“Are the Scots more the Greeks or Germans? I couldn’t possibly say.”

“It’s starting”, is it?  [Whatever ‘it’ is – Ed].  The Guardian’s Michael White spots a flaw in Alex Salmond’s cunning plan.  [Does it involve turnips? – Ed]  Neeps.  From the Guardian Politics Blog

The SNP and the Tory Eurosceptics have much in common – and I don’t mean that as a compliment, decent people though so many of them are. The obvious tactic they currently share, apart from national chauvinism as a panacea for deeper problems, is the three-choice referendum option to gloss over electoral weakness and the important obfuscation that the SNP proposes.

What’s that, you ask? If you’re English, you probably haven’t noticed, and if you’re Scottish the first minister won’t have drawn the problem to your attention in his stirring speech to the SNP’s annual conference in Inverness on Saturday. But today’s “wake up, Britain” editorial in the Guardian has spotted the problem, I’m glad to see.

It is this. In proposing that an independent Scotland would retain sterling until it was ready to join the eurozone (that assumes there will still be a eurozone), the SNP is asking Scots to support a monetary union with England (that assumes the English would want one) without a fiscal union.

That is precisely the model that has got the austere Germans and the laid-back Greeks – not to mention most of the zone’s 17 member states – angry with each other in a crisis far from being resolved.

Read the whole thing.

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  • FuturePhysicist

    What have Andorra, Monaco, Bosnia-Herzegovina, Kosovo, the Vatican, San Marino, Switzerland got in common?

    They are all non EU but have currencies pegged to some degree to the Euro.

    Basically the SNP are suggesting the route that the Irish Free State took having 1 punt for 1 pound sterling, lots of countries that have emerged from independence have taken this route.

  • FuturePhysicist

    Re: Switzerland

    http://mostlyeconomics.wordpress.com/2011/09/06/swiss-franc-gets-pegged-to-euro/

    This probably adds Liechtenstein to the list too.

  • Dewi

    “It’s starting”, is it? [Whatever ‘it’ is – Ed].”

    Sorry should have pasted a better quote from Robertson:

    “Support for independence has moved into the lead and the people of Scotland want to be persuaded. Scotland’s independence campaign starts now.”

    “Scotland, it’s starting.””

  • Pete Baker

    FP

    “Basically the SNP are suggesting the route that the Irish Free State took…”

    Not if they retain sterling.

    All the examples you have suggested have, or had, the ability to adopt independent policies, affecting their own currency alone, in order to maintain the equivalence with an external pegged currency.

    An autonomous Scotland retaining sterling would not be able to do that. That’s the “devo max” third way option under discussion.

    As Michael White points out

    [It] is precisely the model that has got the austere Germans and the laid-back Greeks – not to mention most of the zone’s 17 member states – angry with each other in a crisis far from being resolved.

  • Barnshee

    The reasons for the UK existence (Protection of the State/monarchy etc from backstabbing bastards in Scotland and Ireland mostly) are no more –this is a golden opportunity for England to begin saying ( as politely as possible ) Fuck off and take your problems with you
    PS raise you own taxes

  • Angus McLellan

    “That’s the “devo max” third way option under discussion.”

    Not really. FP had it right.

    Under “devo max” the currency situation would be unchanged. The proposed situation in an independent Scotland would be analogous to that in Ireland before 1979 and the EMS.

    What isn’t entirely clear is whether the model under consideration is the pre-1927/8 Irish situation where private bank notes and Sterling were in circulation – not much change then – or something like the post-1927/8 situation when the Free State Pound and later the Irish Pound were joined to Sterling at the hip. It doesn’t seem ridiculous to think that an independent Scotland might well follow the same trajectory as Ireland, only a bit faster. So no change to start with, then a rigid peg, then an “EMS”.

  • Let’s be honest: whatever the Morgan treasure (all £900k) the SNP has up its sleeve, in the end it’ll come down to the politics of the moment.

    Which is why I reckon the SNP may be missing their opportunity: a confluence of Wee Eck as front man and the burn-out of the UK economy comes once in a generation.

    So: it’ll be Independence Lite.

    End of story.

    Quit fussin’.