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If Scottish independence was based on speaking another language, cultural incompatibility, or if it was based on toppling the monarchy, I would support independence. But the debate hinges on economic predictions and statistic; on convincing people that independence will somehow make Scotland economically more viable than it is today. This would be all fine and well if the pro-independence faction was arguing for more fiscal responsibility, fostering a high-tech industry and innovation. Instead they want to use oil reserves to prop up the economy ad large government. This is not the recipe for a successful economy.
For example, I would consider supporting Québec independence because Québec separatists have three very valid grievances: a) is a conquered country that speaks another language, b) has a very different culture, c) the separatists want a republic rather than a monarchy. If Scotland fulfilled these criteria, I would support her independence; but instead Scottish independence fulfills none of these criteria, and bases independence on weak economic enticements and what amounts to a regional identity. Scotland is not a conquered country, speaks the same language, has an extremely similar culture, and wants to keep the monarchy. So then what's the point of independence?
Even in the unlikely scenario where the Scottish populace votes for independence, the celebration will be short lived as the population finds that the new government is no different than what they had before. Scotland will become a more irrelevant and poorer than it currently is, and there will be a huge population of unhappy Scots saying "I told you this was a bad idea".
You're gonna be in big trouble if any Canadians (from outside Quebec) come on here!
I really don't understand how the pro independence lobby think that it's going to be a cake walk obtaining membership of the EU.
Last November on BBC's World at One, the president of the European commission, Jose Manuel Barroso said that, and I quote "Scotland would have to re-apply for membership of the EU". He also said that "All other member states would have to give their consent" That includes Spain.
In the Scotsman newspaper Last November, Spanish Prime Minister Mariano Rajoy said that, "If part of a member state should become independent, it would be left out of the European Union, and it would be good for citizens (in the EU) and Scots to know that".
You seem to be of the opinion that the Nationalist threat of not taking on their share of the debt is a credible one. I disagree. The consequences of 1) not getting a share of assets, 2) potential retaliation by rUK and 3) consequences in the international bond markets are just too great.
1) The gold reserves are worth £150Bn of which Scotland would only ever get a population share. Most military hardware Scotland would not need. Could you please define the value to Scotland of these 'assets'? You might want to consider in your answer that you've just about defined everything else as an "institution". (Unless you think we'll be haggling for 8.4% share of RBS. Edit: Just realised I forgot the 8.4% of the Falkland Islands we'll miss out on.)
2) Potential retaliation by the rUK who are desperate not to have to move trident off the Gareloch by March 2016? Retaliation goes both ways.
3) Consequences of a higher interest rate for a country which has no outstanding debt and a relatively smaller budget deficit? (Are you quite serious?)
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Anyway, now that it seems that the ability to use the pound is slowly slipping away, what is Plan B? The Euro or a new currency?
You missed out the most likely option, which is that Scotland just continues to use the pound anyway. It could do that in one of two ways, either by creating a separate currency pegged to the pound, or by literally just using the pound as the official currency. Either way would require the creation of a Scottish Central Bank to act as lender of last resort for Scottish banks, but both have their advantages/disadvantages.
To join the Euro, Scotland would need to have its own currency and (amongst other things) join the exchange rate mechanism for two years; so that wouldn't be an immediate option on independence.
Eoin
Last edited by Eoin (pronounced Owen); 02-12-2014 at 10:22 AM..
I really don't understand how the pro independence lobby think that it's going to be a cake walk obtaining membership of the EU.
Last November on BBC's World at One, the president of the European commission, Jose Manuel Barroso said that, and I quote "Scotland would have to re-apply for membership of the EU". He also said that "All other member states would have to give their consent" That includes Spain.
In the Scotsman newspaper Last November, Spanish Prime Minister Mariano Rajoy said that, "If part of a member state should become independent, it would be left out of the European Union, and it would be good for citizens (in the EU) and Scots to know that".
Scotland's accession to the EU will be a formality. The questions are over which terms Scotland will accede to the EU, and those will be a matter of negotiation. The key questions are the UK's rebate, Schengen, and the Euro. In my own opinion, an independent Scotland wouldn't be required to join Schengen because doing so would have the diametrically opposite effect to the intention of Schengen, but it may be required to join the Euro (particularly if it's not in a currency union) and it will almost certainly lose the UK's rebate.
