An independent Scotland would face '˜Greece-style' austerity cuts

One of the country's top economic forecasters has warned that if Scotland becomes independent from the UK it would face a huge budget deficit and be forced to make Greek-style austerity cuts.

Keith Brown MSP. Picture: John Devlin.
Keith Brown MSP. Picture: John Devlin.

Douglas McWilliams from the Centre for Economics and Business Research has predicted Scotland could be facing a deficit of 12 per cent of GDP by the time it becomes independent in the event of a Yes vote.

He said: “The only practical option would be cut to public spending.”

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He said the deficit could rise to an unmanageable 12 per cent of GDP due to additional costs of becoming a separate state.

“Because of Keynesian multiplier effects, there would need to be cuts of about 15 per cent of GDP. That’s roughly on the scale of what has happened in Greece, which has led to a fall in GDP on a quarter.”
The prediction comes as pro-independence campaigners predicted a second independence referendum will be called within weeks.

Business for Scotland has just launched a fundraising drive, asking members to help pay for a new independence referendum campaign.

A spokesman for Keith Brown, the Scottish Government’s economy secretary said: “Latest actual figures show that productivity - the key driver of economic performance - is growing four times faster in Scotland than the UK. A hard Brexit will put this at serious risk.”