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Scottish independence: Currency debate explained | |
(about 11 hours later) | |
What currency would Scotland have in the event of independence? It's become one of the big issues, ahead of September's referendum. | What currency would Scotland have in the event of independence? It's become one of the big issues, ahead of September's referendum. |
On one side, the Scottish government says that following a "yes" vote, it's in everyone's interests to share the pound and retain the services of the Bank of England. | On one side, the Scottish government says that following a "yes" vote, it's in everyone's interests to share the pound and retain the services of the Bank of England. |
On the other, UK ministers argue such a deal would essentially see Scotland's monetary policy set by a foreign country. | On the other, UK ministers argue such a deal would essentially see Scotland's monetary policy set by a foreign country. |
It's a debate which has sparked discussion on all sides, from politicians to businesses and the financial industry itself. | It's a debate which has sparked discussion on all sides, from politicians to businesses and the financial industry itself. |
On the day Bank of England boss Mark Carney meets First Minister Alex Salmond in Edinburgh, here's what you should know about the post "yes" currency debate. | On the day Bank of England boss Mark Carney meets First Minister Alex Salmond in Edinburgh, here's what you should know about the post "yes" currency debate. |
The case for a currency union... | The case for a currency union... |
In its White Paper blueprint for independence, the Scottish government says a currency union is vital to let companies go about their business, otherwise there could be a damaging effect in the rest of the UK. | In its White Paper blueprint for independence, the Scottish government says a currency union is vital to let companies go about their business, otherwise there could be a damaging effect in the rest of the UK. |
It's also argued sterling would benefit from Scotland's continued involvement given assets like North Sea oil and gas. | It's also argued sterling would benefit from Scotland's continued involvement given assets like North Sea oil and gas. |
SNP ministers also say monetary unions still leave room for significant differences in fiscal and economic policies. | SNP ministers also say monetary unions still leave room for significant differences in fiscal and economic policies. |
They point to Luxembourg and Belgium, which have been in currency unions for decades but have different tax policies. | They point to Luxembourg and Belgium, which have been in currency unions for decades but have different tax policies. |
The case against a currency union... | The case against a currency union... |
The Westminster government says Scotland already has a working currency arrangement with the rest of the UK - and it's called the Union. | The Westminster government says Scotland already has a working currency arrangement with the rest of the UK - and it's called the Union. |
It says an independent Scotland would face having to agree to (negotiated) constraints on economic policy with the rest of the country. | It says an independent Scotland would face having to agree to (negotiated) constraints on economic policy with the rest of the country. |
The UK government also asks why the rest of the UK should enter into a sterling union with Scotland, when recent experience in the euro area has shown how difficult these agreements are to maintain. | The UK government also asks why the rest of the UK should enter into a sterling union with Scotland, when recent experience in the euro area has shown how difficult these agreements are to maintain. |
They also raise a further scenario. If Scotland failed to a formal deal on currency, it would be free to unilaterally adopt sterling - a situation under which the Bank of England may simply continue on without taking account of Scottish conditions. | They also raise a further scenario. If Scotland failed to a formal deal on currency, it would be free to unilaterally adopt sterling - a situation under which the Bank of England may simply continue on without taking account of Scottish conditions. |
Who is saying what? | Who is saying what? |
Former banking bosses.... | Former banking bosses.... |
Economists and academics.... | Economists and academics.... |
Bankers and business.... | Bankers and business.... |
Politicians and campaigners.... | Politicians and campaigners.... |