Osbourne says no to currency union.

I’ve got no idea how it would be administered

but you’re such a big fan of them!

if you’re a green, how would you feel if your new oil fund went off and invested in shale oil projects in Poland? or Nestle’s expansion in Subsaharan Africa?

how is it that oil revenues are simultaneously big enough such that an oil fund would be worthwhile and oil revenue couldn’t solely be paid into an oil fund such that current expenditure could be maintained AND small enough that if the money stopped rolling in tomorrow the Scottish economy would be fine?

At this rate the nits to be picked will run out before the oil….

23 days to go…

Public spending in Scotland: £64.5 Billion
Tax revenues (including geographic share North sea revenues): £56.9 Billion

And the difference is, as I’m sure you know, made up of borrowing – like is is for the UK and almost every other country in the world. Scotland will have a good credit rating, we’ll be able to borrow at rates at least as favourable as the UK.

Good to bring that up, though – because the strength of the UK economy and its “broad shoulders” are often given as reasons Scotland is better off in the union. So how are government borrowing rates doing across Europe? Here’s how they’ve changed in the last year:

Belgium: DOWN 37%
Germany: DOWN 29%
Ireland: DOWN 43%
Greece: DOWN 42%
Spain: DOWN 43%
France: DOWN 30%
Cyprus: n/c
Latvia: DOWN 26%
Luxembourg: DOWN 38%
Malta: DOWN 17%
Netherlands: DOWN 31%
Austria: DOWN 29%
Portugal: DOWN 46%
Slovenia: DOWN 52%
Slovakia: DOWN 34%
Bulgaria: DOWN 2%
Czech Rep: DOWN 33%
Denmark: DOWN 30%
Croatia: DOWN 24%
Lithuania: DOWN 18%
Hungary: DOWN 25%
Poland: DOWN 16%
Romania: DOWN 21%
Sweden: DOWN 26%
United Kingdom: UP 11%

Spot the odd one out. That’s what happens when you mistake another property bubble for economic growth.

konabunny – Member
…if you’re a green, how would you feel if your new oil fund went off and invested in shale oil projects in Poland? or Nestle’s expansion in Subsaharan Africa?

Probably slightly less disgust than he feels when the UK govt engages in yet another killing foreigners in their own country exercise.

@Ben – again please try applying critical thought before reposting information like your list above. For example:

1. Why is the time period of 1 year appropriate?
2. What base interest rate did each of the countries start from?
3. What was happening in the Eurozone 12 months ago that might have impacted those countries differently to the UK?

Your assertion is based on insufficient information and logical fallacy. Interest rates the UK suffers on its debt were at near all time lows during the period of the financial crisis, and especially during the recent Eurozone crisis. They are still incredibly low. This was because of many reasons including:

1. UK government debt was/is seen as a safe haven despite the overall indebtedness of our economy, partly because we can’t strictly default (Sterling debt) but also because there were so few other safe investments to allocate across (USTs and German bonds being the obvious competitors)

2. We were outside of the Eurozone hence our Sterling denominated debt was more attractive to the market

3. The Debt Management Office is clearly staffed by the worlds best salesmen

4. The markets appreciated the austerity mood music from the chancellor, even though understanding that austerity wasn’t really occurring (showed willing at least).

So, the true picture behind those numbers is that UK debt costs are still incredibly low, but they have risen (normalised even) in the last 12 months because many of the other countries were at incredibly high rates 12 months ago. The Eurozone crisis has lessened somewhat since (sticking plasters and incredible economic suffering in Greece and Spain have helped with that) hence lower rates for them.

Overall we can still borrow at very low rates, and I might add that’s even after the yS campaign tried to bu**er it up by threatening not to stand by UK debt – which was only headed off by the Treasury guaranteeing all UK debt (before the start of this thread).

if you’re a green, how would you feel if your new oil fund went off and invested in shale oil projects in Poland? or Nestle’s expansion in Subsaharan Africa?

I’d be very disappointed of course. So what? Are you saying because I can’t tell you exactly how a future oil fund will be administered, an oil fund is a bad idea? I don’t get where you’re going with this line of argument.

@bainbrge – you’re right, actual rates vs. trends are also important. So who’s borrowing at better rates than the UK at the moment?

Well obviously Germany and France (1.11 and 1.56 compared to the UK’s 2.31). But also the Czech Republic (1.56), Netherlands, Austria, Luxembourg, Slovakia, Finland, Denmark and Sweden. Even Ireland (2.23) can borrow at better rates than the UK.

Ben – there are obvious reasons for that as well – the Eurozone is facing a deflationary slump (unlike the UK which is growing like the clappers). Hence there are expectations that the ECB will have to do something like the UK and US and implement special measures including quantitative easing.

The potential for QE means that the market is expecting rising prices for government bonds (the ECB will buy them as part of QE). Hence the markets are buying such bonds and lowering the yield (the lower the yield the higher the market price).

So, your observation largely reflects the differing market expectations for the Eurozone and the UK. Investors believe the Eurozone is heading for stagnation and deflation, hence expecting QE, hence buying bonds. The same does not apply to the UK. So, from that perspective the higher rates for the UK reflect the better economic prospects for our economy.

I don’t get where you’re going with this line of argument.

I’m not surprised. you’ve hitched onto this idea of an sovereign wealth fund as being a great thing without thinking through what it means. you’re a self-proclaimed green who is proposing the newly independent Scottish state spends money on a state investment fund to invest in global capitalism instead of spending money on eradicating want, disease, ignorance, squalor and idleness.

bainbrge – Member
…unlike the UK which is growing like the clappers…

The current UK version of economic growth is of the the king has no trousers variety.

