Scottish independence: New currency ‘real option’

Contributors noted that Scotland already prints its own bank notes. Picture: TSPL

They said that an independent Scotland would find it easier to have its own currency because Scottish banks already issued their own banknotes.

And a Scottish currency could be pegged against the euro in the same way that the Swedish krona is.

The claims were made at an event hosted by the Royal Society of Edinburgh (RSE) yesterday.

Organised jointly with the British Academy in London, economists and academics were invited to debate the issue of currency, banking and financial services under independence.

The debate was reported on under “Chatham House rules”, with contributors’ comments recorded anonymously.

The report of the event said “the point was made that, potentially, it would be even easier for Scotland to have its own currency in the event of separation from the UK, because Scottish banks already issue banknotes”.

The claim came despite a warning from the UK Treasury earlier this year that the Bank of England could withdraw its backing for Scottish banknotes if Scots voted for independence next year.

Experts at the event said a separate currency in an independent Scotland could be pegged against Europe’s single currency, and they highlighted the example of Sweden.

“Sweden offers an example of one which has a currency that floats loosely against the euro,” the report of the RSE and the British Academy said.

However, the experts warned that the prospect of an independent Scotland joining the euro “does not provide a sensible long-term basis for economic policy”.

It was further suggested an independent Scotland could retain the pound for a decade, before later having its own currency.

The point was made that it might be sensible for Scotland to “agree a currency union for the first ten years or so, with the proviso that this might change”, the report said.