Of Course Scotland Could Use The Pound After Independence
It’s a bit off my having to agree with hte Wee Eck here but it is true all the same that Alex Salmond is correct about a newly independent Scotland being able to continue using the pound sterling.
Alex Salmond has given his clearest indication yet that he would want an independent Scotland to keep the pound, even without a formal currency pact, after stating “we are keeping it, come what may”.
The first minister insisted, in an article for the Sunday Herald, that “there is literally nothing anyone can do to stop an independent Scotland using sterling, which is an international tradeable currency”.
Writing five days after a bruising encounter with Alistair Darling in STV’s live debate on independence, Salmond insisted that the UK parties were bluffing when they repeatedly ruled out a currency pact after independence.
Salmond argued there was clear economic and political logic for a formal agreement to share sterling and the Bank of England, as he tried to persuade voters in Scotland that he was correct to keep fighting for a deal. It would avoid UK businesses paying extra transaction costs to trade in Scotland, mean Scotland would pay its share of the national debt and allow UK politicians to honour the democratic will of Scottish voters who had backed independence, he wrote.
Whether it’s actually a good idea or not is another matter entirely. A newly independent Scotland (and I say as a proud Englishman, goodbye and don’t bother to write) has three choices. Their own currency, the euro or the pound. and the point is that while all of them have their own plusses and minuses they are all actually possible.
With respect to the pound it doesn’t matter a toss what the Wallahs in London think about it. You can’t actually stop other people from using your currency. As the US has found out when Ecuador and Panama ( and innumerable drug dealers) decided to use the dollar as their legal currency.
If Salmond wants Scotland to use the pound he’ll be able to make that happen.
Posted: 12th, August 2014 | In: Money Comment | TrackBack | Permalink