The comments of the Spanish Prime Minister have to be seen in the context of Catalonia, which is threatening to have its own referendum on independence (against the will of the Spanish Government) in November this year. The Spanish foreign minister has already confirmed that Spain would not veto Scotland's membership if it becomes independent as the result of mutual agreement between Scotland and the UK. (Which if it happens will be the case.)
Scotland's accession to the EU will be a formality. The questions are over which terms Scotland will accede to the EU, and those will be a matter of negotiation. The key questions are the UK's rebate, Schengen, and the Euro. In my own opinion, an independent Scotland wouldn't be required to join Schengen because doing so would have the diametrically opposite effect to the intention of Schengen, but it may be required to join the Euro (particularly if it's not in a currency union) and it will almost certainly lose the UK's rebate.
The comments of the Spanish Prime Minister have to be seen in the context of Catalonia, which is threatening to have its own referendum on independence (against the will of the Spanish Government) in November this year. The Spanish foreign minister has already confirmed that Spain would not veto Scotland's membership if it becomes independent as the result of mutual agreement between Scotland and the UK. (Which if it happens will be the case.)
Eoin
Can you point us to any authoritative statement which supports your point of view as opposed to statements from the European Commission and the Spanish which support an opposite conclusion?
1) The gold reserves are worth £150Bn of which Scotland would only ever get a population share. Most military hardware Scotland would not need. Could you please define the value to Scotland of these 'assets'? You might want to consider in your answer that you've just about defined everything else as an "institution". (Unless you think we'll be haggling for 8.4% share of RBS. Edit: Just realised I forgot the 8.4% of the Falkland Islands we'll miss out on.)
2) Potential retaliation by the rUK who are desperate not to have to move trident off the Gareloch by March 2016? Retaliation goes both ways.
3) Consequences of a higher interest rate for a country which has no outstanding debt and a relatively smaller budget deficit? (Are you quite serious?)
You missed out the most likely option, which is that Scotland just continues to use the pound anyway. It could do that in one of two ways, either by creating a separate currency pegged to the pound, or by literally just using the pound as the official currency. Either way would require the creation of a Scottish Central Bank to act as lender of last resort for Scottish banks, but both have their advantages/disadvantages.
To join the Euro, Scotland would need to have its own currency and (amongst other things) join the exchange rate mechanism for two years; so that wouldn't be an immediate option on independence.
Eoin
You seem to be hanging your hat on Scotland reneging on her share of the debt. Frankly, the default threat is absurd. Anyone who wants to look at what happens when the markets get even a sniff that a country will default just needs to look at Greece, who had interest rates on one year debt go ABOVE 400% at one point!! Just think what that would do to the cost of your mortgage, the cost of borrowing for your local business, the effect it would have on your taxes in order to service that debt, as well as the public spending cuts that would be needed.
Yes, Scotland could continue to use the pound unofficially. But then she would have absolutely no influence over things like monetary policy or interest rates.
You seem to be hanging your hat on Scotland reneging on her share of the debt. Frankly, the default threat is absurd. Anyone who wants to look at what happens when the markets get even a sniff that a country will default just needs to look at Greece, who had interest rates on one year debt go ABOVE 400% at one point!! Just think what that would do to the cost of your mortgage, the cost of borrowing for your local business, the effect it would have on your taxes in order to service that debt, as well as the public spending cuts that would be needed.
Yes, Scotland could continue to use the pound unofficially. But then she would have absolutely no influence over things like monetary policy or interest rates.
I don't disagree with some of the points you have been making, but Scotland is not Greece. Greece is an appaling example to use when comparing the debt situations of other countries. That is not to say that Scotland would never be like Greece, more that Greece is an unusuallly bad example.
I think it is in all the UK nations interests to maintain the union. It makes more sense economically and politically. I think those who wish to leave the union are basing their opinions more on feelings that facts..
Can you point us to any authoritative statement which supports your point of view as opposed to statements from the European Commission and the Spanish which support an opposite conclusion?
