Osbourne says no to currency union.

You are missing better access for MTBers Ben !!!

bencooper – Member
Ach, you’re right. I give up. Scotland may have a better GDP per head than the rest of the UK, lower unemployment, and much larger natural reserves, but it’s all too difficult for us.

But you don’t have a currency….. I’m no expert but I think that might be important for the economy… I wonder how much your GDP per a head could could fall…..

Ach, you’re right. I give up. Scotland may have a better GDP per head than the rest of the UK, lower unemployment, and much larger natural reserves, but it’s all too difficult for us.

No ones saying that Scotland couldn’t be very successful being independent.

What they are saying is you cant use the pound to do so.

If you want to be independent, why still have close links to the rUK by having the BoE run your Monetary policy. Surely you want to control that yourself, rather than being told what to do by London?

Would it be churlish to quote JM Keynes?

He who controls the currency, controls the country

When you put it like that, I can’t imagine why anybody is worrying about stuff as trivial as which currency to use.

teamhurtmore – Member
Would it be churlish to quote JM Keynes?

That’s why many of us are happy to see no currency union.

@bencooper – I don’t think you want Scotland to turn out like Iceland financially. Scotland doesn’t have the scale to stand alone on a variety of fronts but most importantly economically and financially. If she becomes independent she will have to join the euro. There is no way an independent Scotland could have a credible central bank, the country is just too small.

In addition the administrative infrastructure that Scotland would have to duplicate as an independent country would be a huge burden financially on what is a relatively small population and tax base. Independence would be a huge financial bonus for the politicians.

The notion that the Bank of England has a huge pile of assets to which Scotland could take a share is incorrect. The strength of the BoE comes from the fact it’s supported by the UK economy and tax base. Scotland cannot walk away without a share of the debt and they know it, the UK would not allow them to become independent on that basis, it is not a unilateral decision for Scotland to make.

It’s a pity financially that Scotland didn’t have this referendum some time ago as the UK’s two largest financial failures in the credit crises where RBS and HBOS. That’s a lesson for Scotland in how “wannabe” institutions tried to play in the big leagues and took too many risks and a real beating.

Ach, you’re right. I give up. Scotland may have a better GDP per head than the rest of the UK, lower unemployment, and much larger natural reserves, but it’s all too difficult for us

Ah good, so you’ve realised how good you’ve got whilst being part of the UK, glad that’s settled then.

Chew
No ones saying that Scotland couldn’t be very successful being independent.

Actually I’m saying that. It would be too small a country.

When you put it like that, I can’t imagine why anybody is worrying about stuff as trivial as which currency to use.

Absolutely. So, if you choose to leave, take your share of the fiscal responsibilities (up and down!) and feel free to set up your own currency. Given how rosy it sounds economically, I’ll wager it’ll overtake the dollar or RMB as the world’s leading currency very soon. 😉

The FT editorial sums it all up pretty well today

epicyclo – Member
teamhurtmore – Member
Would it be churlish to quote JM Keynes?
That’s why many of us are happy to see no currency union.

And for those of you who are honest about this – full respect.

Scotland may have a better GDP per head than the rest of the UK, lower unemployment, and much larger natural reserves

If that were truly the case, why on earth would you want to keep Sterling like a millstone hung around your neck?

It would be interesting if this was reversed. Can you imagine the stooshie if Osborne had said: “in the event of independence, Scotland has to agree to currency union.”

Can you imagine the stooshie if Osborne had said: “in the event of independence, Scotland has to agree to currency union.”

You might be on to something there:

Chew
No ones saying that Scotland couldn’t be very successful being independent.

Actually I’m saying that. It would be too small a country.

I don’t agree, despite my previous posts I do think that Scotland could make it as an independent country . . . . . . eventually.

The reality I think for anyone tempted to vote YES though is not to expect a smooth transition, and certainly don’t believe what the SNP would like you to believe in their White Paper.

