Scottish independence: Currency union ‘possible’

'No simple and obvious choice for a Scottish currency'. Picture: Phil Wilkinson

'No simple and obvious choice for a Scottish currency'. Picture: Phil Wilkinson

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THERE is no simple and obvious choice for a Scottish currency under independence, a leading Scottish economist has claimed.

Professor Jeremy Peat, former chief economist for the Royal Bank of Scotland and an ex-Treasury and Scottish Office economist, said the SNP government’s Plan A of a continuing currency union can not yet be ruled out, despite the rejection of all the main UK parties, but it would constrain Scotland’s fiscal policy. Using sterling without a union is seen as “wholly implausible, dangerous and highly unlikely to be optimal”, he said.

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The euro “might appear desirable in the fullness of time” as it was perceived to be before the eurozone crisis, but it will not be available at the point of independence and will come at a cost, he added.

There is nothing to stop Scotland establishing its own currency but “some time would be required if this were to be a smooth process with the minimum of disruption”.

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