Scottish Independence Referendum - 18 September 2014

[Linus Van Pelt]

I don't think #2 is feasible.

If I understand correctly, there are a few countries (Ecuador, Panama, El Salvador) where US dollars literally circulate as legal tender, not just a local dollar-pegged currency. Where they get the banknotes, though, I'm not clear.

[Paleobrazilian]

I don't think #2 is feasible.

If I understand correctly, there are a few countries (Ecuador, Panama, El Salvador) where US dollars literally circulate as legal tender, not just a local dollar-pegged currency. Where they get the banknotes, though, I'm not clear.

They have to keep dollars pumping into their economies. Ecuador does that by exporting oil and fruits. Panama through its Channel. This scheme of dollarization keeps inflation in check but makes growth very slow as it's limited to the amount of dollars coming in.

[Meeker]

Having only paid attention to this on and off over the past few years, can someone knowledgable explain why Cameron agreed to recognize the legitimacy of this vote at all?

[Foucaulf]

As far as I can tell, the Yes campaign has faith Scotland will keep the pound. Salmond either says he will negotiate a currency union with England, or threaten to renege on Scottish government debt denominated in pounds. Barring that, during the transition period they'll rely on 2).

Let us assume that no English party would accept a currency union, and that Scotland will find it irrational to block off trade as a threat (only to watch their economy burn). The big decision is between choosing to have sterling reserves circulate in the economy or convert to a currency pegged to the pound. The latter option seems the most sustainable - Scotland won't have an independent monetary policy otherwise. In fact, since a new Scotland wouldn't be crippled on the bond markets they ought to do this sooner or later.

The real question is: when will Scotland transition to a new currency? Will they allow their unofficial sterling reserves to circulate and try to get extra currency through oil exports for as long as they can? The government responsible for a currency transition will find heavy resistance, as a public confused about the new currency's credibility may hoard or try to divest. A central bank would essentially have to swap pounds in bank/saver reserves for the new currency, and then commit to a fixed exchange rate and trade their sterling reserves accordingly. I think economists underestimate how this process can descend into chaos quickly.


Here are some talking heads in the Financial Times debating the options.

[You kip if you want to...]

Been a while since politicians displayed such open panic about something.

[Keystone Phil]

PMQs were cancelled so the Big Three can go to Scotland to campaign? And that's supposed to help the No campaign?

[You kip if you want to...]

PMQs were cancelled so the Big Three can go to Scotland to campaign? And that's supposed to help the No campaign?

Miliband's one thing, but Cameron and Clegg should be as far away from Scotland as they physically can be.

Also, I've just seen on the news that Ed was with Mayor Joe in Liverpool campaigning for Better Together. There's 10 days left, what a waste of time! They should be camped out north of the border by now anyway.

[Lurker]

PMQs were cancelled so the Big Three can go to Scotland to campaign? And that's supposed to help the No campaign?

Miliband's one thing, but Cameron and Clegg should be as far away from Scotland as they physically can be.

Agreed. Surely Cameron isn't stupid enough to go there?

Nigel Farage is going as well, to a UKIP rally in Scotland on September 12. Not a good idea.

[Paleobrazilian]

If Scotland votes yes, will Miliband fall?

[Gass3268]

If Scotland vote yes, there is no way they'd get into the EU or NATO, right? I cannot see the UK (or whatever they would be called), Spain, or any other national with a secessionist movement allowing them in either group.

[Velasco]

If Scotland vote yes, there is no way they'd get into the EU or NATO, right? I cannot see the UK (or whatever they would be called), Spain, or any other national with a secessionist movement allowing them in either group.

Spain will not oppose the entry of an independent Scotland in the EU.

http://elpais.com/elpais/2014/02/03/inenglish/1391425089_214995.html

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However, after reading some article by Krugman on how stupid would be the idea of an independent Scotland depending on the Bank of England (didn't they learn any lesson from the ill design of the Eurozone?), I wonder if Scots realise that independence might not imply sovereignty.

[afleitch]

If Scotland vote yes, there is no way they'd get into the EU or NATO, right? I cannot see the UK (or whatever they would be called), Spain, or any other national with a secessionist movement allowing them in either group.

We will be allowed into NATO. It would not wish to leave this undefended;

[afleitch]

In other news, Prime Ministers Question Time is being suspended tomorrow with the party leaders travelling up to Scotland.

[You kip if you want to...]

If Scotland votes yes, will Miliband fall?

No. Keep you eye on Cameron though, he is leader of the Conservative and Unionist Party after all.

A Yes vote brings, of course, a complete unknown. Literally anything could happen. I imagine the rUK public reaction to negotiations will be something akin to "well stuff them then, they don't want us, don't give anything away" even though, right now, the public would prefer Scotland to stay. Could be an issue in the GE and if the Tories and the public don't think Cameron is the guy to take a hardline on negotiations, who knows what the Tory power brokers would do...

[Paleobrazilian]

If Scotland vote yes, there is no way they'd get into the EU or NATO, right? I cannot see the UK (or whatever they would be called), Spain, or any other national with a secessionist movement allowing them in either group.

We will be allowed into NATO. It would not wish to leave this undefended;

EU shouldn't be a problem as well because Scotland wouldn't be breaching international law to become independent. It would be getting its independence through a process negotiated with the central government, where England would be explicitly recognizing and accepting the referendum and its results as a sovereign wish of the Scots for self-determination.

If England didn't accept the referendum in first place, then Scotland would be in breach of international law by running it and by self-declaring itself independent.

The thing is, even if Scotland votes yes next week and becomes independent, membership to the EU is not automatic. There's no succession of States, there's the formation of a whole new State. Thus, Scotland would have to go through the entire process of accession to the EU if they want EU membership. And while Scotland's legal order is already pretty much up to EU standards, negotiations and ratifications could take a little while.

[politicus]

Scotland is too valuable a partner for the EU to ditch them. While there might be some stones on the road along the way to membership, its hardly realistic that they would be kept out.

England would have no long term interest in keeping Scotland out. That would just unnecessarily complicate trade.

[Gass3268]

Cool, thanks for the answers to my question!

[ilikeverin]

Ed Miliband calls for locations all around England to raise the Scottish saltire in "solidarity" with Scotland.  Cameron assents and starts raising it above Downing Street.  In the first try to get it up, it falls to the ground after it gets half way up the flagpole.  Metaphor ensues?

[ilikeverin]

Ed Miliband calls for locations all around England to raise the Scottish saltire in "solidarity" with Scotland.  Cameron assents and starts raising it above Downing Street.  In the first try to get it up, it falls to the ground after it gets half way up the flagpole.  Metaphor ensues?

Now with video!

[YL]

The extent of the panic makes me suspect that Better Together have private polling which is at least as bad for them as the public polls.

[You kip if you want to...]

Are Scots naturally late deciders? In 2007 and 2011, Labour led in the polls until late in the day. Are we just seeing a repeat of this dynamic?

Also, on Mark Carney's words today, does he have the same opinion of the nats in Quebec?

[Filuwaúrdjan]

In 2007 the SNP lead throughout (and before) the campaign.

[Filuwaúrdjan]

I wonder if Scots realise that independence might not imply sovereignty.

We have now reached the slightly ridiculous situation where both campaigns are technically offering something not dissimilar to what the other is...

(personally I wouldn't buy a used car off either)

[Phony Moderate]

So how is the counting process going to work, when will it actually take place and will there be an exit poll?

[afleitch]

So how is the counting process going to work, when will it actually take place and will there be an exit poll?

No exit poll. Polls close at 10pm. Counting done by local authority. Results announced throughout the very early morning. Final tally announced.