Here is a better article on Scottish choices
1. Currency union - but the British government and the Bank of England say they will not agree to that
2. Unilateral adoption of the British pound (Montenegro uses the Euro, and Panama uses the U.S. dollar)
That may be difficult as they will not control the money supply, and may face a shortage of banknotes
Also - no lender of last resort. If the banking system runs into trouble, it will be difficult to save it
3. Adopt the Euro
Scots are pro-European. But the process of adopting the Euro takes a few years, so it cannot be implemented right away.
Interesting point in the article: to allow independent Scotland into the EU, all members have to agree. Spain, which has its own separatist movement in Catalonia, may not.
4. Introduce own currency
Problems: it is hard to know how well it will work; at least for some time there will be a lot of uncertainty and so interest rates will have to be higher.
More importantly, if the separatists said now they want to introduce the Scottish Pound (how about the Sound for an abbreviation), the Yes vote will fail. People are scared of the idea of having a separate currency.
1. Currency union - but the British government and the Bank of England say they will not agree to that
2. Unilateral adoption of the British pound (Montenegro uses the Euro, and Panama uses the U.S. dollar)
That may be difficult as they will not control the money supply, and may face a shortage of banknotes
Also - no lender of last resort. If the banking system runs into trouble, it will be difficult to save it
3. Adopt the Euro
Scots are pro-European. But the process of adopting the Euro takes a few years, so it cannot be implemented right away.
Interesting point in the article: to allow independent Scotland into the EU, all members have to agree. Spain, which has its own separatist movement in Catalonia, may not.
4. Introduce own currency
Problems: it is hard to know how well it will work; at least for some time there will be a lot of uncertainty and so interest rates will have to be higher.
More importantly, if the separatists said now they want to introduce the Scottish Pound (how about the Sound for an abbreviation), the Yes vote will fail. People are scared of the idea of having a separate currency.
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