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Friday, 8 August 2014

Curran’s Core Concepts on Currency!

This is my perspective as a Scottish voter, neither currency expert, economist, politician nor banker, but very definitely a nationalist, a left-winger and a professional negotiator. Read it in that context, please!

THE CURRENCY QUESTION
THE RATIONALE FOR A NEW CHOICE

PRESENT STATUS
Pre-negotiation phase, forty days and forty night to go. Scottish Government’s position based on Fiscal Commission reports (and TWO) and White Paper, Scotland’s Future.

Fiscal Commission identified four main options -

MONETARY UNION with rUK – STERLING

MONETARY UNION with EU – EURO

NEW SCOTTISH CURRENCY - Fixed exchange rate

NEW SCOTTISH CURRENCY - Floating exchange rate

(N.B. The New Scottish Currency options includes either using sterling (‘the pound’) as the new currency or designating a new Scottish unit of currency (e.g. ‘the groat’)

The currency option can be presented alternatively as -

Monetary union with rUK – the pound

Monetary union with EU – the euro

New Scottish currency, floating or fixed – the groat

Continuing to use the pound, floating or fixed – the pound on sterlingisation)

The recommendation of the Commission was -

MONETARY UNION with rUK - STERLING

The Scottish Government declared this to be its choice of currency arrangement and announced its intention to negotiate the terms of monetary union with rUK after a YES vote.

The UK Government has declared this option to be totally unacceptable, in a variety of forums and statements from the PM, the Chancellor, senior advisers and Better Together leaders.

PERSPECTIVES
This UK position can be viewed by the Scottish Government from two main perspectives, and response options developed accordingly.

Perspective One
It is not an outright rejection, but a referendum campaign tactic to influence the Scottish electorate into voting No (the UK’s primary objective in the pre-negotiation phase)

If this fails as a referendum tactic and there is a YES vote, the tactic is converted to an anchoring statement aimed at enhancing UK negotiating team’s response to the Scottish Government’s opener of a currency union.

Perspective Two
The UK Government really means it: they will not - under any circumstances - accept a currency/monetary union with an independent Scotland.


PRE-NEGOTIATION PHASE:

THE CURRENCY QUESTION: THE RATIONALE FOR A NEW CHOICE

RESPONSE OPTIONS
On both Perspectives One and Two, the same three responses are available -

Hold currency union position till the referendum

or

Adopt a new  plan of Scottish currency/sterlingisation and withdraw plan to negotiate a currency union

or

Adopt a new plan of Scottish currency/sterlingisation but reiterate continued willingness to negotiate a currency union

TENTATIVE EVALUATION

Move to  Scottish currency under sterlingisation plan – withdraw plan to negotiate a currency union

POSITIVES
Immediate media brief, maximum publicity, most supporters happy, many non-SNP YES people much happier. Electorate in the main probably relieved and supportive.

Scottish currency perceived as greater independence, more Scottish control.

Control shifts to SNP Government (no longer dependent on negotiation - anticipates control after YES vote and independence)

Opposition on backfoot, panicked, reactive. Immediate plans activated to prepare for Scottish currency, civil service briefed, etc.
 
NEGATIVES
Presented as a retreat by UK, ‘fallback to Plan B’, cave-in under pressure, etc.

New attack on alleged negatives of Scottish currency option - expert negative arguments (e.g. Carney) mined for negative critical analysis

Share of national debt occupies centre stage, claims of  reneging, defaulting, etc. 

Spotlight on the new institutions and regulatory framework cited as potential weakness.

Pegging to sterling categorised as powerlessness, dependency.

TENTATIVE EVALUATION

Adopt a Scottish currency-sterlingisation plan but reiterate continued willingness to negotiate a currency union

POSITIVES
As under previous option, but with advantage of being seen still open to preferred option, flexible, displaying concern for rUK interests and relationship.

Even if UK cautiously enters currency union negotiations, powerful Scottish fallback already in place.

NEGATIVES
Potential of frustrating expectancies of YES supporters and non-SNP parties already on board for Scottish currency.

Danger of pressures building to force Scottish Government to abandon negotiation on currency union. Uncertainty for those contracted to new Scottish currency institutions.

SOME PREVIOUS BLOGS

17th February 2014

30th March 2014

16th November 2013

30th April 2013

You will also find an abundance of video clips on the currency argument, from every conceivable perspective, on my YouTube Channel – simply enter search term ‘currency’ in box

 

Tuesday, 29 July 2014

Tuition fees – extract from 2010 blog

This 2010 extract is still mainly relevant, I feel, and it may help some YES campaigners with the ‘fairness’ questions sometimes thrown at them.

1. It is Scotland’s responsibility to offer free education to Scottish students and students permanently living in Scotland.

2. It is not in Scotland’s economic interest to offer free education to students from Europe or the rest of the UK, however, present EU legislation compels us to offer free higher education to EU students – the Umbria/Cumbria rule. It does not, however compel us to offer free education to students from the rest of the UK, since the UK is regarded as the state by the EU.

3. It is in Scotland’s interest to attract paying students from the rest of the world, and ideally we would also like EU students to pay.

4. The demands from the UK that Scotland should offer free education to Students from England in the interests of ‘fairness’ is nonsense – it would negate the whole purpose of devolved government’s freedom to decide how its money should be spent in areas of expenditure over which it has discretion. If English students didn’t pay, some other area of Scotland’s expenditure would suffer, and in the light of the draconian fees (up to £9000 per annum) that the ConLib UK government is imposing, there would be a flood of English students to Scottish universities at the expenses of places for Scottish students.