There is NO plan B, which part dont you and they get, there is NO plan B... If we dont get plan A then there is no alternative but to walk away. Yet there will be negotiations following a pro-independence vote. Otherwise, the rUK would have far too much to lose on other fronts that also require negotiations, talks London will be keen to take up but which the Scottish government, if it follows Osborne’s punitive example, could refuse to negotiate about at all. Scotland need not negotiate sharing the UK debt and could simply let Westminster shoulder the entire estimated UK debt of £1.6trn in 2016/17. That is certainly the logic of the rUK being a continuator state. Nothing in international law requires Scotland to pay one sterling pound of UK debt if the rUK is deemed the continuator state. Nonetheless, the Scottish government has already offered to accept the liability of an estimated £100-£130bn as an independent Scotland’s share of the overall UK debt, but only as the end point of post-referendum negotiations. Dire warnings that Scotland’s credibility in the markets would somehow nosedive if this transfer of debt were to happen overlook two simple facts. First, the UK Treasury already has agreed to cover all UK gilts in the event of independence, a point Osborne made in his speech. So there is no default on the horizon to panic investors. Second, Scotland would start fresh as a debt-free nation with the apparent agreement, indeed blessing, of the rUK. Perhaps Westminster really has decided to absorb completely the UK debt and thus not negotiate, but rUK taxpayers may wonder about the wisdom of such folly, particularly by a Conservative government. Creditors and investors might view the Scottish position—one of willing to pay, in good faith, its fair share of the UK debt but reluctantly avoiding that financial burden if London insists on being a continuator state and rejecting negotiations—as a sign of financial strength and political acume, rather than weakness or naivety in Edinburgh.
Posted on: Sun, 10 Aug 2014 15:41:15 +0000