Please enlighten me as to what the EC or Spain has said, which contradicts anything that I have said, so that I may understand your question. I'm (overly) familiar with what both parties have said, and I haven't presented anything like an opposing view. (There is actually scope for disagreeing with everything Manuel Barrosso has said and Spain have said, based on Scotland entering the EU via an Article 48 amendment; but I've deliberately been non-controversial and argued my case entirely consistently with their positions.)
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You seem to be hanging your hat on Scotland reneging on her share of the debt. Frankly, the default threat is absurd. Anyone who wants to look at what happens when the markets get even a sniff that a country will default just needs to look at Greece, who had interest rates on one year debt go ABOVE 400% at one point!! Just think what that would do to the cost of your mortgage, the cost of borrowing for your local business, the effect it would have on your taxes in order to service that debt, as well as the public spending cuts that would be needed.
Jaggy, for a man who is purporting to tell me how international markets will react to X or Y, you're demonstrating some fairly basic gaps in understanding about global finance. When you talk of interest rates of 400%, that was on the sale of Greek Government bonds at the point the Greek Government was imminently defaulting on its obligations. The bond rate is the rate at which National Governments have to pay to raise money on international money markets. As you should know, Greece is a member of the Euro, and the interest rate payable by Greek consumers and businesses is a completely different concept altogether. The interest rates for the Euro currency (which Greece is a member of) is set by the European Central Bank at the same rate for the whole Eurozone, and it hasn't risen above 1% for two years.
As to the rate an independent Scotland would have to pay on Government Bonds, it would depend solely on the perception of investors as to Scotland's willingness and ability to pay. The ability of Scotland to pay on a national debt of zero is not in question, unless of course you are completely insane. To put this into context, you'd be talking about the 6th richest country in the world (on a per capita basis), starting off with a national debt of ZERO! No country on earth (and I mean NOT ONE) would be in a better position to make payments on any trivial amounts of debt Scotland could run up in the first years of independence.
The extent to which Scotland's refusal to assume responsibility for the UK's national debt might spook investors is less certain, but what you must understand, is that Scotland is incapable of defaulting on rUK's national debt because Scotland is not the borrower. The rUK Government is the debtor, and it has committed to honour all debts accrued by the UK regardless of the outcome of independence negotiations. In no legal sense would Scotland have defaulted on anything.
The crucial point here, and I'm going to made it to you again, is that an independent Scotland has no legal obligation to pay a single penny toward the rUK's national debt, unless that is agreed upon in negotiations pre-independence. Scotland does not owe anything to anyone. It is not possible to speak of an independent Scotland defaulting because it has never had any debt to default on. The offer from the Yes campaign to assume a proportion of the rUK's debts is because it's a hefty bargaining chip for Scotland, and because it is the right and decent thing to do. I back them entirely in offering to assume a fair proportion of the debt, because it would be morally wrong to leave taxpayers in the rUK footing a bill which Scotland was complicit in running up. However, if the Chancellor wishes to trample on that good faith by restricting Scotland's access to a currency that Scotland has contributed to for centuries; then he alone is responsible for the consequences. He cannot have his cake and eat it.
Finally, the UK's national debt is £1.6 Trillion. A population share (8.4%) of that sum would be £134 Billion. Even if we took your most ridiculous assertion that Scotland might pay the same bond rates as Greece, (which is 7.9%), it would still take Scotland 25 years of consistent overspending by consecutive Scottish Governments to even bring Scotland back to the level of debt it would inherit automatically from the UK, were it to take a population share of the debt! Your pre-conceptions about the effect on Scotland of refusing to assume the debt are without basis in my opinion. There is a strong argument that Scotland should inherit its fair share of the debt, but it is a moral one, not a financial or legal one.
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Yes, Scotland could continue to use the pound unofficially. But then she would have absolutely no influence over things like monetary policy or interest rates.
You know, next time you're in Glasgow I insist on buying you a pint. But see for somebody who's in a serious discussion, you're a bloody nuisance! We've spent 3 posts going back and forth discussing Scotland in a currency union, during which you tried at every turn to say that an independent Scotland would have its fiscal and monetary policies "imposed" upon it "by London" under such a setup. You're now criticising the idea of using Sterling as an unofficial currency because it would leave Scotland no control over monetary policy. Which is it?
