Thursday, 30 January 2014
BoE Governor's doesn'r rule out an jount currency after Scottish Independence.
Before the - Bank of England Governor Mark Carney speech yesterday it was speculated that by the No side and the media in general he would pour cold water on Scotland keeping the pound after Independence.
But hey were clearly wrong.
However he merely stated what is plainly obvious that an independent Scotland that keeps the pound would have to give up some national sovereignty or risk the kind of problems exposed by the euro zone crisis.
Carney, speaking in detail for the first time on issues related to September's independence referendum, took care to avoid taking sides in the increasingly heated campaign.
In a speech to Scottish business leaders, he delivered a sobering message, stressing that a breakaway Scotland and the rest of the "United Kingdom" would have to secure complex agreements on "tight fiscal rules" and a banking union, or face "clear risks" that could threaten a currency union.
"Those risks have been demonstrated clearly in the euro area over recent years," Carney said. "In short, a durable, successful currency union requires some ceding of national sovereignty."
What he seems to have failed to emphasise is that this applies to both an Independent Scotland and the Rump that remains and Scotland will be an equal in any "currency union".
UK ministers have said such a deal would result in Scotland effectively having to hand over control of interest rates and borrowing levels to a foreign country.
The problem with the NO camp is that they are like someone whose partner seeks a divorce thinks that they will be entitled to keep everything from the marriage.
It is obvious that an Indepmdent Scotland will have some way in this currency union.
But the Governor instead made it explicitly clear that the Bank of England will implement the agreements reached between the Scottish and Westminster Governments.
So maybe its tine the NO camp at least acknowledge that it is in the interest of both sides to accept a currency union after a YES voting more likely after recent polls rather than dismiss it.