The Currency Question

[Damo]

Like it or not this was something the media could return to continually and it stuck with the electorate.

Whilst Alex Salmond handled this much better in debate two had the damage already been done?

Was this just a case of the media happily reporting the BT line. Ie unanswered questions that had been answered.

Was the policy of CU flawed. Should a different tact have been taken.

So (assuming this is a mistake) how can we learn from this, thoughts?

[runningtings]

You are right the damage was done before and during the first debate.

We should just have declared a Scottish pound tied directly to Sterling in my opinion, too late now though.

[Ally Bongo]

In short. We need to set up our own Central bank

[jockodile]

From a common sense perspective it was the best option Damo, but crucially gifted the other side an opportunity to say nope - even if we knew it was bluster, the lack of certainty on it from the viewpoint of the ordinary voter was the defining negative issue of the campaign.

A separate currency, pegged to pound, looks the way to go.

[exile]

In short. We need to set up our own Central bank

It shall be the Airdrie Savings Bank - renamed Airdrie Central Bank.

[Replay]

In short. We need to set up our own Central bank

Agreed, but wouldn't this also involve setting up some kind of wealth fund?

[Ally Bongo]

Agreed, but wouldn't this also involve setting up some kind of wealth fund?

Im no expert and dont even know if its possible in our current political state but i believe so

Would really need an expert in economics to advise if it is or isnt a pipe dream

[highland_john]

Realistically, we need to wait for the Euro to become a credible option again.

[redstevie007]

Im no expert and dont even know if its possible in our current political state but i believe so

Would really need an expert in economics to advise if it is or isnt a pipe dream

Not sure of the ins and outs but in very simple terms would it not work like this:

Day 0 - Referendum returns a Yes vote

Day 1 - Negotiations begin on proportion of tax profits from O&G, exports etc to be placed in trust ( for want of a better term) until wealth fund is prepared

Ensuing months - Central bank arranged and ready to operate, aforementioned proportion of profits deposited in Wealth Fund

Independence Day - Full profits from O&G etc transferred and Wealth fund/central bank starts operation.

Extremely simplified obviously, so if someone can tell me if that makes sense I'd be really grateful

Edited September 20, 2014 by redstevie007

[Jie Bie]

After the first debate I thought we'd lose based on this one issue. However after a while I realised that the strategy was actually quite effective.

The Yes campaign got BT to drone on and on about it in the first debate and before long the voters were sick of hearing about currency. The strategy nearly worked as most No voters I've spoken to have admitted to me that there probably would have been a currency union. In fact whenever I mentioned other small countries which have their own currencies (e.g. Denmark, Sweden, Switzerland, Czech Republic, New Zealand) they would even agree we could have our own currency within 10 years of independence.

For weeks I've been convinced that if Gordon Brown had signed the UK up to the Euro back when he was chancellor the currency question would have been much easier. Another reason for us to be pissed off at him!

Edited September 21, 2014 by Jie Bie

[Armchair Bob]

Have thought for a while there would be a run on the pound as the fundamentals are weak - massive amounts of national debt and negative flows of exports. I suppose there are massive amounts of personal debt too denominated in pounds so it is in the interests of lending businesses to keep the value artificially high.

We will find out soon enough.

[exile]

Realistically, we need to wait for the Euro to become a credible option again.

Also the whole EU issue. EU could have provided much more of a counterweight to the argument of 'too wee' - all the arguments about defence and so on, being part of something bigger, that something bigger could in another time and place have been EU.

Somehow, the EU simply became something to fear being not part of, rather than an alternative 'better stronger larger to belong to'

[Haggis_trap]

There is no doubt that currency was the reason we lost.

In reality it didn't matter longterm - but in the short term people were scared of change.

Especially those aged 55 and over.

Currency Union was the best option for both sides.
However convincing people to have the balls to vote YES and call Westminsters bluff was tough....

The main problem is that a CU was out of our control and Alistair Darling had us by the balls. Though in many ways I still think the YES campaign were right to avoid falling into the "plan B question" trap ? Doing so would have just allowed them to ask more questions of those inferior options ? Why should Scotland have accepted second best before negotiations even begun ?

IMHO the best plan B would been the euro - however without its own central bank Scotland couldn't have technically been able to apply straight away. If there is a next time we need to try and pre-negotiate EU membership and a firm plan / path to join the euro.

Edited September 21, 2014 by Haggis_trap

[EddardStark]

The question was absolutely crucial and the vagueness Salmond's response was a telling factor. The voters had to make their mind up whether the threat to deny Scotland the use of sterling within the currency union was real.

Edited September 21, 2014 by EddardStark

[antidote]

You are right the damage was done before and during the first debate.

We should just have declared a Scottish pound tied directly to Sterling in my opinion, too late now though.

They would moved straight onto how worthless it would be i.e. 10 groats to 1 GBP etc. They have form on that.

