For Scotland, the price of freedom is a pound

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Hopefully, by the morning of September 19, the protracted, heated, and let’s be honest, somewhat tiresome debate over Scottish independence will be over. Done and dusted, thank you and good night. But until then we have months of political grandstanding and pot shots to endure. I can’t wait, can you? The political slagging match appears to have already started, long before the allocated date of May 18 when the referendum campaign is due to start; seriously guys, wait until then, please! Cameron has labelled first minister Salmond “a man without a plan”, Osborne has been accused of “bluffing” by the deputy first minister, and so it will continue for the next seven months. As you can see, the very significant issue of whether Scotland does become an independent nation or not is on its way, as all political votes are these days, to becoming a battle of personalities; it wouldn’t surprise me if between now and the time of the referendum, a TV debate was threatened.

The latest stop on the “Scottish Independence Debate Train” (sounds awful doesn’t it?!) is currency. Can and will Scotland be allowed to keep sterling? Or be forced to join the Euro? Or make up its own currency, that may or may not look suspiciously like the pound, but is not the same; seriously, it’s not, please drop it already. Cameron and Osborne are sceptical about establishing a currency union with Scotland after the whole Euro omnishambles, which is, to be fair to them, understandable. In any case, as the former UK Chancellor Alistair Darling has stated: “a currency union can only work if you have increased economic and political union – the very thing that nationalism is dead against.”

However, Salmond, and in particular his deputy, Nicola Sturgeon, have thrown the proverbial spanner in the works. They have claimed that if a currency union is refused, then Scotland will be forced to default on its share of the UK debt (£81 billion, to be precise), and therefore, in the words of Ms Sturgeon, “would leave [Westminster] to pick up the entirety.” Not cool, guys, not cool. This appears to be their ace card at the moment, hence Cameron accusing Salmond of having no plan B. If Scotland are kicked out of the sterling party, and then do default, the markets will lose confidence faster than Begbie can start a pub fight. In fact, many banks may be forced to just move to south of the border, which would be awkward now, wouldn’t it?

There are a few arguments in favour of an independent currency for Scotland. The first is the Irish pound, which existed for 91 years until 1999, and was separate but in most senses identical to sterling. Following on from this, Dominic Frisby has made the case that Scotland’s economic successes came under a separate system of money to sterling, during the 18th, 19th and 20th centuries, so why wouldn’t this happen again? It’s a risky gamble, but it could pay off.

The third possibility, and one Salmond appears to be relying on, is staying in the EU and joining the Eurozone. However this week the President of the European Commission, Jose Manuel Barroso, has stated that it would be “very difficult, if not impossible” for Scotland to get the agreement of all EU states to join the bloc. Salmond, confident as ever, has disregarded this, stating that exclusion flies in the face of the fundamental principles of the EU. The main problem Barroso sees is Spain’s opposition, as Kosovo learned the hard way, because allowing Scotland independence would give encouragement to separatists in Catalonia and the Basque country. In any case, if Scotland does join the Euro, it would be forsaking the independent monetary policy Salmond claims it desires. Orders would come from Frankfurt, not London: a welcome change perhaps.

The currency issue is just one stop on the long track (I’m sticking with this analogy) to the final destination of the Referendum. Clearly, currency is complicated enough, but at the same time is being made to seem too simplistic by politicians who are sloganeering and by doing so are resting their campaigns on their personalities, not the issues at hand. It’s a long trip ahead, and no doubt we’ll all be exhausted by the end of it. I just wish the Debate Train would arrive sooner than predicted. Maybe we should have gone by car.

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