Osbourne says no to currency union.

1320? I will try again…

The Declaration of Arbroath is a declaration of Scottish independence, made in 1320. It is in the form of a letter submitted to Pope John XXII, dated 6 April 1320, intended to confirm Scotland’s status as an independent, sovereign state and defending Scotland’s right to use military action when unjustly attacked.

Generally believed to have been written in the Arbroath Abbey by Bernard of Kilwinning, then Chancellor of Scotland and Abbot of Arbroath,[1] and sealed by fifty-one magnates and nobles, the letter is the sole survivor of three created at the time. The others were a letter from the King of Scots, Robert I, and a letter from four Scottish bishops which all presumably made similar points.

Larry has it pretty much correct there. The case for an independent Scotland has yet to be made! But as all sides seem to be saying, that is not in Scotland’s interest anyway 😉

If the vote goes yes, there will be plenty of compromise on both sides.

I’m not sure why rUK will be compromising much on their sovereignty in an unbalanced deal post “Yes”

I’m not sure why rUK will be compromising much on their sovereignty in an unbalanced deal post “Yes”

Right now it’s politics rather than economics that matters, the yes camp say what they think will get them a yes vote and vice-versa. So what people say is their red line now, won’t necessarily be so post vote.

Right now it’s politics rather than economics that matters, the yes camp say what they think will get them a yes vote and vice-versa. So what people say is their red line now, won’t necessarily be so post vote.

the politics matters after a Yes vote, except now there is a pending rUK state and the politicians representing it will not be falling over themselves to give iScotland an easy ride. Remember there is a 2015 General Election, which of the major parties is going to campaign for a currency union and reduced sovereignty for rUK?

I am slow but got there in the end Duckman. First meeting of the Scottish Parliament

In the case of an independent Scotland, the tensions would quickly become apparent because the country that formed the smaller part of the currency union would have a social-democratic bent while the bigger part would, by virtue of having lost Scotland, have a more conservative economic approach.

I’m not sure that is a foregone conclusion.

The bayonets have come out.

…again..surprised I missed that little gem

the politics matters after a Yes vote, except now there is a pending rUK state and the politicians representing it will not be falling over themselves to give iScotland an easy ride.

Assuming they get a Yes vote, I can’t see any reason the main parties would want to give Scotland a hard ride. It’s unlikely to be a vote winner south of the border. Most of the people who feel strongly about the issue live north of the border.

I think you’re ignoring the deep antipathy and distrust of any kind of currency union that exists in middle England.

Entering the ERM seemed like such a good idea at the time, but when they announced the news that interest rates had been put to 17% to try to stay in, I just had no idea how I would pay the mortgage. Us and millions of others. Leaving the ERM later that day was like a nightmare finally ending.

Any politician who tries to take us down the same fatal path of currency union had better be very brave….

I think you’re ignoring the deep antipathy and distrust of any kind of currency union everything that exists in middle England

FTFY 😉

It’s not like we don’t already have a currency union with Scotland though. The only difference is we also have a full fiscal union which may or may not continue.

All of course assuming they do vote yes.

Tbf currency union isn’t the same as the ERM, but I can see how ppl would be suspicious of any shenanigans.

I don’t see what’s in currency union for the UK.

I don’t see what’s in currency union for the UK.

Given Scotland is a large trading partner with the rUK, minimising trading costs is a big plus….

Footflaps, spot on. We have a very successfully currency union. As stated before, the reason is that UNLIKE the euro zone, the UK satisfies the criteria to make currency unions (1) work and (2) a good choice.

The folly (or deceit) of yS is to simultaneously propose a currency union while taking away part of the foundations that make it successful. The reason for doings this? Simple, it’s not a manifesto for independence at all. Their bluff has been called.

The position for rUK is pretty obvious. It would be absurd for any rUk political party to run the assymeteric risks proposed by yS. Hence Ed Milliband is the latest to nail his flag to the mast. There is no bluff here.

Would a move towards devo max not cause the same issues as independence with a currency union?

We have a very successfully currency union.

That depends how you define very successful. Successful for those in the SE maybe, but the what’s to say things else where wouldn’t be better if Scotland had been independent. It’s all if’s, buts and whatabouts but it’s a bit of a one sided view.

There is a perversely interesting factor in the UK “recovery” in that an improving economy would bring the Tories closer to Labour in the polls, thus increasing fears of another five years under austerity for Scots, thereby possibly increasing the yS vote. Maybe that’s a bit convoluted.

How AS and the southern party leaders play that one out will be interesting.

Given Scotland is a large trading partner with the rUK, minimising trading costs is a big plus….

It’s more important to Scotland than the UK. In any case, private people can still trade in pounds perfectly happily – the real problem is to establish legal tender…which leads us back to the question: what would be the point of having a Scottish currency? And if there is no point, is there really a big difference between having a tenth of a say over the GBP as part of some (yet to be negotiated) currency union with rUK and just using the GBP without union? Why bother with the time and effort of a new currency or perrenial disputes over monetary policy at all?

the reason is that UNLIKE the euro zone, the UK satisfies the criteria to make currency unions (1) work and (2) a good choice.

