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User Name Thread Name Subject Posted
GUEST,Troubadour BS: scottish independence (419* d) RE: BS: scottish independence 13 Sep 14

"Has the potential new interim governing body (or the "yes, lets separate" proponents) put forward a strategy to deal with the potential economic impact of starting a new government and economy - while starting out with a debt and likely significant deficit?"

It would seem that they have not!

There is online an analysis of Scotland's options absent Salmond's claimed currency union with rUK.

It suggests, based on the countries with population and GDP closest to Scotland, that the best case scenario is that Scotland would have to float a debt burden of more than 50% of GDP to support its independent currency alone, while that would increase significantly if start up costs were factored in.

The Scots economy would of necessity have to borrow massively, or be in a position where a run on its currency would mean bankruptcy.

And of course, if Salmond's plan to hold Scotland's share of UK debt to ransom in an attempt to force currency union ends in repudiation of the debt, this will be regarded worldwide as defaulting on commitment.

What price borrowing then?

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