[Closed] Scotland to help pay deficit - even if independence goes ahead

Spin or not, the EU thing is a good example of mis-information, unsporting behaviour, tactics - all the things that we love politicians for. Sadly I think this will only get worse.

The EU is pretty clear on how new states are dealt with. The problem was promising something up-front which you cannot deliver - bit like currencies etc...

I can see a lot of movement of the affluent or most highly qualified people out of Scotland and into the rest of the UK if independence does go ahead.

Yeah but I can also see this happening as O&G winds down in the next few decades.

It would be interesting to see yes/no voting tendencies against education/income/job/industry type stats though.

There is no EU policy on what to do when a member state splits. If there was, we would have had it produced by now.

The Spanish. They could kill this one stone dead by explicitly stating that they would veto Scottish membership - after all, what have they got to lose? So - why haven't they done exactly that?

And why hasn't the UK Govt. gone to the EU and asked for the answer we all want? If it was guaranteed to kill the argument, what is the delay?

oldnpastit - Member

Like it or not, there's no real uncertainty over rUK membership of the EU. If there was, then we would also be getting a referendum.

Er, you [i]are[/i] getting a referendum on EU membership.

mogrim - Member

I don't doubt the UK government is doing as little as possible to cooperate with the Yes campaign, but on this point at least the answer is clear - the Spanish government explicitly asked the EU about this point a couple of months back (regarding Catalonia) and there is no automatic EU membership.

Which doesn't answer the question of what actually will happen.

Here's a question ... who wrote these words?

"it seems pretty likely that Scotland would be an EU member state, probably after an accelerated set of accession negotiations. Precisely what the conditions of membership would be is not quite so clear, though immediate requirements to join the Euro or Schengen agreement can surely be avoided."

(a) Alex Salmond (Scottish First Minister)
(b) David Cameron (UK Prime Minister)
(c) Professor Jim Gallacher (formerly the UK's most senior civil servant responsible for devolution, and recent appointee as adviser to Better Together on policy and strategy)

Tactics, Scotroutes, tactics!!

They are learning the game from that master (sic) politician on the other side who appears to be simultaneously losing it. 😉

There is a massive trump card for the better together camp to play, but they are being sensible and biding their time. Perhaps wait to counter the CW games effect.

Yes campaign uncertainty on EU membership is immensely damaging to businesses in Scotland. But UK uncertainty on EU membership because of the referendum?

That just the greedy financial speculators in the city looking for any excuse to turn a fast buck at the expense of others.

The problem is simple Scots, either you want independence or you don't. Once we've established that then we can have a debate on EU membership, currency, North Sea Oil etc.

Otherwise what do you suggest we do? Get all this sorted upfront at huge expense to the taxpayer only to have Scotland vote for no independence. What a huge wast of money and resource that would be at a time when austerity is needed.

The principle of independence surely is all about the grand plan to govern yourselves and control your own destiny as a Nation going forward? It's not to pick and choose what you want or don't want from the UK/EU and then see which way the wind is blowing come your day to vote on the issue?

scotroutes - Member

robbespierre »
The UK government has been dominated by Scots for (most of) the last 20 years,

Really? How many of the government MPs have, at any one time, been Scottish?

That's irrelevant.
What matters is how many Scots were senior members of the cabinet?

[quote=robbespierre ]

scotroutes - Member
robbespierre »
The UK government has been dominated by Scots for (most of) the last 20 years,
Really? How many of the government MPs have, at any one time, been Scottish?

That's irrelevant.
What matters is how many Scots were senior members of the cabinet?

On second thoughts, maybe you do need us to look after you after all

BBSB - I was going to suggest that "the cream rises to the top", but then so do certain types of turd.

creamy ones?
like the top picture?

scotroutes - Member

robbespierre »
scotroutes - Member
robbespierre »
The UK government has been dominated by Scots for (most of) the last 20 years,
Really? How many of the government MPs have, at any one time, been Scottish?

That's irrelevant.
What matters is how many Scots were senior members of the cabinet?
OK - how many? And who voted them into that position?

