Scotland is currently going through growing pains once again in its history, this time to establish independence, although interestingly Alex Salmond (First Minister of Scotland) wants out of the UK and for Scotland to govern itself as it pleases. However, he is happy for Threadneedle Street to govern its money. Strange? I thought so.
Will the Scots bring back coins like the merk, groat or bawbee? Stirling University Professor of Economics, David Bell wrote in the Scotsman on Friday that it makes sense for Scotland to keep the pound. He stated that jobless figures north of the border mirror the UK as a whole, and therefore it makes sense to keep the currency. This matters, as its easier to design a monetary policy for the whole of the UK as it now stands.
The Scots could always join the Euro, although again they would have no control on policy. Alternatively, they could adopt their own currency to avoid the unstable hyper-growth which happened to Ireland’s economy when it joined the Euro. As the Irish did not have control of interest rates to act as a breaking mechanism, it ‘overheated’.
Also, the Bank of England is part owned by Scotland (8.4%) as it’s a UK asset and the English are hardly in a hurry for the Scots to run off with this amount right now.
If Scotland was an employee, should it stay with its company and work with the current system or take a leap into the unknown? It would do well to remember carpe diem, and take a leap into the new (but potentially rewarding) unknown.
In my opinion, If Scotland wants to aim to be more Scandinavian and less like the eurozone then it must gets its own currency underway and go for it ‘all or nothing’.