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June 26, 2016

Scottish Independence and the Krone in my Pocket

In the Scottish Independence referendum in 2014 I voted to remain part of the United Kingdom. Now that England and Wales have voted to leave the European Union, the prospect of another referendum on Scottish Independence is back on the table. I may well change my vote.

I am not saying that I will vote for Scottish Independence, it depends on how much whiplash we suffer from the car crash that is Brexit, but it is now a possibility. I am sure that many people are thinking the same.

The main problem that faces Nicola Sturgeon and the SNP in putting forward another independence referendum is that of currency. It is simply not credible, or feasible, for Scotland to rejoin the EU as an independent country but to share the currency of a country which is firmly outside the EU. The economic policy requirements of the two states will be too far apart for that to be possible, or even desirable.

One option would be for Scotland to join the Euro. The Euro is not the basket-case that Mr Farage would have you believe and this is a feasible option. However, I agree that the public perception of the Euro is hardly a vote winner, and then there is the prospect of having to write a blank cheque to the bailout fund as part of the conditions of joining. A prospectus that includes joining the Euro may not garner the votes that the SNP need.

Perhaps another option would be to adopt the currency of one of the other countries in the EU, but not in the single currency. Sweden or Denmark are the obvious choices. Scotland has strong, centuries-old, connections with these countries, and many of our key industries have strong links too – oil and gas, fish farming, renewables and forestry to name just four.

I am no professor of economics and I don’t know the practical implications of adopting the krona, or krone, but it seems an option worth exploring. Perhaps, in a few years time, tourists will be paying their entry to Stirling Castle in Krone!

Interesting times indeed.