As you well know, the number varies over time but we were way over-represented for our population - I would guestimate by something like 2-3x on average. Also, the government and policies for most of that period were exactly what Scotland voted for, yet we are now blaming the consequences on that bad "UK Government".
As a Scot, I find this embarassing.

Unless the Scots in the cabinet were making decisions that favoured Scotland over the rest of the UK, I don't see how the national make up of the cabinet makes any difference.

rebel12 - Member

The problem is simple Scots, either you want independence or you don't. Once we've established that then we can have a debate on EU membership, currency, North Sea Oil etc.

The scots would like some idea of what they're voting for- one thing both parties agree on. We're british too you know, we've as much right to the attention of the UK government as anyone else.

I thought that was all in the book of dreams!!!

Sorry cheap shot. I largely agree. Having policies made/proposed on the hoof does no one any good as this week has shown.

mogrim - Member
I don't doubt the UK government is doing as little as possible to cooperate with the Yes campaign, but on this point at least the answer is clear - the Spanish government explicitly asked the EU about this point a couple of months back (regarding Catalonia) and there is no automatic EU membership.

Northwind - Member
Which doesn't answer the question of what actually will happen.

POSTED 1 HOUR AGO # REPORT-POST

It sort of does - there's no automatic membership, and Scotland will/would need to negotiate entry. Of course the rules could easily be changed/fudged to accommodate a newly independant Scotland, but as it stands it's not a given.

scotroutes - Member
There is no EU policy on what to do when a member state splits. If there was, we would have had it produced by now.

The Spanish. They could kill this one stone dead by explicitly stating that they would veto Scottish membership - after all, what have they got to lose? So - why haven't they done exactly that?

According to [url= http://www.independent.co.uk/news/uk/politics/spain-could-wield-veto-over-scotlands-eu-membership-6292846.html ]The Independant[/url] they are considering it, but I doubt they're in any hurry to reveal their cards - despite the Catalan government pushing for a referendum they don't have the authority to do so, and by playing for time the national government should be able to benefit from an improvement in the Spanish economy.

[quote=mogrim ]
there's no automatic membership
Nor is there an automatic exclusion. There is nothing in any of the EU treaties to cover this situation.

scotroutes - Member
There is no EU policy on what to do when a member state splits. If there was, we would have had it produced by now.
The Spanish. They could kill this one stone dead by explicitly stating that they would veto Scottish membership - after all, what have they got to lose? So - why haven't they done exactly that?

Spain has indicated it [b]could[/b] block an independent Scotland's accession to the European Union, [b]sources[/b] said.

I believe there were 5Scots in the cabinet at one time . I don't see any of them campaigning for independence and 3 I know are against. Brown, Darling, Wilson. So yes at that time Scotland voted for mostly labour in a UK election.Labour was and is a unionist party. Since then Scotland has voted in the SNP twice. That's at least partly because people felt let down by labour. There's no reason for keeping on going with something that has not worked.

Dated 22nd January 2012 Why the wait?

What's the hurry? Currently there's no need to do anything, far better to let FUD do its work.

mogrim - Member

It sort of does - there's no automatic membership, and Scotland will/would need to negotiate entry.

Proves my point really- the fact that there's no automatic entry doesn't necessarily mean entry has to be negotiated. (it could, for example, simply mean that the standard criteria need to be met- since of course a seceeding state could be an economic basket case, offering automatic entry would be dangerous but offering fast, qualified entry would be sensible) Also doesn't tell you anything about timescales, processes- and that's really important, since it'll take time to disengage Scotland from the UK too, so it's entirely possible that even with a qualification process, transition from UK-EU to Scotland-EU is seamless just by matching timelines.

According to Von Rumpey (who I would hope knows this things) Scotland would go through the full EU application process and that this can only happen when and if Scotland becomes an independent state (December 2013). What more is there to know at this stage? I appreciate that the book of dreams got this wrong, but nothing new there.

And adoption of the € would require an independent central bank. So that would also be a staged process.

