http://www.bbc.com/news/uk-29176891
Depending on how the Scottish Referendum is decided on the September 18th, the Scottish economy can be greatly effected. The simple 'Yes' or 'No' vote given to the people of Scotland to become an independent nation will dictate the future of Scotland's economy and currency
Presently, the United Kingdom and Scotland share the same currency with the pound sterling. The Bank of England sets the interest rates and backs the pound. The Treasury gives Scotland's government a three-year funding settlement and allows for the annual budget to divided out. For taxation, Holyrood has the power to vary the income tax but has never exercised these powers.
A 'Yes' vote, would change many parameters of the economic situation. Supports for an independent Scotland have claimed that they wish to establish a currency union with the UK. Political parties however would wish for a Scottish currency or "flexible currency" such as those of Sweden and Norway. The annual budget would have to be raised in Scotland through other means. The taxes would be cut to lure corporations to reestablish in Scotland and by simplified.
In essence a 'No' vote would mean the economy and currency of both countries would continue to progress as always. The tax system would however be controlled and set by the Scottish government.
Overall, the Scottish Referendum will be a huge stepping stone for the progress of the country. The referendum allows for Scotland to part ways with the rest of the UK peacefully if passed. Many other country like states such as Catalonia and Flanders will be looking to the voting outcome tomorrow as well, to see a possible indication of direction in their perspective countries. Whichever the outcome of the decision is to be tomorrow. An united UK or an independent Scotland will have effect how both countries operate and behave with each other.
Joshua Townsend
It is certainly a very interesting thing to think about when you see how close Scotland is to gaining independence. In my opinion, I unfortunately don't think independence would be the best choice for Scotland at the moment. I feel this way because of the division of the vote, which seems to be around 50/50 with the Nos slightly ahead. If the Yeses manage to pull ahead and win, that means that slightly less than half of the country doesn't want to be independent and they are anyway. I think it would be great for them to be independent if the whole country wanted that but a divided Scotland would not be a great place to live.
ReplyDeleteAlso, I would be worried about the economic impact of secession. Scotland has been under the protection of the Crown economically and now they want to break away from this. In this article (address below), it talks about how pretty much all of Scotland's "eggs" are in one "basket" and that "basket" is oil. Scotland has tremendous oil potential but it looks like it might be difficult to make the oil alone cover everything the country needs to fund. Also, it compared Scotland's plan to keep the GBP as their currency to the Euro crisis because, as made clear by the status of the Euro, multiple countries sharing a currency is difficult when there isn't a common budget is very difficult to make successful. I very much look forward to seeing the outcome of this election and I hope the Scots get what they want as a country.
http://www.washingtonpost.com/blogs/wonkblog/wp/2014/09/18/the-3-economic-reasons-scotland-shouldnt-become-independent/
Scotland's independence from the United Kingdom may seem like a good idea in theory but in reality their independence is set to cause a number of problems economically and politically. If independence was chosen in the vote, Scotland would have to develop a new currency relatively quickly. They would no longer be able to use the British pound and they are not part of the European Union so they would not be able to use the Euro. Additionally, independence means Scotland would probably have to reapply to the United Nations as well as apply to the EU. Given, the current state of affairs in the EU, and given Scotland's lack of currency post-independence, gaining acceptance into the EU would be quite difficult for a independent Scotland.
ReplyDeleteGiven that information, I believe the people of Scotland made the right choice in striking down the independence decision.