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Economics professor says First Minister has ‘lost the plot’ on currency debate

Economics professor says First Minister has ‘lost the plot’ on currency debate

The First Minister has been accused of having “lost the plot in terms of the currency debate” by a senior academic.

It came as Alex Salmond gave a speech on the Isle of Man where he praised its economic model and accused Better Together of “a catalogue of blunders” through “chronic negativity”.

He said an independent Scotland could achieve a “triple A” economic status by following the model set out by small countries.

However, Glasgow University political economy professor Ronald MacDonald claimed any comparisons with tiny territories were wildly wide of the mark.

He said: “The proposal that an independent Scotland would adopt a form of sterlingisation along the lines of the system run in the Isle of Man seems to suggest that the Scottish Government have rather lost the plot in terms of the currency debate.

“For one thing, the Isle of Man is clearly a much smaller and differently structured economy than that of Scotland, and to suggest that just because sterlingisation works well there means it would work well in Scotland is without any empirical foundation.”

In his speech, Mr Salmond said: “Lots of small countries have retained their Triple A status, unlike the United Kingdom.

“Sweden, Austria, Switzerland, Denmark, Finland, Norway, New Zealand, Luxembourg, and the Isle of Man, have all retained their Moody’s triple A credit rating.

“They demonstrate on an international scale that creditworthiness is based on your economic prospects your underlying strength, not your overwhelming size.”

Mr Salmond added: “The experience of the Isle of Man shows us that self-governing territories can have credit ratings, within a sterling zone, which compare favourably with the UK’s.”