Scotland’s independence will cause huge internal turmoil, a potential large temporary loss of GDP, taking on a staggering amount of debt to restructure, a Scottish internal power struggle, a huge amount of uncertainty, potential loss of external investment and confidence, plenty of currency and financial problems etc, etc.

To add that historically, uncertainty and turmoil in any country/economy normally has the knock on effect of the rich getting richer, and the weak getting trampled on.

This will all be resolved though with enough time. But it’s not going to be all rosy in a year or two – it will take at least a generation for things to settle down, a generation before the country is truly stable.

So does the Scottish population have the stomach to sacrifice the comfort and stability in their own lives, to put their own lives on hold for future generations and the greater long term cause?

Rebel +1

There is plenty of evidence to support Scotland’s ability to succeed as an independent country.

Exchange rates can vary, but probably not all that much and not quickly. £/€ hasn’t shifted anything worth bothering about for years.

A 9c swing from£1 =€1.24 to £1=€1.15, Oct ’12 to Feb ’13 (nearly did for my employer last year. The rate has gone up to £1=€1.21 a couple of weeks back and dropped back a couple of cents since then.

You may want to rethink that.

(We’re too small to forward buy options for clarity).

It’s a pity financially that Scotland didn’t have this referendum some time ago as the UK’s two largest financial failures in the credit crises where RBS and HBOS. That’s a lesson for Scotland in how “wannabe” institutions tried to play in the big leagues and took too many risks and a real beating.

Exactly, during the crisis the Bank of England issued guarantees of around £200billion (Yes, Billion) in respect of RBS. That is almost double Scotland’s GDP for a whole year.

If Scotland goes Independent, and if they retain the pound, without the Bank of England acting as guarantor (Lender of Last Resort) then the financial sector will relocate, probably to London. How could they not?

Wee eck’s language – three Bs BS aside! – is quite telling.

So this week we have gone from,

Early in the week: UK parties have not ruled out the pound = “proof that Scotland WOULD keep the pound.”
Yesterday: UK parties rule out the pound – “bullies”
Today: “err, the Scottish people do have other options”

True but the Fiscal Commission, whose advice he is relying on, examined different options (but crucially and sensibly ruled out the panama solution!) but only gave him one plan. At the moment, he had no plan C. Hence Stiller’s comments.

And we haven’t even started on pensions and defence yet!

So the Scots are meant to take a risk on this chancer. Amazing, we all deserve better! 😉

RBS and HBOS are not ‘Scottish’ banks. They are very much huge multinationals that happen to have Scotland in their name.

As for Iceland, at least they are doing something about about the **** who **** up and throwing a load of them up in front of a court where as the UK just carries on as normal and tells them to reduce their bonuses for a bit.

So were they/are they only Scottish when the sun is shining. Don’t forget wee eck’s profound comments in 2007

We are pledging a light-touch regulation suitable to a Scottish financial sector with its outstanding reputation for probity, as opposed to one like that in the UK, which absorbs huge amounts of management time in ‘gold-plated’ regulation.

And the same guy who pledged his support for one of the great banking M&A disasters of recent times. So the Scots are meant to take a risk on this chancer?

Selective memory,so remind me; was that part of a salmond speech against a Westminster push for tighter regulation of banking? Or were they pulling the wool over every bodies eyes back then?

Surely the point is that no matter how inadequate UK regulation was at the time, Mr S saw even that as excessive and was calling for even less scrutiny than was being applied in 2007…

Junkyard et al, quite interesting summary of the Treasury guarantee given over existing UK debt, which explains the rationale for taking the action:

http://ftalphaville.ft.com/2014/02/14/1770832/how-scotland-really-lost-sterling-union/

Rebel12: I really struggle with points of view like that. I could decide to sell my car and buy a donkey, but it would feel like cutting my nose off to spite my face.

I’m still not convinced that the Scottish independence movement isn’t just 20% old school nationalists with an unpleasant side in bigotry, and 80% people who just hate the Tories?

