Once again, Mark Carney, Governor of the Bank of England, has made clear the measures needed to make a currency union work successfully and stresses that the EU will be required to build “a form of fiscal federalism” (your report, 12 March).
SNP Treasury spokesman Stewart Hosie says: “I am pleased the Scottish Government’s fiscal commission have described in detail a blueprint for such a successful currency union.”
The oft-quoted Fiscal Commission left no doubt about the conditions it felt were necessary by laying them out as follows:
1. The Scottish Government has a formal input to the Monetary Policy Committee (MPC) of the Bank of England (in other words a member on the MPC).
2. Interest rates set to promote stability across the sterling zone.
3. Financial stability is ensured across the sterling zone on a consistent basis.
4) A joint fiscal (tax) sustainability agreement to govern the level of borrowing and debt within the sterling zone.
Scottish finance minister John Swinney welcomed the conditions but claimed “the Scottish Government would still be free to follow economic policies including taxation to create growth and prosperity”.
I find it difficult to see how an agreement between two parties, as laid out by the Fiscal Commission and welcomed by Messrs Hosie and Swinney, can allow one of those parties the freedom to follow its own economic policies, at one and the same time. In other words, a currency union denies Scotland independence in any meaningful form that any Nationalist would find acceptable.