Nicola Sturgeons independence dream could be held hostage by Westminster over currency

Nicola Sturgeon sparks furious row with independence bid

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The First Minister has made no secret of her desire for Scotland to hold an independence referendum by the end of 2023, and possibly rejoin the European Union following a vote. But under the terms of its admission terms, all new EU members must commit to adopting the Euro as their sole currency The SNP’s policy on a post-independent currency is for Scotland to continue using the pound until it is in a position to establish its own.

During the Scottish independence campaign in 2014, the Scottish Government proposed to continue using the pound as part of a formal monetary union agreed with the continuing UK.

Throughout the same campaign, the idea of a Scottish/UK currency was rejected by all three major UK political party leaders at the time.

Scotland also has the option of joining the Euro after independence but Ben Harris-Quinney, Chairman of the Bow Group think tank, has warned Scotland could face a major crisis, regardless of what currency it decides to use.

He told “SNP leaders have talked about joining the Euro, but even if this was possible it couldn’t happen immediately.

“Creating its own currency would be costly, complex, and economically high risk.

“If a new currency was pegged to the performance of the Scottish economy it would likely be weak, and Scottish citizens would likely feel a significant decline in purchasing power leading to further economic deprivation.

“It might be possible for Scotland to continue with the pound sterling, or a derivation of it, but this would be in the gift of the UK Government and would be another negotiating point.”

Mr Harris-Quinney warned while the costs of Scotland having its own currency, splitting assets, and having a trade border with the UK is impossible to predict because of the size of the variables, he suggested it could blow a hole in the country’s economy.

He added: “The costs of Scotland having its own currency, splitting assets, and having a trade border with the UK is impossible to predict with any specific accuracy because the variables are too great.

“It is likely however that the costs of these shifts to the Scottish economy will be very high.

“Scotland, separated from the UK, is a relatively poor country based on its economic performance.

“Twenty percent of Scottish citizens are considered to be living in poverty, and its total national economy of £150billion is worth less than a quarter of London’s economy.

“As an individual nation, it would likely be poorer than countries like Romania or the Czech Republic.”

But earlier this week, an expert claimed Scotland could have a number of currency options at its disposal following independence.

Dr Kirsty Hughes, the founder of the former think tank the Scottish Centre on European Relations, said it would take an independent four or five years to join the EU.

She told The Herald newspaper in Scotland: “SNP currency policy currently says ‘we’ll go for sterlingisation and then we will move to a Scottish currency’.

“Well if we’ve done that in four to five years, then you just join the EU as long as you meet any other criteria as any other member state would.

“If you haven’t done that in four to five years then [there’s] an interesting question.

“It’s unprecedented but it doesn’t mean we couldn’t have a discussion with the EU about it.

“Could you say to the EU we want to stay in the pound for another two, or three or four years, even as we’ll go straight to joining the Euro?”

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