on their whims as its political masters. currency, after an initial speculative And this is precisely why such a policy period, would float upwards against both should be unacceptable. the RUK pound and the Euro, damaging www.ScottishSocialistParty.org How independent would Scotland be both Scottish exports and tourism. if all our monetary policy were In the longer term, an appreciating determined by London? There would be Scottish currency may be both no independent interest rate and money inevitable and even desirable, but the supply (a key determinant of economic economic disruption in the short term policy) would continue to be controlled would be alarming and damaging. by the Bank of England. It has been The answer then is to tie an claimed that at least fiscal policy would independent Scottish pound to the WHAT CURRENCY ? be under the control of the Scottish English pound initially, ensuring, for Government, but budgetary decisions example, that cross-border trade and are severely constrained by monetary other economic transactions continue policy. To be truly independent, and to as prior to independence. allow socialist economic decisions to be In the meantime, a new Central Bank taken, a Scottish currency cannot be of Scotland could then be created, left under the control of London. ensuring that monetary decision-making was devolved to a truly independent Capitalist device nation. Not all nationalists reject such a Even though it is totally untrue that an proposal and Margo McDonald, for independent Scotland would be forced example, has espoused a similar to adopt the Euro, its use could arrangement, as has the Green Party. certainly be an option for a Scottish It should be emphasised that a Government, but given the chaos in the linkage of one currency to another, Euro Zone at the moment, no one albeit on a short-term basis, is by no by Bill Newman and Colin Fox such an option is not immediately seriously suggests it for now. means uncommon and breaches no realistic given our financial obligations Indeed, there is clearly no sense in international agreements. THERE is a perfectly sensible debate to to international bodies. So, it is sensible tying Greece, Cyprus, Spain and be had on what currency an independent to look at those alternatives that would Portugal to a Euro exchange rate which Fairer society Scotland should use. But, as usual, the not limit Scotland’s economic options. leaves their currency wildly over-valued It is surprising that the SNP should ‘No’ to Independence campaign prefers while Germany’s is under-valued. want to continue to be beholden to the to frighten people with nonsensical scare Constraints This is not just a capitalist device to Bank of England and the bank’s stories, such as insisting an independent In theory, it should be possible to keep reinforce a market-driven Europe, but an Westminster masters for a large portion Scotland would be forced to use the the pound Sterling, with all the absurdity which caused misery to workers of its economic policy-making. If we are Euro, instead of engaging in a constraints that would involve, such as in southern Europe and must eventually serious about creating a fairer society, constructive and learned debate. the Bank of England maintaining collapse under its own contradictions. where greed and obscene riches are There are essentially four different monetary control (with by implication, So what currency arrangement should curbed, then we must have total control possibilities; either to keep the pound the government in Westminster’s an independent Scotland adopt? of the levers of power. Economic Sterling, join the Euro, stay within a involvement). This is essentially the A free-floating Scottish currency would independence cannot be achieved while Sterling zone as it were made up of Scottish National Party’s current seem an ideal solution, but there are monetary controls are applied in London. Scotland and the rest of the UK, and to favoured option, i.e keeping Scotland drawbacks. The Scottish economy The Scottish Socialist Party is establish our own separate currency. within a Sterling Zone. would be much stronger than that of the determined to continue to tap into The socialist option would see And despite ‘No’ campaign assertions rest of the UK (RUK) with a positive Scotland’s honourable tradition for a Scotland adopting its own currency to the contrary, it is inconceivable that trade balance to contrast with a massive fair, equitable society, and an protected against international Westminster and the Bank of England RUK deficit. Scotland’s overall balance independent currency, voluntarily linked speculation by limiting its convertibility would refuse to allow this to happen. of payments would also look much to the English pound initially, is surely into other currencies. However, in the But it would mean that Scottish better than that of the RUK. In these the best option in creating an market-driven capitalist world of today monetary policy would still be dependent circumstances, Scotland’s free-floating environment for a better Scotland.