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Will Osborne Cave In On Currency Union ?


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I know that the debt is held by the BoE, and that Scotland will not have legal title to it. It is undeniable that a part of the BoE debt was run up by Scotland as part of the UK. There is no way iScotland won't take on a share, currency union or not. In fact, I think rUK should take significant action (e.g. blocking Scottlish EU membership) if it even looks like it won't take on a proportionate share.

No it wasn't. The debt was run up by Westminster - the Scottish Government has no borrowing powers.

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Westminster, the government of the UK, of which Scotland is a full part. You really can't get away from it.

Yes you can. There is no legal basis for Scotland to be forced to take on any debt.

If you want to make moral or ethical arguments, then fair enough. But then you'd have to accept that Scotland does it's fair share in creating and maintaining the value and strength of Sterling currency zone, and is entitled to expect negotiations that enable that to continue (in the short term at least).

You can't have everything you're own way.

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there is such guff talked about debt. Debt is issued to sovereign governments pretty much on the basis of their ability to pay it back. Scotland as a new nation will have no debt history and nothing it negotiates/agrees/disagrees with the UK will have any bearing on its ability to issue debt - this cr@p about 'pariah' ' walking away' is financial nonsense..... markets dont work that way.

With $1.7Trillion wholesale oil assets (by the worst estimates of BT) issuing debt at low rates will not be in any way problematic. I would bet we would start at lower rates than the UK - as do Ireland and most countries in northern Europe.

Stop talking sentimental p!sh.......

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Yes you can. There is no legal basis for Scotland to be forced to take on any debt.

If you want to make moral or ethical arguments, then fair enough. But then you'd have to accept that Scotland does it's fair share in creating and maintaining the value and strength of Sterling currency zone, and is entitled to expect negotiations that enable that to continue (in the short term at least).

You can't have everything you're own way.

And practical, in terms of how a refusal to take on a share would cause the rUK and potential future creditors to act in response.

Scotland is entitled to negotiations on any point it wants, naturally. And I don't think that the rUK will have things all its own way. However, the position which I often read hear ('the rUK will be bankrupt / they can't cope without us / unsustainable debt etc etc') fails to take into account the true relative strength of the rUK and iScot economies, and hence bargaining positions in absolute terms. Something like 65% of Scottlish exports go to the rUK - representing about 29% of total Scottish GDP - and so the health of the Scottish economy is entirely dependent on the health of the rUK economy. Exports to Scotland from rUK only make up about 10% of the total - about 3.5% of rUK GDP. RUK will inevitably be negotiating from a position of strength.

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And practical, in terms of how a refusal to take on a share would cause the rUK and potential future creditors to act in response.

Scotland is entitled to negotiations on any point it wants, naturally. And I don't think that the rUK will have things all its own way. However, the position which I often read hear ('the rUK will be bankrupt / they can't cope without us / unsustainable debt etc etc') fails to take into account the true relative strength of the rUK and iScot economies, and hence bargaining positions in absolute terms. Something like 65% of Scottlish exports go to the rUK - representing about 29% of total Scottish GDP - and so the health of the Scottish economy is entirely dependent on the health of the rUK economy. Exports to Scotland from rUK only make up about 10% of the total - about 3.5% of rUK GDP. RUK will inevitably be negotiating from a position of strength.

I'd be inclined to think that the markets would be more concerned at Scotland continuing to service a debt which it does not owe than walking away from it.

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And practical, in terms of how a refusal to take on a share would cause the rUK and potential future creditors to act in response.

Scotland is entitled to negotiations on any point it wants, naturally. And I don't think that the rUK will have things all its own way. However, the position which I often read hear ('the rUK will be bankrupt / they can't cope without us / unsustainable debt etc etc') fails to take into account the true relative strength of the rUK and iScot economies, and hence bargaining positions in absolute terms. Something like 65% of Scottlish exports go to the rUK - representing about 29% of total Scottish GDP - and so the health of the Scottish economy is entirely dependent on the health of the rUK economy. Exports to Scotland from rUK only make up about 10% of the total - about 3.5% of rUK GDP. RUK will inevitably be negotiating from a position of strength.

Away with your sense down here in rUK were doomed !!!! The sovereign will of the scottish people means we get a currency union (until something better comes along for Scotland) whether we like it or not feck the sovereign will of everyone else !!

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Yes you can. There is no legal basis for Scotland to be forced to take on any debt.

If you want to make moral or ethical arguments, then fair enough. But then you'd have to accept that Scotland does it's fair share in creating and maintaining the value and strength of Sterling currency zone, and is entitled to expect negotiations that enable that to continue (in the short term at least).

You can't have everything you're own way.

The legal basis is whether Scotland is a seceding or successor state. If it's a successor state we're legally bound but it's been made fairly clear we're viewed as a seceding state. Treaty of Vienna and all that.

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The legal basis is whether Scotland is a seceding or successor state. If it's a successor state we're legally bound but it's been made fairly clear we're viewed as a seceding state. Treaty of Vienna and all that.

Scotland will not have title to any of the debt. That's already been confirmed by BoE or the Treasury.

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Scotland will not have title to any of the debt. That's already been confirmed by BoE or the Treasury.

