Economists write in the FT - Scotland can't have both the pound and genuine independence

There is an excellent set of assessments by leading economists of the currency options for an Independent Scotland in the Financial Times here.

The six contributors, several of whom have strong Scottish credentials, are:

Dame DeAnne Julius, former Monetary Policy Committee member and Bank of England court director

Sam Bowman, research director at the Adam Smith Institute

* Professor Anton Muscatelli, University of Glasgow

Tony Yates, Reader in Economics at University of Bristol

* Angus Armstrong, director of macroeconomics at the National Institute of Economic and Social Research

* Ronald MacDonald, professor, Adam Smith chair of political economy, University of Glasgow

They don't all have the same view of the merits of the different options, but all of them have interesting things to say.

The main view common to most of these economists, if expressed in significantly different ways, is that if Scotland wants to have a form of Independence which means very much, they should go for a new separate currency for Scotland.

What follows here is my own opinion, but if you follow the link above you will find it is not out of line with most of the arguments in the FT article.

The leader of the Scottish Labour party said a few months ago, and it is one of the few statements by a Labour politician that I strongly agree with, that "Yes" campaigners who want to keep the pound are like someone who is initiating a divorce but who wants to keep the joint bank account.

The idea that Scotland could follow the sort of radically different economic strategy from the rest of the UK which First Minister Salmond says he wants, while keeping the pound, is straight out of cloud-cuckoo land. That applies whether or not there is an agreed currency union.

An agreed currency union would require mechanisms to co-ordinate the two economies, just has the Euro has (and they have not worked very well). For Scotland to keep the pound without such an agreement would amount to surrendering even the share in control over their currency that they have now.

The inconsistency at the heart of the "Yes" campaign between their plans for an independent economic policy and wish to retain a currency union is not just glaring but pitiful and amounts to an insult to the intelligence of the people of Scotland.

Unlike either the SNP or UKIP, I am consistent in my attitudes to Britain as part of the EU and Scotland as part of Britain. Just as I have argued for nearly two decades that if Britain wants our own economic policy we need to keep the pound rather than join the Euro, if Scotland wants to have an economic policy separate from that of the rest of Britain, they too need their own currency.

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