Interesting article on ThinkScotland about the SNP's decision that keeping the UK £ circulating in Scotland post independence is now the official Plan B.
I am glad to see they are taking my advice. On the other hand Paul Krugman, a well known leftist economist and thus the sort governments like is quoted.
"Indeed, he warns, a ‘currency tag-along’ Scotland “would be in even worse shape than the Euro countries, because the Bank of England would be under no obligation to act as lender of last resort to Scottish banks — that is, it would arguably take even less responsibility for local financial stability than the pre-Draghi ECB. And it would fall very far short of the post-Draghi ECB, which has in effect taken on the role of lender of last resort to Euro zone governments, too.“
What would happen, he goes on to ask, if something goes wrong, if there’s a slump in Scotland’s economy? “As part of the United Kingdom, Scotland would receive large de facto aid, just like a U.S. state (or Wales); if it were on its own, it would be on its own, like Portugal."
“Now, Scotland would presumably have high labour mobility — assuming it manages somehow to join the EU … it would be under the Single European Act, and it sort of shares a common language with England.'
“But that’s not necessarily a good thing: what we’re seeing in places like Portugal is large-scale emigration of young workers, leaving a diminished population to bear the fiscal burden of caring for the elderly."
So even following my proposed Plan B is not, in the opinion of the SNP's favourite economist, as good as maintaining the union.
I am glad to see they are taking my advice. On the other hand Paul Krugman, a well known leftist economist and thus the sort governments like is quoted.
"Indeed, he warns, a ‘currency tag-along’ Scotland “would be in even worse shape than the Euro countries, because the Bank of England would be under no obligation to act as lender of last resort to Scottish banks — that is, it would arguably take even less responsibility for local financial stability than the pre-Draghi ECB. And it would fall very far short of the post-Draghi ECB, which has in effect taken on the role of lender of last resort to Euro zone governments, too.“
What would happen, he goes on to ask, if something goes wrong, if there’s a slump in Scotland’s economy? “As part of the United Kingdom, Scotland would receive large de facto aid, just like a U.S. state (or Wales); if it were on its own, it would be on its own, like Portugal."
“Now, Scotland would presumably have high labour mobility — assuming it manages somehow to join the EU … it would be under the Single European Act, and it sort of shares a common language with England.'
“But that’s not necessarily a good thing: what we’re seeing in places like Portugal is large-scale emigration of young workers, leaving a diminished population to bear the fiscal burden of caring for the elderly."
So even following my proposed Plan B is not, in the opinion of the SNP's favourite economist, as good as maintaining the union.
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