Sturgeon is humiliated as hopes of an independent Scotland clinging to the pound are deemed “unviable.”
According to a previous Government white paper, NICOLA STURGEON’s plans to utilize sterling as Scotland’s currency after independence would “not be viable.”
Ms. Sturgeon indicated this week that she intends to gradually ease Scotland out of its coronavirus restrictions. Following Boris Johnson’s lead, the country will proceed in lockstep with its southern neighbor, although with certain “modifications.” While Mr Johnson has warned English citizens to use caution while wearing face masks, Scotland’s First Minister expects Scots to continue to do so.
Certain restrictions on physical separation and group gatherings, both indoors and outdoors, will remain in place.
Ms. Sturgeon and her Scottish National Party (SNP) are sketching up plans to leave the UK as the country slowly emerges from lockdown.
An Indyref2 is high on the SNP’s agenda, with the party’s support bolstered by the epidemic and Ms Sturgeon’s success in the Holyrood elections in May – just one vote short of a majority – further adding to the party’s momentum.
Between where Scotland is now and where it aspires to be post-independence, there are many barriers to overcome.
One of the most important, if not the most important, problems is currency and what kind of currency Scotland would use if it left the Union.
Ms Sturgeon stated that the UK would use sterling for “as long as necessary.”
However, a Government white paper prepared by the Economic Affairs Committee in advance of the 2014 independence referendum stated that this is “not a viable alternative.”
“Choosing a currency is undoubtedly the most crucial economic decision an independent Scottish Government would have to make,” it said.
The Bank of England would continue to set monetary policy if an independent Scotland kept sterling.
“However, this has ramifications for Scotland’s banking sector regulation, which in turn is likely to have implications for tax and spending policies,” says the report.
While an independent Scotland could continue to use sterling without the permission of the rest of the UK, in the same way that some Latin American countries have adopted the US dollar and Montenegro has adopted the euro, the country would be without a central bank and would have no access to or influence over the Bank of England.
Scotland, on the other hand, has a sizable financial services sector that relies on central bank services.
As a result, currency substitution “is not a viable option” for a country like Scotland, according to Professor Jim Gallagher, previously of Nuffield College, Oxford.
John Swinney, who is presently Scotland’s Deputy First Minister. “Brinkwire News in Condensed Form.”