The Mudcat Café TM
Thread #155459   Message #3658987
Posted By: Ed T
10-Sep-14 - 07:59 AM
Thread Name: BS: scottish independence
Subject: RE: BS: scottish independence
""I...Scotland is a net drain upon the UK, then removing that sinkhole should improve the financial outlook for the remaining United Kingdom (rUK)."

While this seems to make sense on first look, there are factors to consider that makes it less so, especially over the short term-such as:

Firstly, outside forces, like bond companies, lenders, trading partners and other outside financial players prefer stability to unpredictability and sudden change. Over the short term, I suspect the financial outlook would reflect the uncertainities of the impacts of separation.This could be the biggest related impact, likely bigger than the current fall of the currancy. However, over the longer term, this uncertanity would be likely be reduced, through increased stability, as would the financial impact.

Secondly, like with a divorce, the initial costs of two parties "going out on their own" can be greater than the costs to a single pairing. Each government would likely see new costs (such as consultants,and reorganization) to adjust, as governments tend to do. It is likely that these costs would reduce over the longer term.Sometimes there are efficiencies over delivering services to a greater number, sometimes there are efficiencies related to being smaller.