Would an independant Scotland be forced to join the Euro?

Naffa

Naffa

Naffa

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New Statesman said:
Would Scotland be forced to join the Euro?

Osborne uses the most devastating weapon in the No campaign's arsenal.
Scottish First Minister Alex Salmond has pledged to hold a referendum on the euro.

The logic of George Osborne leading the charge against Alex Salmond is slowly revealing itself. The government's trump card is that an independent Scotland could be forced to join the euro, and the Chancellor is the man to play it. He told ITV News last night: "Alex Salmond has said he'd want Scotland to join the euro and you have to ask yourself is that the currency you want to be joining at the moment."

In fact, Salmond's stance on the euro is considerably more nuanced than Osborne suggests. True, in 2009, the First Minister quipped that sterling was "sinking like a stone" and argued that euro membership was becoming increasingly attractive ("the parlous state of the UK economy has caused many people in the business community and elsewhere to view membership favourably"). But that, to put it mildly, is no longer the case and, consequently, Salmond has changed tact. Like Gordon Brown circa 2003, he now states that Scotland will retain the pound until it is in the country's "economic interests" to join the euro.
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http://www.newstatesman.com/blogs/the-staggers/2012/01/euro-scotland-join-osborne

I can't stand George Osborne, but I think he perhaps has a point here. And a question that I haven't seen raised is whether or not the exemption from the single currency, as negotiated by the John Major government in Maastricht, for the UK would mean anything at all if Scotland won independence. I must profess an ignorance as to whether or not the United Kingdom would exist if Scotland broke away, or if it would remain but without the northern most member?

But regarding the topic of the article, I think Scotland, as a full member state of the European Union, would find it difficult, neigh on impossible to resist joining the Euro. Given how clearly it is spelled out in the Maastricht treaty, and it would no longer fall under the UK exemption.
 
I don't see why they'd be forced to use the Euro. They would however be in the "Sterling-zone" until such time as the Scottish people decided otherwise in a referendum (Alex Salmond is on record as saying this), which will bring with it other, similar problems to the euro of using a currency which you have no control over.

I personally don't think the Eurozone will accept any new members unless they meet Merkozy's new rules e.g. a deficit no higher than 3%. That won't happen for a while in Scotland or any other part of the UK. Osborne is just scaremongering (something he did very effectively during the AV referendum campaign), in fact quite the opposite is true imo - the option for Scotland to join the Euro is closed to them for the foreseeable future.
 
This is covered in great detail here

The problem is that currently no-one really knows as these questions have yet to addressed in any meaning full way and are entirely subject to negotiation between the various parties, if a referendum returns a yes result, which seems unlikely anyway.
 
Wouldn't Scotland have to negotiate it's own place into the EU either way?? Seeding from the UK shouldn't automatically give them a place in the EU (otherwise we have a dangerous president in the EU for nation-states to fall apart a bit) so it would be up to Scotland to sort out its own money related affairs.

Can't see them doing anything but join the Euro though (if they leave the union) as the only other options are to retain Scotts sterling (which will remain 1-1 with sterling and be a bit like going to the republic, not all that independent...) or issuing its own currency but not really backed by much (so we'll end up with the pale, ginger Zimbabwe)
 
scorza said:
I don't see why they'd be forced to use the Euro. They would however be in the "Sterling-zone" until such time as the Scottish people decided otherwise in a referendum (Alex Salmond is on record as saying this), which will bring with it other, similar problems to the euro of using a currency which you have no control over.

I personally don't think the Eurozone will accept any new members unless they meet Merkozy's new rules e.g. a deficit no higher than 3%. That won't happen for a while in Scotland or any other part of the UK. Osborne is just scaremongering (something he did very effectively during the AV referendum campaign), in fact quite the opposite is true imo - the option for Scotland to join the Euro is closed to them for the foreseeable future.
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The Sterling Zone is no longer a valid mechanism. while an independent Scotland can continue to use Sterling, it would have two choices....one is to use it in much the same way as Kosovo uses the Euro...having no fiscal power over it, or being able to print their own notes etc.....or enter into a monetry union with the rUK in which case the fiscal responsibilities with regard to currency would largely be dictated by the BofE......

Alternatively they could create their own currency and the mechanisms that go with it, ie a central Bank (although the obvious choices, RBS and Bank of Scotland would have significant issues with being considered) and then pegging that currency to Sterling.

Again, these are issue that the SNP have yet to address.

This what I said in the SC thread that discusses this:


Castiel said:
As for the point raised, currently the BofE licence the ability to print sterling to several UK Banks, what is being said, to my understanding is that an independent Scotland would not be able to continue with those licences because they were no longer part of the UK fiscal mechanism, they would no longer be able to print sterling notes or have a say in the valuation and fiscal policy of another sovereign states currency....Scotland would be free to use the currency (anyone can use any currency they want) but could not, as an independent and foreign nation print notes or influence fiscal policy in the rUK without being in monetary union with the UK and the fiscal constraints that implies....something I'm sure neither you or the SNP want, The BofE dictating fiscal policy to an independent Scotland....

The example they gave was Kosovo and it's use of the Euro without being in monetary union.
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pingwing said:
Wouldn't Scotland have to negotiate it's own place into the EU either way?? Seeding from the UK shouldn't automatically give them a place in the EU (otherwise we have a dangerous president in the EU for nation-states to fall apart a bit) so it would be up to Scotland to sort out its own money related affairs.
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That was my first thought. Wouldn't an independant Scotland have to apply to join the EU first before this question even arose?
 
No one knows what would happen if Scotland vote Yes.

It will be interesting for Scotland though, and quite difficult. Lunacy to adopt the €uro now, and keeping Sterling simply pegs them to another central bank type affair with the BoE.
 
Telescopi said:
Sweden is managing not to.
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The Swedes haven't just fought their way our of another economic system.

The issue is that if Scotland become independent do they:

1) Retain Sterling as a currency, and do we let them? Who makes those decisions and how?
2) Join the Euro?
3) Introduce their own currency?
 
I also disagree it'll be a yes vote, although support has increased I believe the latest polls sit at about 33% support for full independence.
 
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