Increasingly annoyed seeing separatists completely misunderstanding Scotland’s currency options in the unlikely event we vote to separate;
All UK Parties and, effectively (even though Mark Carney is officially on the fence), the BOE have ruled out a straightforward currency union. (Carneys ambivalence is very well crafted, read his transcripts). The Permanent Secretary of the treasury Sir Nicholas Macpherson wrote an open letter, unprecedented, warning against currency union of the cUK with a newly independent Scotland (more than likely outside the EU for years).
Right now all UK parties are saying a currency union is definitely not available, and the Nationalists are saying this is a bluff. Even today a “leak” said a currency union is possible, but Trident would have to stay as part if the negotiations.
The £ belongs to the union, to the UK. Separation/secession without ceding sovereignty by tough UK negotiation will mean iScotland not having a currency backed by the BOE and having to use an available currency or create our own.
Of course we can use the £ Sterling without a formal currency union, there is no doubting that, we can use any currency in the world we want subject to availability, it’s just we will not have a recognised lender of last resort, we can’t print the £ (or any other non Scottish currency) and we would have absolutely ZERO fiscal control.
Carney has gone out of his way to be gentle with us, in essence saying it would be “difficult” to negotiate currency union and up to politicians to decide and negotiate any terms and obligations.
We can of course use the Euro if we want (yuk) but the above limitations apply.
As for joining the EU that is years away and a condition would be adopting the Euro on admission.
Salmond has said no CU may mean reneging on debt (rUK has publically stated it will honour it internationally for us). So if he can’t negotiate one, this means our credit rating will evaporate, higher taxes, mortgages and debt repayments while revenues fall, good eh? Salmond saw the underwriting of Scottish debt as a cUK own goal, how wrong he is.
A new currency would work in Scotland, but be very weak internationally post separation negotiations. As rUK has already taken credit for debt responsibility, it won’t be counted twice by financial markets.
So, any currency union we enter will involve us ceding almost total fiscal control to a foreign state (some weird independence that). Using another countries currency exposes us to untold dangers, not the least of which would be currency exchange issues with cUK, our biggest trading partner. It should be obvious by now why serious business is anti separation.
Whichever currency path we choose we will have to protect our international credit rating, constraining borrowing and spending, putting our financial future in the hands, perhaps of people not as kindly disposed to us, as the rUK.
If we expect them to play nice if we separate, you are mad. This is a crucial life changing event, please see sense and #voteno
Update 16/5/14 It’s still no to currency union http://www.bbc.co.uk/news/uk-scotland-scotland-politics-27405129