dunroving

I don't think so - in the article you provided a link to, the sentence I pointed you at says "The Slovak currency devalued by 10 percent in mid-1993 and remained weaker than the Czech crown until Slovakia's euro entry in 2009."

neilcumming

Yes you are correct it did devalue but my orignal point is that it can be done and in my opinion this what the SNP plan to do.Keep sterling then if we are allowed to re-join EU ,convert to euros.I would prefer to have our own currency but keeping sterling or having the euro would be much better for trade relations.

scrubbedexpat099

I thought this was about Independence?

Scotland could trade in Euros as well, no need to join the EU.

dunroving

Hmmm, the R4 program I heard was making the very point, based on the Czech-Slovak situation that this would not be possible.

The Czech Republic and Slovakia essentially kept a tied currency, but with very poor agreements in place regarding how their economies would be tied. That is what led to the currency link "failing".

For this reason, "the SNP" (should really say "whoever is in government at the time" - which IMO won't be the SNP) only has two choices if they want to keep "the Pound":

They will have to cede sovereignty of various economic controls to the BOE, because the BOE won't agree to a link without this.

Create a new currency called the Scottish Pound, but it would not be linked with Pound Sterling.

The SNP can't just decide to continue with a pound that is linked to the Pound Sterling without the permission of the BOE.

And although I am sure he'd love to, I am sure the BOE wouldn't agree to a Scottish Pound note with "the Salmond" on it.

holly_1948

Well, yes they could.
But doing that would not be a shared currency but rather a "dollarisation".
Which is to say that (without permission of the BoE) Scotland could not have it's own central bank and so could not issue money to cover government debt or stimulate the economy. It is a huge financial penalty.

Ecuador does that, the big advantage is that if you don't have your own central bank then it is not vulnerable to corruption. Those who have it in mind to "direct and guide" the central bank for their own benefit would not regard that as an advantage!

Or they could have an arrangement like Gibraltar with its Gibraltar Pound which is exchanged at par with sterling.

What you can't do is to keep another country's currency at par and also run your own economic and fiscal policies. One or the other.

dunroving

Yep, essentially if it's not linked "officially" via the BOE with the Pound Sterling (I'm not an economist so don't know the exact terminology for the two things), the BOE wouldn't bail Scotland out if their economy went belly-up.

I'm pretty sure when I lived in the Bahamas the Bahamian dollar was linked to the US dollar in the way you described above. The exchange rate was 1:1, and you could use USD in the Bahamas (but not vice-versa!). The Bahamian dollar was much prettier.

Steve_

Like the Isle of Man, Jersey and Guernsey which is another example the SNP keep using which is also bonkers. Only a fool would suggest that the UK couldn't lead them around by the nose if it wanted to. The only reason they don't is because so many people in Westminster want their off-shore trusts to avoid inheritance tax.

Steve_

There are lots of problems with using a foreign currency if you have no control over it, the ECB has been cracking down on places like Kosovo and Montenegro for awhile now with currency transactions to stop various shady things from happening.

Look at the list of countries that use the USD other than the US they're either tiny or crap, with the exception of Saudi Arabia, because of the oil exports: http://en.wikipedia.org/wiki/Interna..._the_US_dollar

They could have their own currency I suppose like Denmark has and be in the ERM, but that doesn't even seem to be on the table.

Other than controlling your borders, controlling your economy is the real sign of independence.

holly_1948

It's not.
Such a concession could, and would, be vetoed by Spain; that much is certain. If Scotland wishes to be in the EU it must adopt the Euro.
The only other (uncertain) possibility to be in the EU is to retain the pound sterling and allow the UK to dictate the economic, financial and taxation policies of Scotland.

The Denmark model is out. The Norwegian model is a possibility, not a certainty. Norway is in the EEA but not the EU.

scrubbedexpat099

To adopt the Euro and join the EU would be forsaking the Independence that this all about, so surely that is neither logical nor a goal.

fuchs01

This issue now popping up over currency, will confuse the pre voting stats,
Both sides the yes and no votes will be awash with uncertainties.
Again the clans will be split, Altimarlach battle to be rekindled.
Hey Macgregors,Campbells, and Colquohouns prepare your Claymores. Biodags,
not forgetting yeh broggit-staff once more.
Forget the Macdonalds, theres only big-mac and hes lost his nuggets.
Be certain when hacking away and defending yor names, beware and keep yor hospitality,
Ya not barbarians....

neilcumming

Whatever your smoking ,I want some of it!

SultanOfSwing

Every post you make is a searing indictment of the Scottish education system. Perhaps they aren't ready for independence after all ...

Yorkieabroad

Now, now, you know the Tories sent all the bad teachers up to Scotland and kept the good ones all for themselves.....once they get Independence it'll be Einsteins all round.

SultanOfSwing

The sad thing is, there is probably someone who actually thinks that's the case