MarkA
Head Pro
So tell me if Scotland wants independence from the UK - why would Scotland think that there would still be any reason to have Currency union? Independence is Independence, you cant pick and chose the nice bits!
Scottish independence
- Thread starter gryffindor
- Start date
SwingsitlikeHogan
Major Champion
There are the huge practical benefits to the rUK in having monetary union with Scotland that the government of the rUK and the Bank of England would recognise. A Westminster government might have difficulty swallowing it - but it would happen.
Adi2Dassler
Journeyman Pro
Because it would make sense to both countries?They'll not say it, but rUK would want it too happen too.
D
Deleted member 18588
Guest
No we would not and nor would any of the leading political parties. Certainly would not make sense for the UK to have its currency linked to that of a small independent nation.
MegaSteve
Tour Winner
That it may... But, if I wanted independence then my first requirement would be total control over my own purse strings... Which is why I remain confused over Scotland's desire to beholding to others...
SwingsitlikeHogan
Major Champion
Indeed - Westminster and the rUK electorate might not like the idea, but the practicalities (and maybe also the impracticalities of there not being) currency union would mean that it would happen.
MarkA
Head Pro
Please feel free to name them , as I cant see one having to underwrite a small independent nation
D
Deleted member 18588
Guest
You don't half kid yourself in your desperation for Scottish independence, but you make zero allowance for the realities whilst inflating the importance of an independent Scotland to the UK. (please do not refer to rUK as after a YES vote Scotland would not be any part of this country)
Provide a crutch for Scottish financial institutions by BoE being lender of last resort whilst having no control over the Scottish economy!!!
Not even Osborne or Balls are that daft.
SwingsitlikeHogan
Major Champion
I'm not desperate for independence and it's nothing to do with any potential rUK dependency on Scotland (btw - if you follow the debate in Scotland you will find the rUK is the commonly adopted shorthand for United Kingdom without Scotland i.e. rest of UK or rump UK
). I'm just trying to see through disinformation and assertions of what absolutely would and absolutely would not happen following a YES. And it isn't a case of anyone being daft or sensible - it would be based upon what would realistically and pragmatically be the most appropriate thing to do.
D
Deleted member 18588
Guest
I'm not desperate for independence and it's nothing to do with any potential rUK dependency on Scotland (btw - if you follow the debate in Scotland you will find the rUK is the commonly adopted shorthand for United Kingdom without Scotland i.e. rest of UK or rump UK
And it isn't a case of anyone being daft or sensible - it would be based upon what would realistically and pragmatically be the most appropriate thing to do.
In which case answer the question.
How can it be appropriate, realistic or pragmatic for the BoE to provide support as a lender of last resort to financial institutions based in another country over whose fiscal policy the UK Government would have no control?
Not only does it not make political sense it does not make economic sense.
Doon frae Troon
Ryder Cup Winner
Mickie..AGAIN it is all down to negotiation.
If Scotland have to settle for the Euro as a second choice I am not sure if the rUK can take a sterling loss of 8.4% when we convert.
Would that not be a bit like cutting off your nose to spite your face.
We would prefer to keep the pound and I am sure that rUK would like to keep the VALUE of the pound.
D
Deleted member 18588
Guest
Would you like to explain why sterling would be devalued by 8.4% in the event of a YES vote.
I see no reason to suspect that this would be the case and what makes you so certain that Scotland would be accepted into the Eurozone. Certainly the ECB have not confirmed that.
Doon frae Troon
Ryder Cup Winner
I did not say it would be devalued, that will only happen if rUK decide they don't want our share of the money invested in the UK bank.
D
Deleted member 18588
Guest
Still would not result in a devaluation of sterling on currency markets. Exchange rates are determined by many factors such as interest rates and economic outlook.
In addition stability tends to be a more attractive characteristic for a currency.
Old Skier
Tour Winner
WTF is rUK
NWJocko
Tour Winner
Re Currency, would the pro independents not prefer to have control over their own currency/interest rates etc?
If interest rates are controlled by the BoE then, in theory, Scotland could end up being limited in the event of a "Scottish" recession in the future? E.g. Greece etc having no ability to devalue their currency.
Obviously being in the Euro wouldn't exactly help this either.....
If interest rates are controlled by the BoE then, in theory, Scotland could end up being limited in the event of a "Scottish" recession in the future? E.g. Greece etc having no ability to devalue their currency.
Obviously being in the Euro wouldn't exactly help this either.....
SwingsitlikeHogan
Major Champion
I did explain that 'rUK' is the generally accepted shorthand being used in Scotland for the 'rest of the UK' i.e. UK without Scotland - but you know that?
SwingsitlikeHogan
Major Champion
...which might well happen over time. But following a YES there will be 'forever' for the economies of Scotland and rUK to evolve to the point that this could be appropriate and desirable. But in the first instance, and at least in the short term (which is in years), it would be pragmatic for both Scotland and the rUK to have currency union.
NWJocko
Tour Winner
This is what confuses me a little....
One of the main motivations appears to be being freed from the "rule" of Westminster/UK policy.
However, Scotland would be happy to have fiscal policy freedom severely limited by interest rate and monetary policy decide by the BoE? Doesn't seem to make sense to me.....
A lot of the argument seems to be (rightly or wrongly) how financially successful an independent Scotland would be, why on earth wouldn't you want to control the (perceived) positive impact on Scotland's P&L through fiscal/monetary policy?
SwingsitlikeHogan
Major Champion
Because these things will take time to evolve and to be negotiated and worked out - and evolve they will. But there will be plenty of time for tghese things to be sorted out. Forever is a long time - but they won't take forever - just time. You seem to suggest that there should be an instant fix or solution - and immediate change to a new 'steady state'. Nothing really changes like that.
When you introduce a step change into a stable system where all 'states' defining the system have relatively low levels of uncertainty, all the states go into a transitional phase with associated higher levels of uncertainty. Over time the states defining the system move to their new steady-state position and as they do their uncertainty reduces until the system reaches stability and relatively strong against further disruptive inputs. But state dynamics and uncertainty are time variable - and that is all that we will have with Scotland after a YES vote.
And at that point a change from currency union may be appropriate without too much disruption on either economy.
