Tendance Coatesy

Left Socialist Blog

Scottish Radical Independence Campaign to take “radical currency option” ?

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Scotland’s New Currency? The Scrote. 

The Pound is causing a lot of problems for those advocating Scottish independence.

Ralph Blake (the pen name of an analyst in the Scottish financial sector) looks at the option.

  • Continuing to use the Pound while walking away from existing debt and issuing your own debt.This will mean high borrowing costs, because nobody will trust the Scots not to default again.
  • Issue a Scottish currency pegged to the pound.   This attempt runs up against the country’s lack of reserves.
  • Use the pound while negotiating entry into the Euro. The will mean (he passes over this lightly) negotiating terms for entry. It will also leave unresolved difficulties of ” issuing debt and underwriting the banking sector
  • “Finally, the radical alternative is take the Norwegian road and nationalise the oil, introduce progressive taxation and join the European Free Trade Alliance. It is key that the left wing of the independence movement advocates the radical currency option otherwise they will become caught in the SNP’s currency trap which will only weaken the case for independence.”

The Scottish Socialist Party says,

“The Scottish Socialist Party is determined to continue to tap into Scotland’s honourable tradition for a fair,  equitable society, and an independent currency, voluntarily linked to the English pound initially, is surely the best option in creating an environment for a better Scotland.”

The SSP’s gasp of reality is sure-footed: they announce,

“A free-floating Scottish currency would seem an ideal solution, but there are drawbacks. The Scottish economy would be much stronger than that of the rest of the UK (RUK) with a positive trade balance to contrast with a massive RUK deficit.”

But

“Scotland’s overall balance of payments would also look much better than that of the RUK. In these circumstances, Scotland’s free-floating currency, after an initial speculative period, would float upwards against both the RUK pound and the Euro, damaging both Scottish exports and tourism. In the longer term, an appreciating Scottish currency may be both inevitable and even desirable, but the economic disruption in the short term would be alarming and damaging.”

“The answer then is to tie an independent Scottish pound to the English pound initially, ensuring, for example, that cross-border trade and other economic transactions continue as prior to independence. In the meantime, a new Central Bank of Scotland could then be created, ensuring that monetary decision-making was devolved to a truly independent nation.”

Their concern for the needs of the “nation” aside, how exactly is the Scottish pound going to be “tied” to the UK Pound? An what independence will its financial policy have if this is done?

Meanwhile (Sunday Herald, today),

“Key members of Yes Scotland are expected to use an official board meeting to argue that adopting a new currency should be considered instead of Salmond’s vision of sharing sterling in the long term with the rest of the UK (rUK).”

We propose that the Scottish Socialist party takes the really radical currency option.

An independent Scottish needs an independent coin.

There are suggestions that the land re-introduces the Groat (Could Scotland go back to the groat?).

In honour of the past and Alba’s fair name it should be called the Scrote.

One Response

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  1. […] In these circumstances, Scotland's free-floating currency, after an initial speculative period, would float upwards against both the RUK pound and the Euro, damaging both Scottish exports and tourism.  […]


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