According to The Independant they are considering it, but I doubt they're in any hurry to reveal their cards - despite the Catalan government pushing for a referendum they don't have the authority to do so, and by playing for time the national government should be able to benefit from an improvement in the Spanish economy.

There's no reason for keeping on going with something that has not worked.

Sorry, but that's exactly the thinking I disagree with.
Germany ended up with Hitler through disillusionment with the traditional parties and "Anything must be better than this" thinking.
All IMHO 😉

Germany ended up with Hitler through disillusionment with the traditional parties and "Anything must be better than this" thinking.

Well that's you lost the argument 😉

[url= http://en.wikipedia.org/wiki/Godwin%27s_law ]Godwin's Law[/url]

[quote=teamhurtmore ]According to Von Rumpey (who I would hope knows this things) Scotland would go through the full EU application process and that this can only happen when and if Scotland becomes an independent state (December 2013).
What part of the EU treaties did he quote?

According to Von Rumpey (who I would hope knows this things) Scotland would go through the full EU application process and that this can only happen when and if Scotland becomes an independent state (December 2013). What more is there to know at this stage?

Why would the remnant of the UK automatically be exempt from the full EU application process? As a newly constituted state it would no longer be the one that originally acceded, after all. The name "UK" would also be in line for some amendment.

teamhurtmore - Member

According to Von Rumpey (who I would hope knows this things) Scotland would go through the full EU application process and that this can only happen when and if Scotland becomes an independent state (December 2013). What more is there to know at this stage?

The president's opinion is not the EU's word or rule. I know a lot of euroskeptics seem to think it's a dictatorship mind...

[Quote/]whatnobeer - Member

Germany ended up with Hitler through disillusionment with the traditional parties and "Anything must be better than this" thinking.

Well that's you lost the argument

Godwin's Law

Oops!! 😉
I fell right into that one!

I think the political parties are largely to blame for the disillusionment.I lived in a poor part of Falkirk and during the last uk election only the BNP and Conservatives showed up in my part of the town. I think its the failure of the parties to engage with large sections of the populace that lets the extremists in. Independence is a first step to bring decision making closer to communities it affects.
Ps I told both BNP and Tory not to come back to my door.

Johnners: rUK would not be a newly-constituted state.

Scotroutes/teamhurtmore: it's not just about EU treaties. There is tons of jurisprudence on what happens to secessionist states that want to apply for membership if intergovernmental organizations. There is nothing new or interesting about Scottish independence from an international law perspective.

And adoption of the € would require an independent central bank.

It would be futile for a small country with two major neighboring regional currencies and a significant USD-denominated sector to have its own central bank and currency. It's not the 19th century any more. You'd never be able to outspend the ECB, the B of E and the markets all at once so why waste money trying?

It may well be futile, but without it you do not have independence re either monetary or fiscal policy. Salmond pretends otherwise. What exactly is it that the yes camp wants?

I would be genuinely interested in your sources re € adoption as my reading of EU notices, the NIESR analysis of Scotlands currency options, the FT and McCrone come to a different conclusion. In that respect, Kosovo and Macedonia are excretions not the rule in my understanding.

Whatever choice it makes, Scotland needs a hard currency. Why? Because to pay for its share of UK debts it will have to issue it's own debt - which makes you wonder why instead of making silly comments, AS isn't out testing the water now? That hard currency could be the £ (most likely plus obvious constraints that come with it), the € (unlikely to be immediate) of the Scottish pound (with standard requirements).

Among the main holders of Scoltand's debt would be scottish banks who need a lender of last resort. Who will that be? And does it come with wee eck's notion of a free lunch? No.

I guess that vR and Barosso could both be wrong (!!!) but out of interest here are the latter's comments

http://www.parliament.uk/documents/lords-committees/economic-affairs/ScottishIndependence/EA68_Scotland_and_the_EU_Barros o's_reply_to_Lord_Tugendhat_101212.pdf

What exactly is it that the yes camp wants?

Independence from Westminster. Yeh, they'll be compromises. But this is a long term project where short term is decades, not years. But it's the first step to a Scotland politically more aligned to its own people. And not that of London.

