Scottish independence: Scotland ‘would need its own currency before joining eurozone’

AN INDEPENDENT Scotland would need to create its own currency before it could join the euro, it has been claimed.

Under the SNP’s post-split plans, Scotland would use sterling before holding a referendum on the euro when economic conditions are favourable.

But Drew Scott, a professor of European Union studies at Edinburgh University, told the Commons Scottish Affairs Committee there was no legal basis to move to the euro directly.

He has frequently rejected claims that an independent Scotland would be denied entry to the European Union, but he said the SNP policy of retaining sterling would mean the country would not meet the criteria to join the euro.

He said: “We would have to have a separate currency. As far as I’m aware, the Government’s position in Scotland is to retain sterling as its currency.”

He added: “We have to be in the Exchange Rate Mechanism for two years and show stability within the ERM. Self-evidently, in 2014-2016, without a separate currency, it could not meet that condition.

“Technically, it would violate the Copenhagen Conditions to get into the single currency. It could not join. It would have to have a currency for two years, under present rules.”

Committee convener Ian Davidson asked: “If Scotland wished to join the euro, post-separation, there’s a stage when Scotland would have to have its own currency?”

Mr Scott replied: “That is certainly the case just now, unless they timed it with the UK and the UK decided to join.

“But leaving that aside, if Scotland wished to join the euro, then under the treaty just now, strictly interpreted - and this may change because treaties can change - it would have to have its own currency.”

Mr Davidson asked if there was a way Scotland “can move directly from one to the other”.

Mr Scott said: “(Not) without the agreement of all member states. It’s conceivable that Scotland could go along and plead a special case and the other 27, or however many there are, could agree on a protocol to amend the treaty for that one case. That’s perfectly feasible legally.”

The committee also heard from Patrick Layden QC, a member of the Scottish Law Commission, who said provisions could be made for Scotland to join the euro, just as provisions may have to made to allow Greece to leave the euro.

He said: “At the moment there is no provision in the treaty for somebody to withdraw from the euro.

“But all it takes is 27 chancellors of the exchequer sitting round a table and saying: let’s have a protocol for Greece withdrawing gracefully from the euro. And it will become European law, and therefore it can happen.”