In your opinion of course – it is not an economic fact [ do they exist?]
I am sure that is what many said when ours was implemented and the US of A and ….ah you get the point – some take longer to adjust to change than others but yes a new currency union over a larger area will create harmonisation problems in the short term

TBH economics/economists do not help itself/themself when it uses “facts” to make political points.
Any currency union can work if there is enough political will

Clearly in this case this is unlikely to happen as the bankroller – rUK is the one who wants it least and takes the heaviest risk and burden

In the EU the bankrollers want it and are happy to fund it

Its a fairly pointless debate in that it is all hypothetical

i doubt anyone believes either sides lines in the sand

_ I might start a new thread so we can make predictions as
1. they will be widely different
2. None will end up being that accurate

Basically we dont know and we have no way of knowing whatever your political view is.

Are all you blue people looking forward to having Dave and chums up there today? I do hope so. Please be careful to look after them though. It would be simply terrible if you decided to come over all Braveheart, storm the place, decapitate the lot of them, and parade their severed heads on spikes throughout the streets of Aberdeen

The beauty of freedom of speech!!!

DD, that will be interesting, the economy has been the Tories joker card all along. Will it become a trump by 2015? The converse argument is the old one about an indep Scotland giving he Tories an upper hand south of the border! Lots of twists in this one.

Kona, are you suggesting parallel currencies? Scotland is not a basket case, far from it. There would be no need for extreme measures.

The “say” argument ie would idepen Scotland have a member on MPC etc is interesting, But that only addresses the Scottish perspective. The Achilles heel is that rUK will not and should not underwrite risks of another nation without control/commitment from the other party and over policy. The technocrats and the politicians are all pointing to the € to demonstrate why. To succeed the politicians (not just the economists who understand how these things work) know that Europe has to move towards much greater interdependence including fiscal policy. The only people who are ignoring this basic fact are yS.

Still I suppose there is always some merit of standing out from the crowd!!!!

Footflaps – just found the whole Larry Elliot article. Pretty solid and great concluding paragraph.

“Kona, are you suggesting parallel currencies? “

I have no idea what parallel currencies are.

Junkyard

“In the EU the bankrollers want it and are happy to fund it”

without going to far off topic, the above comment is not completely true. Germany is pretty much the EU bankrollee and is only funding it if there rules are followed (see their recent constitutional court ruling regarding bale outs.) There are number of other countries that are a bit twitchy about the level of collective risk (Finland and Nederlands are two).

Your point about political will is correct though but only until the big bills come in. This could happen with Spain and Italy, we will all be in trouble then.

Back to the independence debate, personally I can’t wait for it all to be over whatever the outcome.

An official currency…

…and another one that most people use in practice

Given Scotland is a large trading partner with the rUK, minimising trading costs is a big plus….

Not so many years ago:

”I think that being outside the euro area is already penalising the Scottish economy. In the medium-term, the longer we stay out, the more damage will accumulate. The euro is an example of why Scotland needs membership status so that it can take a decision on entry into the single currency,”

”Scotland is a trading nation and our main trading partner is the EU. At present, over 60% of our manufactured exports are to the EU and it is to Europe that we must look to secure Scottish prosperity and Scottish jobs,” he told his audience of European officials and diplomats. The SNP leader quoted a recent Scottish Council for Development and Industry survey of Scottish exporters which revealed that 87% of all businesses surveyed said they were being badly hit by the value of the pound, that 69% had lost exports and a third had had to lay off staff.

What I find quite interesting about this, as a somewhat impartial person from England living in Scotland is…

AS an his bunch are stamping about saying how we’d be better on our own and not run by people with no clue what Scotland needs, playing the political and emotional A game.
When those people say “that’s fine, but if you leave don’t expect us to share your risks and don’t forget you still owe part of this” it’s “that’s so unfair, why are you threatening us? Stop playing a political game to threaten us”? What do they expect? Is he really that naive? Why would it be a one-way process? It affects both of us (badly as far as I can see) if Scotland leaves – of course they will attempt to prevent it, but at the very least they would be remiss if they didn’t minimise damage to their remaining constituents.

I like the Scottish cultural differences, but I like the security and buffers afforded by a union. They currently exist together, they may need fine tuning, but why throw the baby out with the bath water?

Discussing currency on Monday morning, the First Minister said: “It’s bluster because George Osborne expressed [the argument] as about keeing the pound.

“Of course the pound is an internationally tradable currency. It’s not a question of keeping the pound, it’s a question of whether there would be agreed a currency union. That’s the bluster aspect,” the First Minister said.

AS an his bunch are stamping about saying how we’d be better on our own and not run by people with no clue what Scotland needs, playing the political and emotional A game.
When those people say “that’s fine, but if you leave don’t expect us to share your risks and don’t forget you still owe part of this” it’s “that’s so unfair, why are you threatening us? Stop playing a political game to threaten us”? What do they expect? Is he really that naive? Why would it be a one-way process?

