Scottish Currency

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FOR INDEPENDENCE FOR THE UNION
Own currency as interim measure

Prof Gavin McCrone, a former chief economic adviser to the Scottish Office, told MSPs in May that he believed it was "more likely in the end" that Scotland would adopt its own currency "even though it may start with an attempt to keep the same currency"[1]. He added: "On the whole, I think that a separate currency but one pegged to sterling is probably the long-run answer, that's what the Irish did for a long time, then they unpegged it when they went into the European exchange rate mechanism. "Smaller countries very often do that, the Danes for example have kept their own currency but it is pegged to the euro, but that means they can alter it if they really have to."

Advantages

Having its own currency and controlling its own interest rates would provide the greatest amount of currency flexibility[2]

References

  1. BBC News, 7 May 2014
  2. Scotland's Decision: 16 questions (Jeffery & Perman, ed) Question 2 by Angus Armstrong and Monique Ebell: Option 3 (Birlinn)

Own currency as interim measure

Disadvantages

Trade costs would rise[1].

References

  1. Scotland's Decision: 16 questions (Jeffery & Perman, ed) Question 2 by Angus Armstrong and Monique Ebell: Option 3 (Birlinn)