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Currency - View From A London Stockbroking Firm


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Received a very interesting document from London Stone Securities last night re Independence. One point they raise is about currency and from a stockbroking firm it totally contradicts the government position. It is worth reading -

"Currency – Pound, euro or something else?
Out of all the various points to consider this is perhaps one of the most pertinent.


There are three main currency options for an independent Scotland – keeping the pound, joining the euro, or having its own currency. Now given that Westminster has already stated that an independent Scotland will not be able to keep the pound attention should surely go to the other two, or should it?


You see at London Stone we think that this is somewhat of a red herring. Is it really conceivable that the British Government would run the risk of the sort of financial chaos that would ensue if Scotland did join the euro or establish its own currency? We think probably not. The threat that is now being waved in the face of the Pro-Scottish campaign is probably well-intentioned but more scaremongering than genuine economic policy. What is more likely to happen is that Scotland (if it gains independence) will most probably get to keep the pound at least for the foreseeable future as English companies north of the English-Scottish border take stock of their new found and unwanted situation.


That said we do still need to consider the other options and it’s most likely out of these two alternatives Scotland would wish to join the euro.

Whether Europe will accept Scotland is of course another point entirely although with the stressed relationship currently between the UK and Europe it could be easier than first appears. After all far be it for us to be cynical but it could be just the opportunity for the EU to perform the habitual ‘stab in the back’ routine for the UK in what has become a very tenuous relationship between the continent and us. "

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