The main reason the Government cites for not wanting a currency union with Scotland is the disproportionate size of our banking sector relative to the economy as a whole. Under EU law, banks must have their head offices in the country where they do most business. If Scotland becomes independent RBS, Lloyds & co. will have to move their nameplates to London. The markets know this, hence the pressure on the Bank of England to confirm that the UK is liable for all debt under any circumstances and have had to prepare contingency plans for a Yes vote. They now want clarity on Sterling, due to the impact on the UKs balance of payments. An independent Scotland would have a £30 Billion Sterling balance of payments surplus. I suspect the markets and City see no reason for objecting to a currency union, as this threatens Scotland walking away from UK debt if a currency union can’t be agreed as this is not an equitable share of assets and liabilities. Sterling has been built up into a major currency over many years, with all of the Home Countries playing their part in this. Scotland views Sterling as a goodwill asset and wants to continue sharing this. This political tactic, conceived by Alistair Darling and adopted by Better Together, is backfiring, as this is nothing more than a bluff to try and win the Referendum.
Posted on: Thu, 04 Sep 2014 09:05:43 +0000
Trending Topics
Recently Viewed Topics
© 2015