Your memory is clearer than you make out. The comments speak for themselves.

But when the sun went in, his tone changed didnt it:

The people responsible for RBS…were the London (deliberate choice of words as usual) Treasury (strictly not true, wrong body by when do details matter with wee eck). Unfortunately, they were also responsible for regulating, or at least misregulating, the financial sector as well (coveniently or otherwise leaving our BoE and FSA). I’m afraid people (you know the ones behind the gold-plated regulation that absorbs so much time) have to take responsibility for the past mistakes they made.

Talk about selective memory! So the Scots are meant to take a risk with this chancer?

So to flip your coin l could,if arsed, find speeches of a similar vein from the politicians you would have continue to rule my country,with the added bonus of not caring about Scotland,which even you would have to admit Salmond does. Not selling much with that one,are you?

You could but it would be a fail. In his own words he argued that the people who failed us (and whose quotes you are free to find) were far too strict in the first place. Doh…..

So the Scots are meant to take a risk with this (fair weather) chancer?

First and foremost he cares for himself. If he really cared for Scotland he wouldnt talk such BS.

The only defence for Salmond on this subject is that light-touch regulation wouldn’t have made much of a difference; the uk regulation was inadequate and outmaneuvered anyway. So the best he can say is that he’d have made the same call everyone else did. He’s fairly unusual in that he’s admitted he was wrong, but what’s that worth really?

I would say to anyone feeling too pleased about that, that they’re welcome to show me the alternative leader who would have led us to a different end. While condemning Salmond you condemn all of his opponents in the same breath.

For anyone in the Yes campaign to claim they’d have prevented the banking crisis is absurd. The truth is it made idiots of the majority of so-called experts in and out of government, few people get to be smug about it.

(I get to be smug about it because I always said predictive economics is as reliable a science as reading entrails. But that’s not totally constructive- just because I was right to throw poo, doesn’t mean I’m not a poo throwing monkey)

Course, those same experts and institutions are still calling the shots and making predictions and assigning credit ratings with the same confidence as they did before they turned out to know ****-all, but that’s another thread 😉 Though, it is those same experts making judgements over Scottish independence, so perhaps not. Bring forth the entrails!

So the Scots are meant to take a risk with this (fair weather) chancer?

First and foremost he cares for himself. If he really cared for Scotland he wouldnt talk such BS.

THM, couldn’t agree more – the man’s as slippery as an eel dipped in olive oil. Far far worse even than what you’d typically expect from the average politician! You get the feeling he’d say anything to achieve his ambition of being president of Scotland.

Unlike CMD or say Clegg – now those are virtuous politicians who do what they say.
I think we can all agree we dont trust any politician.
I fail to see why wee eck gets this much grief from folk tbh.
He is no different from any other

I don’t agree, despite my previous posts I do think that Scotland could make it as an independent country . . . . . . eventually.

I am sure they are touched by your faith

I dont think anyone thinks it will be seamless but a generation is OTT.

Junkyard et al, quite interesting summary of the Treasury guarantee given over existing UK debt, which explains the rationale for taking the action:

I need to register and , as it murdock, I decline.
thanks though for the link.

the financial sector will relocate, probably to London. How could they not?

Indeed it not like they want to live and die by the market now is it they want rUK to underwrite there gambling, I would not be worried about NOT having to do this tbh.

I need to register and , as it murdock, I decline

It’s not actually

I stand corrected
Ta

I shall register and read

The FT stuff is not new (but being alphaville they try to make it a bit edgy!) It’s the point I made earlier about how this actually works in practice. It does however correct the idea that somehow the existing debt is carved up and some bond holders would own rUK debt and others scottish debt. That is an absurd notion.

McCrone wrote about this at length in his book (still IMO the essential reading not the BoD) – this debt will always be owned and honoured by rUK. Scotland will pay a financial compensation in proxy. That bit is simple,

But the FT is correct on the bargaining power though.