I don't buy into the bullcrap FREEDOM way of thinking, well have to compromise. A lot. Also the wondrous utopia painted by some in the Yes camp really is very unlikely to happen. But it's even less likely to happen whilst remaining within the Union. They'll be some tough days/months/years, some hard choices, plenty of wake up calls, and stacks of disappointment.

It may well be futile, but without it you do not have independence re either monetary or fiscal policy. Salmond pretends otherwise...I would be genuinely interested in your sources re € adoption as my reading of EU notices, the NIESR analysis of Scotlands currency options, the FT and McCrone come to a different conclusion. In that respect, Kosovo and Macedonia are excretions not the rule in my understanding.

I think the word you're looking for in the first bit is sovereignty. But it's an illusory form of sovereignty to have a national bank or currency if it's just going to be a cork tossed about on the storms and tides of currency markets, which most small countries' currencies are.

I think you've misunderstood what "hard currency" means. It's a term that's become largely redundant now that a significant currencies are freely convertible.

Scotland doesn't have to issue bonds only (or at all) in the currency that is used as legal tender. Again - that's not unusual for small countries.

I think you might mean Montenegro (which uses the euro) rather than Macedonia (which uses the dinar). Macedonia is actually a good example of why it's stupid for small countries to go to the trouble of having their own currencies. WGAF about the Macedonian dinar apart from the Chairman of the Macedonian Central Bank?

I haven't read the documents you refer to. I suspect they all deal with how accession countries can become part of the eurozone and members of the ECB. Is that right? Do you understand that a country doesn't need to be a member of the ECB for its banks, businesses and governments to use the Euro - just like UK banks and businesses already do?

Kosovo and Macedonia are excretions not the rule in my understanding.

I believe both countries have their problems, but describing them like that seems a bit harsh.

Sorry I just saw this:

Among the main holders of Scoltand's debt would be scottish banks who need a lender of last resort.

Actually I am not. The lender of last resort function in my points relates clearly to the banks. The banks will, hold large amounts of domestic debt to meet liquidity rules. Therefore as lender of last resort the BOE (IF it agrees to remain lender of last resort) would be exposed to scottish credit risk. That is clear and widely discussed this week.

The choice if currency system has fundamental implications for a country's level of economic independence. Since this is the core of the debate, the choice of currency system is therefore critical to the debate which is why I would have expected AS to have done his homework. May I also suggest (in the spirit of the conversation tone!) that you are mixing independence with ability to defend against speculation. If you don't want to agree with me (perfectly sensible) but interested in analysis of this here's one link - note the opening para!!!

Ditto hard currency, perhaps we are talking cross purposes (and centuries). By hard I refer to its ability to maintain its store of value. The currency needs to hold value over the long term for long dated debt to be issues.

Sorry yes, Montenegro and "exception" (bloody auto spell

Thanks, I am well aware of the ability to use a currency other than your own one. But I do appreciate the respectful way you say that I am talking bollocks!!!!

The two more interesting examples IMO are Czech and Slovakia and their 6 week attempt at monetary union and the Irish example in the early 20century. Interestingly (and possibly for your argument ) was that unusually Ireland lasted about 20 years without a lender of last resort and thankfully did not have a run on its banks during the process. But the flip side was that Ireland had to run very conservative fiscal policy to compensate for the risk. To which McCrone concludes:

"With much greate speculative accitivity now a feature of financial markets, it is hard to see an independent Scotlnad getting away with having no lender of last resort. Nor, one imagines, would an independent Scotland, trying to stimulate its economy and wanting to use fiscal levels for this purpose, be content with an extremely conservative fiscal policy of the kind followed by Ireland after independence." McCrone 2013.

teamhurtmore - Member

Among the main holders of Scoltand's debt would be scottish banks who need a lender of last resort. Who will that be? And does it come with wee eck's notion of a free lunch? No

There seems to be an assumption here that the Bank of England simply becomes an RUK institution. What's the rationale for that? Presumably a proportion of the BoE asset belongs to Scotland. That's the difference between THM's "free lunch" and picking up the lunch you've already paid for.