[saintlyscot]

The currency issue was a huge stumbling block. The apparent lack of preparation of YES on the subject and the lack of clarity in the answers given caused uncertainty. People did not grasp/ were not told the balance of payments issue would have done untold damage to ruk treasury without a currency union. Also having what people perceived to be the English standing behind us as lender of last resort confused people. We need to do a lot of work on this issue to find the best way forward and articulate it with more clarity. With the new powers promised in the vow by the three stooges already looking like falling apart at the seams and given the tawdry state of politics at Westminster I can forsee another referendum within the next decade. I would urge everyone to join and get behind the snp and see the twin goals of Scottish labour being consigned to history at the next Scottish parliament election and having westminster dance to a Scottish tune until we can put the question to the Scottish people once more.

[jockodile]

The euro for us isnt the end of the world but the right wing media have spun it so badly it is toxic and not a battle the Yes campaign was prepared to fight.

If currency union wont be okd by london ahead of ref2 and why would they, then forget sterlingisation it either our own currency or blitz the euro bad press.

no brainer the easier choice I think although I coulddl be persuaded for euro

[giblet]

We had to go with the strategy Yes put forward. When you are building a new nation, you want stability, it was the obvious thing to do. What was unsaid, is that clearly a currency union was what we wanted for 5 years or so, in that time, we could build reserves and get ready for our own currency.

We couldnt say that as that would be showing our hand and the markets would not have liked that either.

[big_matt]

I wouldnt be keen on the euro. Its not currently a viable setup for europe in the long term imo and like the union the cracks are being papered over but wont hold forever.

We maybe need our own currency. Whatever the solution there needs to be detailed planning and the public brought along on the journey.

Edited September 21, 2014 by big_matt

[thplinth]

The best option is our own currency but if we had said that it too could have been used to generate scare stories. The currency was a hiding to nothing because no matter which way you went you can conjure up some scare.

Plenty was said to refute it all but then you come to the saturation propaganda all screaming the scare stories and very little else.

I think we have to be much braver on this one next time and commit to our currency which from an independence point of view is the 'pure' stance anyway. Jim Fairlie was right about this. No control over your money is not real independence anyway.

[thplinth]

Plus using the pound post No was flawed. The pound would start to devalue meaning we would have been hitched to a sinking ship. Again I suspect it was considered the least scary option by the SNP but if they had been bolder on this it would have been better (with hindsight).

[thewelk]

Even if they'd declared that a Scottish currency would be formed the self loathing nature of the no campaign would have meant ridicule from day 1. I can just imagine Darling laughing about it with some 'boaby' jokes. Flyers printed with king Salmond on the 10 boaby note. And the self loathing servile trash that is the Scottish public would have lapped it up as their main excuse for voting against a more progressive society. The currency issue was lose-lose. They actually did OK with it in the end.

[DonnyTJS]

The currency issue was lose-lose. They actually did OK with it in the end.

An independent currency would have given people something to aspire to - true independence; an economy regulated by a government with control over the fiscal & monetary levers working to maximize the economic potential of the country's resources. Vide the Norwegian krone. What's aspirational about sharing (or piggy-backing on) a compromised currency with another nation? The Yes campaign fücked up majorly on currency - and it's not hindsight, a few on this board pointed this out regularly.

Edited September 21, 2014 by DonnyTJS

[Khana Lagur]

I don't believe a sterling union was ever a long-term plan. It was a plan to ease us into independence and help keep some of the fears at bay. It seems inconceivable that a Scottish pound or use of the euro wasn't the longer term plan.

The currency union was viable in the short-term for the simple reason that interest rates are likely to remain low and stable for the next few years, which would have covered a newly-independent Scotland's backside. Had they been rising rapidly, it could have caused problems but that was unlikely to ever be the case, given we are still in recession recovery mode.

The irony is that the constitutional upheaval that were are currently looking at may well settle into an almost federal system of govt. If that situation arises you would have four countries in a federated union using the same currency. That would largely remove the currency issue in a future indy referendum.

If Scotland plays it smart it could demand that any settlement under 'the vow's' tax settlement involves a proportion of North Sea revenues being put into an oil fund for future generations. That would help ease fears over whether we could afford future independence.

[DonnyTJS]

I don't believe a sterling union was ever a long-term plan. It was a plan to ease us into independence and help keep some of the fears at bay. It seems inconceivable that a Scottish pound or use of the euro wasn't the longer term plan.

The currency union was viable in the short-term for the simple reason that interest rates are likely to remain low and stable for the next few years, which would have covered a newly-independent Scotland's backside. Had they been rising rapidly, it could have caused problems but that was unlikely to ever be the case, given we are still in recession recovery mode.

'Short-term' currency unions or agreements have tended to be inherently unstable as they attract speculators, precisely because they are short term. If there is no absolute commitment from the participating governments to make it work (and in this case there wouldn't have been) then you get massive capital flows from one participant to the other as speculation on the viability of the planned emerging currency takes hold. Look at the Czech / Slovak Koruna union in January 1993 which lasted five weeks instead of the intended 6+ months. Or Sterling's humping out of the ERM.

The irony is that the constitutional upheaval that were are currently looking at may well settle into an almost federal system of govt. If that situation arises you would have four countries in a federated union using the same currency. That would largely remove the currency issue in a future indy referendum.

At the moment, a planned drift towards a fairly loose 'British Confederation' looks like the least bad option. Not that we've the politicians to plan for that.

Edited September 21, 2014 by DonnyTJS