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04 February 2012

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Alan Weir

Brian: I am not an economist so forgive any naivety here as I try to understand the argument. It seems that the debate about the economics of independence can be roughly divided into a debate about what one might call start-up costs and then a debate about how an independent Scotland would fare once up and running, as it were. If I've understand some of the other things you have been saying aright, you accept that an independent Scotland could be even more prosperous than in the UK, as with other small north European states; but the key difference is they have been independent for some time. If the birth of an independent Scotland was a difficult one, economically, then it might set Scotland off an a track of lower growth and prosperity than rUK rather than parity or better. Is that right?


Does that mean, then, that you think if the first few years of an independent Scotland were even just satisfactory, on the economic front: the fiscal deficit/GDP remained below the rUKs, as it mostly has been recently, Scotland stayed inside the rules set by BoE without having to introduce austerity measures, there was no flight of capital, business waited to see how things went etc. If this lasted say 5-10 years (I think the Irish Free State and Australia used sterling for about this period before launching their own, sterling-pegged, currencies) is it your view that the prospects would be good for an independent Scotland being at least as prosperous as in the UK?


If so, the debate seems to come down to the likelihood of a traumatic birth yes? I can't follow the technical arguments re currency very well but I don't really see why a traumatic birth is likely. Volatile oil prices while the country has no reserves and no financial tack record as yet, that would be a problem. But the likeliest cause of volatility seems to be Middle East troubles: Israel attacking Iran, say, and isn't that likely to put prices up?

Or is the worry that unionist Scottish business people would pull out without waiting to see how we fared, or that rUK would pull up the bridges, a bit like the pre-1707 situation? Whatever the economic plausibility of that, it would be a strange line for unionist politicians to sell to the Scottish people: Scotland has every chance of being a prosperous success in Europe, except we are going to do our damnedest to sabotage it!

Alan

Mark Cowan

Please forgive my lack of knowledge as I find some of the more intricate workings of government and politics rather daunting. However there are some things that I occasionally pick up on.

It does make me laugh when hearing talk of Scotland keeping the pound and how they would go about this arangement. Also the assumption that Scotland would struggle as an independant country. Others have already pointed to our Scandanavian neighbours as examples, but I would also like to point out the fact that Guernsey, Jersey, and Isle of Man all have their own printed currency based on the Pound, and they too have independant governments. Also they are part of the British Isles but are not part of the European Union. They do rather well don't they?

Another point that is brought up is that of Scotland having to re-apply to be part of the European Union. If this were the case then the "New UK" would also have to re-apply as a different entity from the one that had negotiated it's membership previously.

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