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Showing posts with label Scottish currency. Show all posts
Showing posts with label Scottish currency. Show all posts

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!


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 -



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 -


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.

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.



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

Hold currency union position till the referendum


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


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


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

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.
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.


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

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.

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.


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


Monday, 12 December 2011

Alex Salmond back from China today with 6 questions for Cameron


On his return today from China after a week-long trade visit to promote Scottish interests and industries, First Minister Alex Salmond has made a key intervention on the European issue, writing to the Prime Minister David Cameron with six crucial questions about the UK's isolation within the European Union as a result of the Prime Minister's veto of a new European Treaty.

The First Minister said:

"It is extraordinary state of affairs that while the Scottish Government and our agencies were working hard to promote Scotland's interests and industries in China, David Cameron was blundering into apparently changing the UK's entire relationship with the European Union – without even discussing it with his own Lib Dem coalition colleagues, never mind the devolved administrations in Edinburgh, Cardiff and Belfast.

"Given that David Cameron took it upon himself to isolate the UK in Europe - from non-euro and the euro members alike - and without a word of consultation, he now needs to answer six key questions about the implications for Scotland of what he has done.  As the price of playing to his own backbenchers, the Prime Minister now leads a riven administration - with zero credibility in EU negotiations across the range of policy areas where Scotland's interests are crucially affected.

"Last week's developments in Brussels demonstrate that Scotland urgently needs a voice at the top table when our vital national interests are being discussed, by becoming an independent member state, instead of being shut out of the room."

The First Minister's questions to the Prime Minister are:

1. What risk assessment, if any, did the UK government undertake of the likely impact of its veto decision on investment into Scotland and the UK, and on negotiations affecting key Scottish industries such as agriculture, fishing, and financial services - where qualified majority
voting already applies?

2. What assessment, if any, was made of how Scotland's interests will be affected in the EU by being represented by a UK government that is excluded from important decision-making meetings, which will impact directly on Scotland?

3. Given the serious impact of a UK treaty veto, why did you not consult with the Scottish Government and other devolved administrations on the use of an option which Mrs Thatcher and John Major in their negotiations both managed to avoid?

4.  Can you confirm the reports in the Italian and UK press that you told the new Italian Prime Minister that your negotiating stance was based on the 'big internal problems' you would face if you had agreed to the Treaty change?

5. With key negotiations ongoing concerning the EU Budget, agriculture and fisheries, how do you believe that the important Scottish interests involved will be affected by being represented by a UK member state which has isolated itself?

6. Will you agree to an urgent meeting of the Joint Ministerial Committee, involving all four of the UK administrations, so that the full implications of your decision can be considered?


The Senior Special Adviser
First Minister of Scotland
St Andrew's House
Edinburgh  EH1 3DG

Sunday, 11 December 2011

Cameron’s veto, Europe and Scotland

veto from the Latin I forbid – a constitutional right to reject a legislative amendment.

Cameron’s fiasco at the EU summit was a disastrous negotiating and diplomatic failure in my view, but it has positive aspects as far as Scottish independence is concerned. (I may analyse this from a negotiator’s perspective later.) Whether they offset the undoubted threats caused by the UK being marginalised in Europe remains to be seen, but let me proceed to what I know may be regarded as a dangerously rash statement, one which I will probably regret.

I think the Scottish Government may have to re-think its timescale for the independence referendum, and by that, I mean bring it forward. 2014 at the earliest is now beginning to look like too late.

To use the telling phrase of an SNP branch colleague, the present situation has the feeling of a phoney war, a term coined to describe the period from September 1939 to May 1940 – from the UK’s declaration of war against Germany to the Battle of France and Dunkirk.

I recognise all the commitments made to timing in the second half of the term, repeated many times by the First Minister and others, but circumstance alter cases. The global situation and now the European situation have experienced a quantum shift since April/May of 2011. The new, deeply unstable situation created by David Cameron will potentially seriously damage the UK economy, and soon.

His government has no mandate from the people of Scotland, and unless Scotland, as a pro-European country, wants to be shackled to an anti-European dinosaur and retreat into the insularity of an offshore island of Europe, the Scottish people must have the chance to speak as soon as possible.

If the Coalition falls, Scotland would have the same voice that it had in May 2010 at a general election. What song it would sing is another question …

If it sang the same song, it would still be powerless against the Westminster numbers. There is little doubt that had Labour been in Government, the outcome of the EU summit would not have been much different. A general election now would probably produce another hung Parliament and another Coalition, even if there was a polarisation of the vote in England to Labour and the Tories.

It might result in something much worse if the extreme parties of the right caught a popular mood of anti-Europeanism coupled with a distrust of the three failed major parties – Tories, Labour and LibDems.

No one calls a referendum they don’t expect to win, but no one can ever be certain of the outcome of a referendum, especially in rapidly changing times.

Polls are snapshots of popular opinion at a point in time, but they are like a snapshot of a sunny day in Edinburgh – a moment later the sky opens and the wind cuts to the bone. And if you are lucky, the clouds part, the winds abate and the sun shines again. If you are not, and you are are not clad for heavy weather, a bolt hole must be found, and anyone that promises shelter will do.

A great Englishman once said "There is a tide in the affairs of men, which, taken at the flood, leads on to fortune."

A great Scotsman, Robert the Bruce, was faced by a stark choice on of the 23rd and 24th of June 1314 - to be prepared to give battle against superior forces or retreat. Emboldened by his victory over an English knight, Henry de Bohun, in single combat, and by the unexpected route of a force of 300 hundred English knights under Clifford, he still was faced with the decision to either give battle or retreat. He chose to give battle, and to risk all for Scotland’s freedom.

Alex Salmond is not a 14th century knight, and he is not playing 14th century politics. But he will not be oblivious to the parallels. Bruce had not intended to give battle, but he reacted to rapidly changing circumstances, especially to the knowledge of the impact of his two unexpected successes on the already low morale of the superior force.

The First Minister has already killed his Henry de Bohun and his force have routed their Clifford. How will he assess the dynamics of a rapidly changing situation on his return from China?

I was puzzled and disappointed that no Scottish Government minister chose to appear of The Politics Show Scotland today to discuss the Eurozone/UK crisis. I dismiss out of hand the explanation that prior commitments or diaries had anything to do with this decision.

I also dismiss the inevitable unionist opposition conclusions – that the SNP has no coherent policy on Europe or that the party is a one-man band, waiting for Godot.

I think we can be reasonably certain that Scottish Government ministers have been in close contact with Alex Salmond, and that there is a bigger – perhaps a much bigger – game afoot.

Are we preparing to emerge from the Tor Wood?