The BOE assets include £375billion in UK Treasury bonds of which a portion would then transfer to iScotland.

Hmm. So, just speculating but what's the issue here? Either we leave our portion in the control of the BoE, and as a result can expect their support as a partner, or we take our portion and set up a National Bank of Scotland to do the same job (not to be confused, etc). Obviously there's a question of liabilities- whether our share covers our risk, or not.

Failing to see the free lunch here, or the reason why we'd have to accept being dictated to.

[quote=Northwind ]Hmm. So, just speculating but what's the issue here? Either we leave our portion in the control of the BoE, and as a result can expect their support as a partner, or we take our portion and set up a National Bank of Scotland to do the same job (not to be confused, etc).
Yep - in either case, iScotland would be a creditor of the UK Government.

The choice if currency system has fundamental implications for a country's level of economic independence...May I also suggest (in the spirit of the conversation tone!) that you are mixing independence with ability to defend against speculation.

The banks will, hold large amounts of domestic debt to meet liquidity rules.

1. Basics of financial regulation (google Basle 111) edit, no need, you clearly understand this.

2. Basle Ctte and international regulators including BoE and possibly a new Scottish Monetary Authority

3. Nothing - that's the point. Like any other bond they have an element of credit risk attached to them. Hence the lender of last resort (which AS assumes will be the BoE) will be taking on Scotland's credit risk. This may be better or worse that the credit risk of rUK (ST worse as a new county, but who knows over time). but either way a LoLR will not take a naked risk here. To fulfill this function they will need to have some say in Scotland's policy mix. Its very simple - there's a nice simple chart in the Scottish Analysis section of the government web site which makes this clear. See link below.

Like AS, others may try to muddy this issue with comment about my free lunch point. To be clear, in my case, the free lunch refers to the idea that you can delegate the role of LoLR but still maintain full policy independence. That is a fallcy.

On the first point, they do actually. Its how you use that policy independence that determines whether your currency is vulnerable or not. Contrary to public opinion, speculators dont attack currencies without reason or without fundamentals to justify their actions. To do so, would mean getting burnt and most are not that stupid.

Scotland has several choices to make re its preferred current arrangement. I would expect (in the event of a yes vote, however unlikely that may seem now) that this would be a staged process. That is all clear. What you cannot do in the interim is to simply mis-state the situation merely to suit your own agenda which is exactly what the book of dreams does.

Where's the requirement under Basle for banks to hold domestic debt? The assignment of domestic debt a 100% liquidity ratio is a free lunch - it's a failure to assign a proper risk discount on the value of potentially risky assets.

You're back to being the Chairman of the Macedonian Central Bank encouraging Maso banks to invest in dinar denominated bonds.

Sorry, I am not clever enough to understand that. Prefer to keep it simple.

Scottish banks will hold Scottish debt (among other instruments). The BOE will (probably) be LoLR, ergo, policy cannot be "independent" despite protestations otherwise. Refer to the chart in the link.

I am glad we have moved away from an economy with a high exposure to financial services surviving without a LOLR. That is some progress!

Where's the requirement under Basle for banks to hold domestic debt? The assignment of domestic debt a 100% liquidity ratio is a free lunch - it's a failure to assign a proper risk discount on the value of potentially risky assets.

You're back to being the Chairman of the Macedonian Central Bank encouraging Maso banks to invest in dinar denominated bonds.

That's quite funny. Given your obvious knowledge in this area, you will be well aware of what has been happening across European banking in this respect clearly (the hidden circle of financial deceit) And not just in Macedonia!

So...we're agreed, then?

No I just can't be arsed with tangential debates.

It's very clear, well documents and thoroughly researched. Unfortunately the conclusions do not suit wee eck's agenda, so the tangetial BS will continue over the next few months. Meanwhile the RoW, including rUK and Europe will get on with their lives leaving AS to live in la, la land. We could ignore him too but for the fact that his BS unsettles markets resulting in the need for the Treasury statement this week.

Responsible, moi?!?!?