Scotland Analysis
Author | : Great Britain: H.M. Treasury |
Publisher | : The Stationery Office |
Total Pages | : 124 |
Release | : 2013-04-23 |
ISBN-10 | : 0101859422 |
ISBN-13 | : 9780101859424 |
Rating | : 4/5 (22 Downloads) |
Book excerpt: The UK Government is undertaking a major cross-government programme of analysis prior to the referendum on Scottish independence in 2014. The aim is to provide a comprehensive and detailed analysis of Scotland's place in the UK. This paper examines how Scotland might arrange its currency and wider macroeconomic framework. It reviews the current UK arrangements and examines the options for change. In the event of a vote for independence Scotland would have to establish its own institutional framework, and the current system of risk-sharing would end. An independent Scottish state would have four main currency options: continue to use sterling with a formal agreement with the continuing UK (a sterling currency union); use sterling unilaterally with no formal agreement ('sterlingisation'); join the euro; or introduce a new Scottish currency. This paper examines all these options and concludes that all of them would be less likely to be economically suitable for both Scotland and the rest of the UK.