"confirmed by BoE" and "confirmed by the Treasury" have come to mean very different things. I'd be inclined to believe one of these sources, while treating with the deepest suspicion anything reportedly said by the other

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The BoE does not owe money to anybody. (A bit like Scotland in that respect :wink2: ) It is the UK treasury which has run up the £1.3 trillion debt and it is still rising at a rate of about £4000 per SECOND. In fact the UK treasury OWE £375 billion TO the BoE. We will want our share of that as we part own the BoE. This will be taken into account during the negotiations.

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Scotland will not have title to any of the debt. That's already been confirmed by BoE or the Treasury.

I understand that. But if we're a successor state we take our share of ownership of the predecessor's assets and liabilities. Confirming we don't have title to it is in effect confirming we're viewed as a seceding state.

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It's bluff and double bluff. Both sides will play nice on currency and debt when it comes down to it.

There is really only one issue that is remotely contentious - Trident. If Scotland agrees to allow England a base at Faslane for c20+ years then England would let Scotland have pretty much everything else it wants. Such a move would probably be electoral suicide for the Scottish negotiators however.

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It's bluff and double bluff. Both sides will play nice on currency and debt when it comes down to it.

There is really only one issue that is remotely contentious - Trident. If Scotland agrees to allow England a base at Faslane for c20+ years then England would let Scotland have pretty much everything else it wants. Such a move would probably be electoral suicide for the Scottish negotiators however.

I agree. It'll be a delicate balance around Trident - how long can we give without looking like backing down too much. However, it'll be a multi-party team in the negotiations so it would affect all parties. I think two terms of Scottish government (i.e. 8 years) might be a reasonable compromise, so long as we get to watch Antiques Roadshow a decent deal in terms of defence assets and debt in return.

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It's bluff and double bluff. Both sides will play nice on currency and debt when it comes down to it.

There is really only one issue that is remotely contentious - Trident. If Scotland agrees to allow England a base at Faslane for c20+ years then England would let Scotland have pretty much everything else it wants. Such a move would probably be electoral suicide for the Scottish negotiators however.

Im not sure I agree. I think it would be very hard to stomach for a majority of Yes campaigners but I think the vast majority of the overall electorate would be far happier to secure currency union at expense of a longer term plan for Trident. The section of the Yes support that would be completely unhappy at Trident would likely see the Green Party return a far greater number of MSPs in the Scottish elections as Yes campaigners turn their back on the SNP. On this, I think Salmond et al would have no problem taking one for the team.

To be honest, as much as I want to see the back of Trident, I wouldn't be unhappy with currency union, a proportionate share of debt, and medium term (10-15 years) agreement to house Trident (but no successor). We'd get short term currency stability, the local Faslane economy gets a bit more certainty, the Scottish Government get more time to invest and turnaround a Scottish naval base, support increases dramatically for the Green Party and we'd see an Sturgeon/Harvie coalition in 2016.

By the time Trident is coming to an end, the economy has moved away from Trident dependency, and we'll be in a better state to float our own currency.

Edited by Auld_Reekie
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Im not sure I agree. I think it would be very hard to stomach for a majority of Yes campaigners but I think the vast majority would be far happier to secure currency union at expense of a longer term plan for Trident. The section of the Yes support that would be completely unhappy at Trident would likely see the Green Party return a far greater number of MSPs in the Scottish elections as they turn their back on the SNP.

To be honest, as much as I want to see the back of Trident, I wouldn't be unhappy with currency union, a proportionate share of debt, and medium term agreement to house Trident (but no successor). We'd get short term currency stability, the local Faslane economy gets a bit more certainty, the Scottish Government get more time to invest and turnaround a Scottish naval base, support increases dramatically for the Green Party and we'd see an Sturgeon/Harvie coalition in 2016.

I honestly don't see why Trident is such a big issue - it doesn't put Scotland at any greater or less risk in the event of a nuclear war. We're all toast anyway - it wouldn't make the slightest bit of difference if the subs are based in Devonport or Faslane. The rUK isn't (very, very unfortunately) going to give up having nuclear weapons.

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I honestly don't see why Trident is such a big issue - it doesn't put Scotland at any greater or less risk in the event of a nuclear war. We're all toast anyway - it wouldn't make the slightest bit of difference if the subs are based in Devonport or Faslane. The rUK isn't (very, very unfortunately) going to give up having nuclear weapons.

It's a big issue because some of us are driven by morals. And Trident is immoral and unethical. And while the UK might try and keep them, the narrowing political landscape and increased awareness/danger by having them in rUK means they are harder and harder to justify.

And there are some who believe that Scotland forcing them South would in fact force rUK to scrap them.

Let me put it another way, continuing to tolerate or excuse WMD does f*** all to rid us of them.

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It's a big issue because some of us are driven by morals. And Trident is immoral and unethical. And while the UK might try and keep them, the narrowing political landscape and increased awareness/danger by having them in rUK means they are harder and harder to justify.

And there are some who believe that Scotland forcing them South would in fact force rUK to scrap them.

Let me put it another way, continuing to tolerate or excuse WMD does f*** all to rid us of them.

:ok:

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