Quantcast

Sturgeon humiliated as hopes for independent Scotland to cling to pound ‘not viable’

Must read

Nicola Sturgeon should ‘get on with it’ says Alex Salmond

Ms Sturgeon this week announced her plans to slowly ease Scotland out of strict coronavirus restrictions. Following Boris Johnson’s lead, it means the country will move in step with its southern neighbour but in a “modified” fashion. Whereas Mr Johnson has advised those in England to use discretion regarding face masks, the Scottish First Minister expects Scots to continue to use them.

Certain restrictions around physical distancing and numbers meeting both indoors and outdoors will also remain.

As the country cautiously exits lockdown, Ms Sturgeon and her Scottish National Party (SNP) are drawing up plans to exit the UK.

- Advertisement -

An Indyref2 is high on the SNP’s agenda, its support having been strengthened during the pandemic and Ms Sturgeon’s victory at Holyrood’s May elections – just one shy of a majority – only boosting the party.

Great obstacles remain between where Scotland is today and where it wants to be post-independence.

Nicola Sturgeon: The Scottish First Minister's currency plans for post-independence are unclear

- Advertisement -

Nicola Sturgeon: The Scottish First Minister’s currency plans for post-independence are unclear (Image: GETTY)

Coronavirus: Scotland will move in step with England in easing coronavirus restrictions

Coronavirus: Scotland will move in step with England in easing coronavirus restrictions (Image: GETTY)

One of the biggest issues, if not the biggest, is currency and what tender Scotland would use outside the Union.

- Advertisement -

Ms Sturgeon has claimed the country would continue to use sterling for “as long as necessary”.

Yet, a Government white paper compiled by the Economic Affairs Committee ahead of the 2014 independence vote said this is “not a viable option”.

It noted: “The choice of currency is perhaps the most important economic decision an independent Scottish Government would face.”

JUST INEvery shop demanding people wear face masks after July 19 – full list

Indyref2: Sturgeon is hoping to hold an Indyref2 in the next few years

Indyref2: Sturgeon is hoping to hold an Indyref2 in the next few years (Image: GETTY)

If an independent Scotland were to retain sterling, monetary policy would continue to be set by the Bank of England.

But, “this has implications for the regulation of Scotland’s financial sector which in turn is likely to have implications for tax and spending policies”.

While an independent Scotland could continue using sterling without the rest of the UK’s consent in the same way some Latin American countries have adopted the US dollar and Montenegro uses the euro, the country would have no central bank and no access to the services of, or influence over, the Bank of England.

Yet, Scotland has a large financial services sector that relies on access to central bank services.

DON’T MISS

Stonehenge’s 5,000-year-old mystery ‘solved’ with discovery [REPORT]
Sturgeon told ‘find new customer’ for independent Scotland’s energy  [INSIGHT]
UK Covid deaths spike in highest jump since MARCH 
[ANALYSIS] 

Bank of England: Scotland could not hope for 'dollarisation' like other countries

Bank of England: Scotland could not hope for ‘dollarisation’ like other countries (Image: GETTY)

Sturgeon history: A young Sturgeon at an SNP conference in the Nineties

Sturgeon history: A young Sturgeon at an SNP conference in the Nineties (Image: GETTY)

As Professor Jim Gallagher formerly of Nuffield College, Oxford said, because of this, currency substitution “is not a viable option” for a country like Scotland.

John Swinney, now deputy Scottish First Minister, told the report: “The core proposition is for us to establish a formal monetary union with the rest of the United Kingdom with the Bank of England operating as the central bank for sterling and so on, discharging its functions on behalf of both fiscal authorities in Scotland and the rest of the United Kingdom.

“Those functions would be on essentially price stability and financial stability.”

He added: “The Bank of England is … the Bank of the whole United Kingdom … we would wish the Bank of England to continue [to be] lender of last resort to [Scottish] financial institutions.”

Sturgeon profile: She took over as First Minister following the failed 2014 referendum

Sturgeon profile: She took over as First Minister following the failed 2014 referendum (Image: Express Newspapers)

If successful in her independence bid, Ms Sturgeon wants Scotland to join the EU, with the country voting to remain a part of the bloc in the 2016 Brexit referendum.

Its membership would mean adopting the euro.

But members of the SNP have suggested this would not be the case, with Ian Blackford, the party’s Westminster leader, having assured voters they would not have to use the euro in 2019.

The EU has repeatedly confirmed that joining the Exchange Rate Mechanism isn’t voluntary, however.

Former European Commission President Jean-Claude Juncker said in 2018: “The euro is meant to be the single currency of the European Union as a whole.

“All but two of our member states are required and entitled to join the euro once they fulfil the conditions.”

Scotland news: Many logistical issues around independence remain unanswered

Scotland news: Many logistical issues around independence remain unanswered (Image: GETTY)

If an independent Scotland seeking to sign up to the EU refused to adopt the euro, it would find itself “not fully compatible” with the Treaty on the Functioning of the European Union – a key piece of EU law.

All of this is on the assumption that the EU would even welcome an independent Scotland.

Tensions exist between countries like Spain and the autonomous community of Catalonia, which wants to join the EU as an independent state.

Others, like the historian Robert Tombs, have noted that the EU would not want to stir further bad blood between itself and the UK post-Brexit by allowing Scotland to join.

Adblock test (Why?)

Read more
This post originally posted here Daily Express :: UK Feed

- Advertisement -
Sturgeon humiliated as hopes for independent Scotland to cling to pound 'not viable'
Newslanes Mediahttps://newslanes.com
Newslanes.com is the leading e-news platform for the latest breaking news of world today. The news repository targets everyone after factual and well-researched information from a dedicated global team of news reporters and editors.
- Advertisement -

More articles

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.

- Advertisement -

Latest article