An independent Scotland could avoid tying its monetary policy to England or Germany by having its own currency, according to research led by a former Treasury and Scotland Office statistician.
Economic Policy Options for an Independent Scotland, a report by Dr Jim Cuthbert and his economist wife Margaret, takes “a radical look” at Scotland’s choices.
Commissioned by nationalist group Options for Scotland and think-tank The Jimmy Reid Foundation, the report said it is “a given” that Scotland could be a viable independent country.
It sets out economic options such as an independent currency and freedom to choose inter-national alliances, and potential constraints such as the high degree of foreign ownership of land and businesses and inter-national trade rules.
It rejects critics who say Scotland is too small to have a stable independent currency, pointing to international examples and arguing that using the pound or the euro would cede fiscal control to England or Germany.
“Without its own currency, can Scotland escape from the drawbacks of having a monetary policy delivered primarily in the interests of the South East of England, or indeed of Germany, if Scotland chose to join the euro?” it says.
“On the other hand, it is sometimes objected that an economy of Scotland’s size, with its own currency, would have an inherently unstable exchange rate.
“This is not necessarily so in fact, countries like Norway, Denmark, and Switzerland have managed their currencies historically in a more stable fashion than the UK.”