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Indie Scotland says they might keep Sterling. Westminster says they won't let 'em. Can they?

As the subject, really.

Alex the Salmon says that, post-independence, Scotland may retain Sterling. Westminster, in return, says "No, you won't. We won't let you."

But - can they? Surely any small country can declare their official currency to be anything damn well want, without having to have "permission" from that currency's usual home.

The Euro's used in several non-EU countries, including Montenegro - I can't believe that the ECB has said to the Montenegran gov't "Yep, you feel free." So there must be some parallel mechanism going on, with absolutely no way of controlling it.

At the very outside, there could be a Scottish Pound officially set up, with an exchange rate pegged £1 = S£1, I s'pose.

Reply to
Adrian
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They can keep using it, but they have no control over it... hardly independence.

Reply to
Tiddy Ogg

but would Scottish banks still be allowed to print their own pound notes?

Robert

Reply to
RobertL

I would presume not. Even if they did, they'd be even harder to spend in the rest of the country than they are now.

The practical approach, I guess, would be to issue their own currency but peg it to Sterling through a fixed exchange rate.

One Pound Sterling = One Pound Stirling?

It'd probably just be a short-term solution, though, since if they wanted to join the EU, they'd have no choice but to go Euro as soon as the criteria were met. Should be fun for the finance minister to see how long they can avoid that...

Reply to
Adrian

Why would they have no choice other than to adopt the Euro?

Chris

Reply to
Chris Blunt

Because the EU's membership criteria require all new members to adopt it as soon as the criteria are met. Some pre-existing members escaped because we negotiated an opt-out when it came in.

Same for Schengen.

Reply to
Adrian

Thanks. I didn't know that.

My guess it they would probably try to continue with a Scottish Pound as an independent currency, but linked to the Pound Sterling.

The Republic of Ireland used to have the Irish Punt, which was similarly linked to the Pound for a long time before they joined the Euro.

Chris

Reply to
Chris Blunt

I believe there was a modest convergence in the Punt and Pound before the adoption of the Euro. I would hardly describe them as being linked?

Reply to
Fredxxx

It was to start with, they let it float in the 70s (and onwards)

tim

Reply to
tim......

Up until 1980 it had been an almost exact 1:1 exchange rate for decades previously. Even after that it still fluctuated above and below parity with the Pound, although by a much wider margin.

Chris

Reply to
Chris Blunt

Attempts to peg a country's exchange rate to that of another country always end in disaster - eg Argentina's attempt to track the $.

Another looser example would be the ERM.

Reply to
Jim

Not so with the Hong Kong Dollar peg to the US$.

It was pegged at the rate of 1US$=7.8HK$ over 30 years ago, and has consistently been maintained at that rate ever since.

Chris

Reply to
Chris Blunt

Why not? But Scottish notes might become even less accepted in England unless they are backed by Bank of England notes 1:1 as they are at the moment.

Reply to
s_pickle2001

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