Deutsch bank chief warns of dangers of Yes vote

John S'winney says the report did not take into account that Scotland is one of the world's wealthiest nations. Picture:'' Neil Hanna
John S'winney says the report did not take into account that Scotland is one of the world's wealthiest nations. Picture:'' Neil Hanna
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SCOTTISH INDEPENDENCE: The financial and economic arguments against Scottish independence are “overwhelming”, a leading bank warned as it compared a Yes vote to the mistakes which led to the Great Depression of the 1930s.

In one of the starkest warnings yet issued by a financial institution, the chief economist at Deutsch Bank David Folkerts-Landau said voters and politicians had failed to grasp the potential severity of the negative consequences of separation.

He said he found it “incomprehensible” that Scots were even contemplating withdrawal from the United Kingdom, and pointed to the “recessions, higher taxes, lower public spending and higher interest rates” that had afflicted nations seen as potentially heading for the eurozone exit.

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But the Scottish Government accused him of failing to take into account Scotland’s “strong fiscal position”, and said it would start life as an independent nation “from stronger economic foundations than any other nation in history”.

In a highly-critical analysis of the prospects of independence, Mr Folkerts-Landau said: “Everyone has the right to self-determination and to exercise his or her democratic rights.

“But there are times when fundamental political decisions have negative consequences far beyond what voters and politicians could have imagined. We feel that we are on the threshold of one such moment.

What currency options would an independent Scotland have?

“A Yes vote for Scottish independence on Thursday would go down in history as a political and economic mistake as large as Winston Churchill’s decision in 1925 to return the pound to the Gold Standard or the failure of the Federal Reserve to provide sufficient liquidity to the US banking system, which we now know brought on the Great Depression in the US.

“These decisions - well-intentioned as they were - contributed to years of depression and suffering and could have been avoided had alternative decisions been taken.”

But a spokesman for Scottish Finance Secretary John Swinney said: “With a Yes vote on Thursday, Scotland will become independent from stronger economic foundations than any other nation in history.

‘Scotland is one of the world’s wealthiest nations’

“Scotland is one of the world’s wealthiest nations, with wealth per head higher than France, Japan and the rest of the UK - however for far too many people it doesn’t feel that way.

“We already have well established institutions, solid economic foundations and according to the Financial Times will start life as an independent country from a strong fiscal position.

“This report would appear not to take account of any of that, at a time when more and more people in Scotland are waking up to the fact that we can, we should and we must vote Yes for a more prosperous country and a fairer society.”