News Column

Salmond should put his money on a Scots krona

February 16, 2014

First it was left to Bank of England governor Mark Carney to state the obvious and point out that sharing the pound would force

a newly independent Scotland to hand over some national sovereignty. Then last week George Osborne, Ed Balls and Danny Alexander followed up Carney's remarks by effectively taking currency-sharing off the table.

Of course the merest glance across the Channel is enough to show that nations sharing a currency need to closely co-ordinate their budgets and the riskier parts of their economies - their banks, for instance. So where does that leave first minister Alex Salmond? The knee-jerk reaction was a counter-threat: no pound means no debt-sharing. But there are plenty of other things Scotland would lose in a tit-for-tat negotiation that make a battle of words unappetising.

So maybe accepting the logic of two separate currencies would be a better route. The euro is off the table because Brussels will only accept a country that has managed its own currency for a few years, which appears to leave us with a Scottish dollar, punt, or Celtic krona.

Senior figures in the yes campaign are believed to be lobbying hard for a switch in tactics. The Daily Record reported that former SNP deputy leader Jim Sillars, Yes Scotland chairman Dennis Canavan and Scottish Green party co-convenor Patrick Harvie have all urged Mr Independence to adopt a separate currency. But Salmond wants to avoid opposition jibes that quitting the UK comes with huge risks. When Scots report that they will reject separation if it costs them even a small dip in their standard of living, a purely emotional plea to their sense of self is off the agenda.

Yet without a switch now to full independence with a new currency, Salmond faces the prospect of going into the election offering the electorate a messy negotiation with an unknown outcome. He can dismiss London's scaremongering all he likes, but given the logic of London's position he needs to stop talking about separation as if it is some form of Devo Max, and be realistic about becoming a confident new country.

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Source: Observer (UK)

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