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This piece by Andrew Wilson is littered with falsehoods. That they continue to be repeated - while legitimate criticism is ignored - is starting to have a seriously corrosive effect on the debate about Scotland’s future.
Thread: https://www.spectator.co.uk/article/scotland-cant-afford-to-remain-part-of-the-union
Thread: https://www.spectator.co.uk/article/scotland-cant-afford-to-remain-part-of-the-union
Firstly, he confirms that an indy Scotland would pursue Sterlingisation (which he previously said would last “up to a decade”). He then claims that new central bank would be created immediately, “serving similar functions to euro members’ central banks.” This is nonsense >
National central banks are part of the euro system which also includes the ECB. The comparison would be valid if he was talking about a currency union with rUK, but he isn’t. He either doesn’t understand his own growth commission report, or he is deliberately trying to mislead >
Second, he claims that because the UK has financed large deficits during the Covid crisis while keeping interest rates low, this proves that a sterlingised Scotland would be able to do so too.
This sleight of hand ignores two crucial things >
This sleight of hand ignores two crucial things >
1) The UK borrows in its own currency - a global reserve currency - whereas a sterlingised Scotland would be borrowing in a foreign currency
2) The UK’s deficit this year has been monetised by the Bank of England - an option that would not be available to a sterlingised Scotland
2) The UK’s deficit this year has been monetised by the Bank of England - an option that would not be available to a sterlingised Scotland
As I wrote here, a country trying to fund large twin deficits by borrowing in a foreign currency would not be remotely sustainable. During a pandemic, this would be lethal.
Peddling this nonsense is deeply irresponsible. Time for a serious debate END https://www.opendemocracy.net/en/oureconomy/snp-must-rethink-its-economic-model-independent-scotland/
Peddling this nonsense is deeply irresponsible. Time for a serious debate END https://www.opendemocracy.net/en/oureconomy/snp-must-rethink-its-economic-model-independent-scotland/