If Scotland goes Independent, and if they retain the pound, without the Bank of England acting as guarantor (Lender of Last Resort) then the financial sector will relocate, probably to London. How could they not?

This is nonsense. Most of the financial sector isn’t guaranteed by the Bank of England, just bits of the deposit taking parts. Being a lender of last resort is not the same as being a guarantor. The Scottish and British financial sectors already trade extensively in foreign currencies.

It does seem that the currency issue is a big deal on stw, and even to Alex Salmond but it doesn’t seem to be such a big deal to the people of Scotland.

Only 3% and 2% of those polled respectively said EU membership or currency was most important to them in deciding how to vote in the referendum yet our politicians see these issues as priorities.

From ScotlandSeptember18 a website set up by Sir Tom Hunter to provide impartial information.

It will be interesting to see the opinion polls in a few days time but my personal opinion is that Mr Osborne has succeeded in irritating quite a few people who were going to vote no.

I am sure that you are right Gordi. As always, when grief set in there are the classic stages:

1. Denial: been there for a while (the WP is not a BOD)
2. Anger: his supporters who swallow the bully idea are here now as you indicate (Oh F it is)
3. Bargaining: where AS finds himself this morning (can we go back and start again)
4: Depression: coming soon when the truth sets in (bllx, screwed the vote up again)
5: Acceptance: sept onwards….. 😉 (pint of 90/- please Archie)

Bargaining would be exactly where Alex Salmond would have hoped to be at this stage. I dont think Messrs Osborne and Cameron planned to be pre-negotiating though.

Anger: his supporters who swallow the bully idea are here now as you indicate

I dont think

Mr Osborne has succeeded in irritating quite a few people who were going to vote no.

those people I refer to could be classed as Salmonds supporters.
Perhaps youve been dreaming thm

rebel12 – Member
…So does the Scottish population have the stomach to sacrifice the comfort and stability in their own lives, to put their own lives on hold for future generations and the greater long term cause?

That’s exactly why I will be voting YES.

I expect an initial period of uncertainty, mistakes, and there will be some who do well out of it and others who take a hit. The beauty is that we will be able to get rid of non performing politician because our system will be democratic and more answerable to Scotland’s needs. (ie not outnumbered by SE English voters needs)

There’s a lot of playing the man on this thread – all the Alex Salmond jibes. That’s a waste of time.

A couple of points about that – one of the things I got taught at school a long long time ago is that when you see one side using the play the man scenario, that side is losing because they obviously don’t have valid answers. So even if you haven’t got the answer yourself, you know to avoid that side.

The other point is that Salmond is unlikely to be the Prime Minister of Scotland 2 elections in.

The SNP is only a small part of the independence movement, there’s plenty of people from other parties involved who are temporarily aligned with the SNP, and after independence there’s no need to vote SNP any longer.

Mind you the way the LibDems and Labour are behaving, they may be on the nose for a long time – this is a country where grudges are held for hundreds of years – so unless there’s a cull at the top of those parties, they may be gifting the SNP a few bonus elections.

That’s your own affair – as it should be. Far from revelling in Salmond being caught offside in the currency affair, i really don’t care about whether it makes him look bad or not. My only interest is that the UK does not enter an agreement so fraught with risk for so little potential return as a formal Currency Agreement with Scotland. What you do after that is of little concern to me.
I will be frank, i want Scotland out of the Union. If the NO vote wins in September i fear this issue will rumble on and on, creating continuing uncertainty in the UK & on the wider markets. It wont do the UK any good so its best if Scotland goes now.
I truly believe Scotland can & will be a successful & vibrant Nation & i look forward to seeing that happen.
So long as my taxes aren’t backing up the gambles of a Scots Govt/banking system I’m all for it.

It does seem that the currency issue is a big deal on stw, and even to Alex Salmond but it doesn’t seem to be such a big deal to the people of Scotland.

The public are morons.