Nicola Sturgeon requests a second Scottish independence referendum, important questions include the type of currency the country will use after leaving the union. ..
Yesterday, Boris Johnson wrote to the first minister to reject the request forIndyRef2. However, after the Prime Minister's resignation, Downing Street is facing turmoil, and the Scottish National Party (SNP) plans to double its voting bids.
And the two governments also clashed over the currency that Scotland would use if the sturgeon succeeded in her independent bidding.
Money Talk
Prior to the 2014 independence vote, the British Conservative Partyofficially if Scotland chooses to do it alone. Excluded the creation of a currency union.
However, the Scottish Government argued that maintaining a monetary union with Britain would be beneficial to both parties . In the 2013 White Paper"The Future of Scotland," Holyrood leaders said, "The use of Stirling brings continuity and certainty to businesses and individuals. And independent Scotland will make a substantial contribution. " To the sterling area. "
Assuming that the ruling Scottish National Party (SNP) has vowed to rejoin the EU after winning independence, another option is to adopt the euro. However, according to , according to the 2021 treatise by , the think tank of the Government Institute (IfG) states: This is because "for independent Scotland" and "formal procedures that candidate members must go through" include "demonstrating that the currency's value to the euro can be maintained for two years".
Therefore, the newly independent Scotland will have to choose between "informally adopt Stirling or launch a new floating exchange rate currency," IfG said. I concluded.
"Meaningless"
Informally adopting the pound sterling is likely to be Scotland's only route to maintain the pound and a reliable currency It has the short-term benefits of maintaining and maintaining investment.
"Political, this doesn't make any sense," Robbie Mochrie argued inTheNational. According to Mockley, the British government insisted that "the central bank of Scotland must be under the supervision of the Bank of England", effectively depriving it of its independence.
However, floating exchange rate currencies also cause short-term problems, and there is uncertainty about the direction of independent Scotland. According to IfG's treatise, "the lack of a cautious fiscal and monetary policy track record" creates uncertainty and volatility, leading to high borrowing rates and potential investment shortages in Scotland.
However, in the long run, the floating exchange rate system will allow the Scottish government to control monetary policy, and over time, "building up and managing foreign exchange reserves. You will be able to do that exchange rate "– an important requirement to participate in the Eurozone. It is also important to maintain low trade barriers with the UK, according to think tanks.
According to Mochrie, "it is possible to establish a new currency with a central bank within five years." "It's much better for Scotland to become a currency issuer and for the government to have access to all the tools of monetary policy."
"In the crisis, Scotland will be like Britain after the financial crisis and, if necessary, can stabilize the economy with much lower unemployment," he concludes.