Interesting that that’s the view you form from the media coverage. AS and yes campaign have been very clear that they are willing and want to take on the liabilities as well as the assets. It’s the lack of negotiation and dictation of what Scotland will and won’t be able to do that (in theory) that AS and yes campaign are complaining about. As Westminster wanted to not pre negotiate they shouldn’t be making statements which are effectively pre negotiating.

MT dont disagree but the critical think that matter to a union is political will not economic theories. Your right it may crack but it will break due to politics not economics .
AS is being a canny politician here and trying to have it both ways for political capital – is that wise, skilled , unscrupulous – depends on your politics I guess. However but only one side has refused to negotiate before hand [ though they are happy to announce lots of negative stuff] or have a public debate and it is not AS.

An official currency…

…and another one that most people use in practice
Okay, I’m with you.

I don’t think that’s extreme. I just think it shows how pointless a new Scottish currency would be. So:

– Scottish currency pointless
– using the euro less convenient when your major trade partner doesn’t use it (although the trading bit was no problem for Ireland, so it’s not rocket science
– currency union with the UK is pointless for the UK (it’s a small market and they will just use pounds to trade anyway) and even if you did get it Scotland’s say would be extremely limited

Solution: give up the posturing and just use pounds without currency union.

Except that very few people, including yS and BT, think that his would be a viable option. It’s not even on the cards at the moment kona, from any side.

Scottish currency, like all options, has pluses and minus but it is not pointless. AS wants the former but not the latter. Hence he accepts the FC conclusion that a CU is a better option, the hiccup is that the other side crucially doesn’t want it for blindingly obvious reasons. There’s nothing about negotiation here. The technocrats and the political are simply informing the Scottish public that this is a non-starter. They are not hiding behind any theory. They are simply explaining the facts that are supported by both theory AND practice. And this is coming from multiple sources.

If people would prefer the debate to continue in ignorance of the key facts, then so be it. Seems pointless to me. What is being proposed by yS is a non-starter for rUK. YS might as well add that they want to annex the Isle of Man at the same time, there is the same mileage in both ideas (ie zero). A line has been drawn firmly and not in the sand this time. It’s concrete.

Its making interesting reading this. It seems to have dissolved into politicians and nice middle class people squabbling over the details of any future momentary union. Or not.

But I get the feeling that those indulging in this are spectacularly missing the point. From what I see from quite a lot of mates I’ve got up in Glasgow, the decision is going to be taken on a lot more instinctive and visceral level. In fact, what I’ve heard from them is summed up pretty much exactly in this article in this mornings Guardian

Glasgow’s East End – frontline in the battle for Scotland

Makes interesting reading

I don’t see what the main political parties are doing as no negotiating. They’re just stating their position. One only negotiates when one has to. Not because the other guy is whinging for it.

So that is how it works with Mrs DD 😉

The technocrats and the political are simply informing the Scottish public that this is a non-starter.

You say this as if we can believe the word of any politician and as if their word is their bond…it may not be the wisest of assumptions.

It really is unwise to take the position of any politician [ on any side of any debate] as a de facto fact that cannot and will not be altered. You would let anyone do this with a AS proclamation.

As DD notes it is the starting point for negotiations and , like much of the deal, it will likely be a dogs dinner of a fudge – see Nick clegg and coalition for example

Sorry, correction to my previous. Of course it’s no negotiating (for now anyway) but from the arguments put forward so far, rUK leaders don’t need to it’s not that they’d be unwilling if they had to. I can’t see how their hands would be forced in the event of a “yes” vote. But I’m open to reasoned argument to the opposite if anyone can show how they would.

Interesting that that’s the view you form from the media coverage. AS and yes campaign have been very clear that they are willing and want to take on the liabilities as well as the assets.

Not from my point of view based on general TV and radio coverage, not really spent any time digging into their policies in detail because everything from AS currently seems to carry no data to back it up. If they want to be taken more seriously they need to address these areas as it’s a view held by many I know.

Sorry, been away for a few thousand posts. Have we sorted it out yet? 🙂

That depends how you define very successful. Successful for those in the SE maybe, but the what’s to say things else where wouldn’t be better if Scotland had been independent. It’s all if’s, buts and whatabouts but it’s a bit of a one sided view.

However what AS is proposing is even worse (for Scotland), keep the shared currency but drop out of any control of it. So rUK sets interest rates based around what’s best for rUK and Scotland just puts up with it. At least now, the BoE is obliged to take note of North of the Border….

I can’t see how their hands would be forced in the event of a “yes” vote. But I’m open to reasoned argument to the opposite if anyone can show how they would.

I have no argument that is rational[economic – then again I rarely do :wink:]
but it is politics and anything could happen
Currency for oil?
Currency for debt?
I am not saying it will happen either but anything might – its the flaw in this vote they are voting for a wish list and no one knows what will happen – EU membership, rUK currency union, who knows what will happen

I dont trust either sides outpourings tbh