Thu 20-Feb-14 18:58:04
IrnBruTheNoo Thu 20-Feb-14 19:01:00

Seems like a certain Barroso is back peddling now.

IrnBruTheNoo Thu 20-Feb-14 19:03:19

"Do you 'need' a lot of welfare or is the country just addicted to it? It's the latter."

Have you seen the amount of elderly people in Scotland? You cannot walk far without seeing many! But no, they must be addicted to being OAPs and claiming their pensions, how terrible, they should just die already hmm

PigletJohn Thu 20-Feb-14 19:34:59

Independence cuts both ways.

It's no concern of one independent country how another independent country chooses to govern itself or what social policies it chooses.

Equally, one independent country has no call over whether another independent country wants to enter into a currency union. We have already identified that the people of the UK outside Scotland don't want to enter into a currency union. When and if the time comes, it will be their decision. It won't be up to the government or voters of any other country.

Does anybody seriously believe otherwise?

ReallyTired Thu 20-Feb-14 21:05:25

IrnBruTheNoo

I completely agree with you that scotland needs a lot of social welfare, however it could be argued that their are huge pockets of England who also need welfare. The electorates of England and scotland have very different opinons on how much support the welfare state should give. Afterall the conservatives would never get elected in Scotland because their policies are unpopular with the scots.

Without judge the merits of different economic policies, if scotland takes one approach and England takes a different approach then you are going to get different effects economically. For example if Scotland decided to spend lots of public money on projects then that would boost scottish employment and fuel inflation in scotland. In England where the goverment chooses autersity economy might have far less growth. You could end up with a situation where interest rates need to be raised to curb inflation in scotland, but rising interest rates in England would kill any recovery.

PigletJohn Thu 20-Feb-14 21:28:05

This is not a new problem. When that dreadful Thatcher woman was in power, economic policy was very much driven by the price of houses in London and its nearby surroundings. So interest rates were set to manage mortgage costs and asset price inflation, even though it crushed industry. Union laws and privatisation destroyed the power of labour.

If you have policies designed for one region, but applied to all, you can expect some disasters.

An independent nation should not expect to lash itself to another with different policies.

The path to independence will doubtless have hardships for both the independent countries. They will have to be worked through by both.

It's no use grumbling that a result of being independent is that you have to be, er, independent.

SantanaLopez Thu 20-Feb-14 22:55:32

Seems like a certain Barroso is back peddling now.

Has Barroso made any new claims? The article you linked to simply said SNP MSP says Barroso is wrong.

IrnBruTheNoo Fri 21-Feb-14 10:10:10

It just goes to show that Barroso shouldn't be making wild claims that are inaccurate.

IrnBruTheNoo Fri 21-Feb-14 10:12:01

Scotland can just go ahead and use the £ anyway even if the rest of the UK doesn't agree with it. It would be within the rUK best interests to go along with it as there is plenty of trade that goes on between Scotland and England as it is. There is no point cutting your nose off to spite your face is there.

PigletJohn Fri 21-Feb-14 10:17:52

you are again mixing up the idea of "using a currency that is not your own" and "hoping another independent country will want to form a currency union with you"

You might have your opinion of what would be in the best interests of another independent country; but if it's not your country, you don't get to decide.

IrnBruTheNoo Fri 21-Feb-14 10:21:55

I think we're going round in circles here, so will just leave it as it is considering the majority on this thread are not for independence anyway....

PigletJohn Fri 21-Feb-14 10:29:10

It's up to the people who live in Scotland if they want to be independent, not anyone else.

It's up to the people who live in the rest of the UK if they want to join a currency union, not anyone else.

ReallyTired Fri 21-Feb-14 13:03:21

I am surprised that the scots want to be at the mercy of the bank of england. Why don't the scots want their own currency? They could even put a picture of Alex Samond on thier ten scotz notes.

meditrina Fri 21-Feb-14 13:08:38

I am perfectly happy with the idea of Scottish independence.

I am not however in favour of the continuing UK joining any currency union. It would make more sense to join the euro (as far more trade is with Eurozone than Scotland) if one is looking at the 'cost' of UK continuing with sterling. And that has been rejected too.

mellicauli Fri 21-Feb-14 13:24:41

We thought Alex Salmond was saying: UK, I want a divorce. But I'd like to carry on with the joint account arrangement, if that's OK with you.

It is a funny union though. Where one side threatens to divorce year after year but never does. And the opinion of the other side is never asked and always taken for granted.

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