That the huge debt hole is getting larger is growth, but the wrong sort.

Instead of worrying how an independent Scotland is going to handles its finances, it may be better for rUK residents to worry about how you are going to get out of that hole once you don’t have Scotland to subsidise you.

The previous GFC proved that in the end the BS has to stop, debt has to be repaid to the wealthy market manipulators.

…..instead of spending money on eradicating want, disease, ignorance, squalor and idleness.

How about you explain how you would eradicate want, disease, ignorance, squalor and idleness Konabunny ?

You have got a plan haven’t you ?

And the difference is, as I’m sure you know, made up of borrowing – like is is for the UK and almost every other country in the world. Scotland will have a good credit rating, we’ll be able to borrow at rates at least as favourable as the UK.

Hang on, lets get this straight

your financial plan is to borrow money off the international markets to cover current spending, allowing you to invest the oil money?

Taking out a mortgage to buy shares 😯

This is well worth a read:

The McCrone Legacy

it’s a great article if iScotland can go back in time, go independent in the 1970s, keep the energy sector state-owned, avoid a labour-related disaster in the 1980s, and plough the money into a sovereign wealth fund. then it’ll be just like Norway!

your financial plan is to borrow money off the international markets to cover current spending, allowing you to invest the oil money?
Taking out a mortgage to buy shares

it’s okay, an ex-banker will likely be the premier elected official (or Fairst Heidyin, as we say in Ulster Scots), so he’ll be well-placed to monitor the transfer of state revenue into an investment fund.

Mirlees backs salmond on currency union
Seems the “rats” are happy to stay aboard after all.

Blimey, Gordi even the rats are confused aren’t they, not wonder the DO finds it hard!!!

Technically he is right as there is not debt to walk away from, that why daddy rat calls it a technical default it iS tried to pull that trick.

Ben, I love your posts again. There is a refreshing innocence to them. As others have said, Europe’s low rates are not a sign of strength. They are an indication of the coming/existing deflation. Be careful what you wish for.

And a big thank you to France for a timely demonstration of how currency union dictates domestic policy 😆

You lot do realise that if an independent Scotland has a CU with the rUK and it turns out as dreadful as you seem to want, we can change that.

You know, democracy…

Yes democracy, where the UK electorate can (& almost certainly will) put the kibosh on any proposal to formally enter a Currency Union with a Foreign State.

Yes democracy, where the UK electorate can (& almost certainly will) put the kibosh on any proposal to formally enter a Currency Union with a Foreign State.

They also elected a Tory government, so they can’t be that smart 😉

Technically no, they didn’t!
Don’t underestimate the opposition to a formal Currency Union in the rUK, its not just Scots who have the right to protect their own future interests.

Yes democracy, where the UK electorate can (& almost certainly will) put the kibosh on any proposal to formally enter a Currency Union with a Foreign State.

What a shame that would be wouldn’t it.

Can report that somebody has restored the modesty of the Yes sign in Walkerburn. Can also confirm that somebody – it may or may not have been the same person – has ripped down all the No Thanks signs along the road from Auchendinny to Peebles over the weekend, 4 in total I think. So vandals on both sides, but only one has a sense of humour !

In my own personal unscientific On The Street Survey only one in about 20 folk I know are voting Yes, the rest firm No. But then you tend to mix with folk who think like you do, and I do live in Border territory.

P.S some of the people on here remind me of that bit in the Hitchhikers Guide to the Galaxy – when God successfully argued that black is white, then got run over and killed on a pedestrian crossing.

Saying NO to Currency Union certainly won’t be a shame for the rUK but it may well upset Mr Salmond – after all, he repeatedly refuses to come up with a currency Plan B even in the face of a very loud negative answer from various sectors of the entity he needs to agree to such.

he repeatedly refuses to come up with a currency Plan B

No he doesn’t. The independent Fiscal Commission recommended a currency union, but also covered various other options B, C, D and E.

This isn’t Alex Salmond making stuff up on his chuff, there were several Nobel winning economists analysing this to come up with the recommendations.

Ben he’s flip flopped from euro to CU to sterlingisation. Embarrassing that a proud nation is now relying on sterlingisation and the threat of a technical default. You must be paid a lot as a pro economist to put your name to such bllx.

The independent Fiscal Commission recommended a currency union, but also covered various other options B, C, D and E

Indeed they did Ben. But they didn’t say which was which.

AS needs to be clear which one is B. And what the implications for the country might be.

Ben, in a lengthy report, which option did the FC dismiss in one paragraph?

Shush, I’m watching the debate – hope everyone else is too…

There will be no currency union and if they don’t take the debt then an equivalent amount of assets will be withheld Zzzzzzzzzzzzzzzz

That Alex Salmond doesn’t like answering questions, does he?

The debate is predictably a load of point scoring pish.

This just about sums it up https://mobile.twitter.com/PeterKGeoghegan/status/503987940788539392

I think I’d vote for that Darling chap. He seems quite the most sensible politician I’ve seen on the telly for a while.

I am finding Alex salmand a rude and overbearing individual who doesn’t like to answer questions. Alastair darling isn’t great but at least he isn’t doing much cheap point scoring……

Offft, darling is getting slapped about the stage here!

This is certainly very different to the last debate – I give it 20 minutes until Darling loses it completely.

I agree piemonster these debates could have been a lot better, I think agreeing on questions beforehand would have been better so that proper researched answers could have been given. The one-on-one format suits presidential elections rather than referendums as no one is voting for the person in the debate, maybe a panel would have been a better alternative.

Just turned the TV off. Fed up of the consistent rude talking over each other. Disappointing really Can’t even hear the valid points made on either side.

Salmond is the worse, can’t believe the sheer arrogance.