This year will see the referendum on Scottish
independence. Considering the amount of press the issue is getting lately, I
wanted to take this opportunity to discuss what this could mean. Should Scotland
be independent?
Oliver Rawlings readers you have to understand
that this is a somewhat delicate issue. After all the Scots have always been
somewhat ambivalent to being a part of the United Kingdom; the rise of the
Scottish National Party, who have made Scottish independence a key element of
their political platform, tells us this.
However what we have to look at are the
financial consequences of such a move. Whilst Scottish independence is
certainly an attractive prospect, the reality is that it is going to cost and
considering the size of Scotland you have to ask whether it’s a cost they can
afford.
Experts are coming out now and predicting that
Scottish independence would cost millions of pounds. You can imagine why. There
are so many costs that you have to factor in when establishing yourself as a
separate nation.
Suddenly Scotland would be completely
responsible for building its own army, government, infrastructure etc. There
are a thousand costs that are attached to setting up a new nation and the
reality is that Scotland would have to find the money from somewhere. Tax
revenue may not be enough.
It’s a pattern you see whenever a new country
is formed. Look at what happened to the post-Soviet Republics in the early
90’s. They had major economic hardship and the reality is that breaking away
from the Soviet Union, as liberating as it was, cost them.
However currency is the issue that is worrying
most people. Many in Scotland have said that they would like to keep the pound
as their currency. They would certainly have to in the interim regardless, as
setting up a new currency takes time and you have to have a transitional stage.
It’s the idea of a shared currency that is
worrying economists everywhere. They look to the Euro and what happened there.
Many economists say that the shared currency meant that when some nations saw
economic hardship, the shared currency dragged others down with it. They point
to the recent Eurozone crisis to illustrate the point.
Scottish independence is a tricky subject. At
the end of the day it comes down to one question that voters will have to ask
themselves. Is separation from the rest of the Union worth the literal cost
that it will incur?
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