You are of course correct that using Sterling as an unofficial currency would leave Scotland with no control over monetary policy. What it's worth bearing in mind is that the only control Westminster can exert over monetary policy is that the Chancellor nominates 4 independent economists to the Monetary Policy Committee. The Committee has 9 members, so even if the 'independent economists' nominated by the Chancellor are entirely under his thumb, they still don't have a casting vote. Using an unofficial currency in lieu of creating a separate currency is a perfectly viable option, but it is not as good as a currency union.
The disadvantage to Scotland of having its own currency, is that a Scottish currency would be a particularly "hard" currency. That is to say, that with north sea oil and gas revenues, the value of a Scottish currency would be extremely high. That would be a very bad thing for manufacturers, as it makes their exports relatively expensive. The ideal solution for Scotland would be to join the Euro, because then Scottish businesses could compete effectively with the continent, but the disadvantage is that it would require Scotland to join the exchange rate mechanism for 2 years before entry - during which time Scotland would need to have its own currency, and manufacturers would struggle in the interim. That is the real reason that remaining part of Sterling is the best solution for Scotland, and the best way of doing that is as part of a currency union.
I think those who wish to leave the union are basing their opinions more on feelings that facts..
I was about to disagree with you, but in typing my response it became clear that you are correct.
There are very few 'facts' being made available to people, part of that is due to obfuscation by both the Yes and No camps, and the decision not to pre-negotiate terms of separation. However, the main reason is that even in principle, the factual answers to the questions people really want to know about cannot be provided.
If you asked an economist in 1975 what the UK would look like in 1985, they would likely have been completely wrong. From 1995 to 2005 they'd be wrong. If you asked in 2005 about 2015 they would likely be spectacularly wrong. The only answer you are ever going to get to a question like that is going to be a gut instinct by that economist which reflects his or her own biases and is supported by evidence they have hand picked to suit that bias. It's not that they're being dis-honest, and I've no doubt they'd be giving their honest opinion; but they are unable to make accurate predictions about future events that involve so many known unknowns and unknown unknowns to be meaningless.
The same goes for an independent Scotland in 2024. Nobody can pretend to know what it would look like if they're honest with themselves. By the same token, nobody could tell you what Scotland as part of the union would look like in 2024. Anybody who thinks that they can is deluding themselves.
At the end of the day, people are going to make up their minds based on gut instinct regardless of which side they vote for.
I was about to disagree with you, but in typing my response it became clear that you are correct.
There are very few 'facts' being made available to people, part of that is due to obfuscation by both the Yes and No camps, and the decision not to pre-negotiate terms of separation. However, the main reason is that even in principle, the factual answers to the questions people really want to know about cannot be provided.
If you asked an economist in 1975 what the UK would look like in 1985, they would likely have been completely wrong. From 1995 to 2005 they'd be wrong. If you asked in 2005 about 2015 they would likely be spectacularly wrong. The only answer you are ever going to get to a question like that is going to be a gut instinct by that economist which reflects his or her own biases and is supported by evidence they have hand picked to suit that bias. It's not that they're being dis-honest, and I've no doubt they'd be giving their honest opinion; but they are unable to make accurate predictions about future events that involve so many known unknowns and unknown unknowns to be meaningless.
The same goes for an independent Scotland in 2024. Nobody can pretend to know what it would look like if they're honest with themselves. By the same token, nobody could tell you what Scotland as part of the union would look like in 2024. Anybody who thinks that they can is deluding themselves.
At the end of the day, people are going to make up their minds based on gut instinct regardless of which side they vote for.
Good points. But, there are many ecomnoists out there that predicted a huge crash, and the consequences of bubbles (in housing through 2007), and now within the financial markets especially in the US.
I think there are some simple questions around Scotland's future position if they were to become independent that should be able to be answered i.e currency, head of state, military, oil ownership, EU membership/relationship - that are more policy issues than economics. I think its also realistic to speculate somewhat accurstely about how revenue would be generated to pay for social services, where and how jobs would be created and sustained, and Scotland's relationship with the rest of the Kingdom.
When you weigh it all up, I'm not sure that there are real benefits to Scotland leaving the union apart from just being independent! That is all nice and everything but how would long term utility really be created and sustained in a more efficient way than being part of the UK? If that is a question that cannot be answered in a clear and concise manner then you lose the argument to become independent IMO.
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