Scotland faces “huge risks” entering the financial system as a result of Sturgeon’s independence.
NICOLA STURGEON’S aspirations for freedom were dashed after a white paper revealed that the country faces “significant risks” when it enters the financial system after independence.
In the coming weeks, the Scottish First Minister indicated that the country will be moved to level 0 of her government’s five-tier system of coronavirus pandemic restrictions. It means Scotland will follow England’s lead, but in a “modified” fashion. Certain restrictions, such as physical separation and numbers meeting both indoors and outdoors, will remain, according to Ms Sturgeon.
Face masks will also be used in the future.
Ms. Sturgeon and her Scottish National Party (SNP) are sketching up plans to leave the UK as the country slowly emerges from lockdown.
The SNP has long advocated for a second independence referendum, and its victory in the Holyrood elections in May only added to the party’s confidence.
However, a slew of logistical roadblocks remain in the way.
To borrow money, an independent Scotland would have to access the global financial market.
Given the country’s lack of credit history, this will be extremely challenging.
According to a Government white paper prepared by the Economic Affairs Committee prior of the 2014 election, this might put the country’s chances of obtaining external finance at danger.
The research, which was not intended to make a pro or anti-independence argument, looked at the economic ramifications for the entire UK, particularly England, Wales, and Northern Ireland.
It was highlighted that if Scotland left the Union, it would be entitled to a part of the UK’s public debt.
Both countries would have to agree on this because the UK debt could not be “simply changed to allow some to be borne by Scotland.”
“This would indicate a material change in contractual terms and would be a default,” the study stated. It would also take time for a newly independent Scotland to build up enough credit to issue enough debt to cover its portion of the UK’s liabilities.”
“Scotland will have to go into the market [and]it will not have the track record of the UK authorities, the sophistication of our debt management operations, or the extraordinary length of our yield curve, all of which means that it will face quite big risks,” former Permanent Secretary to the Treasury Nick Macpherson told the paper.
It was also not obvious, according to Professor David Bell. “Brinkwire News in Condensed Form.”