To become an EU member it is necessary for Scotland to
have its own currency. The SNP previously imagined that
this should be the pound sterling initially – presumably this was out of sheer nostalgia and fear of unsettling the
financially conservative Scottish population.
In truth this is the worst possible strategy since it leaves
Scottish fiscal policy at the mercy of English fiscal policy.
It is independence without the capability of independent
action on the primary economic lever.
By far the best approach, and the SNP have now agreed
with this, is to create a new currency immediately. (Perhaps ‘The Scot’ ? Then simply use S1 instead of £1.)
This will allow Scotland the necessary control over its own economy whilst it is establishing and building a new nation. Scotland needs to be able to control its own interest rates and borrowing.
Creating a new currency is not very difficult for a country
as rich and financially experienced as Scotland.
The Czech Republic and Slovakia did it easily enough when they split from being a single country. As did all seven of the former Communist Yugoslavian Republics when they became small independent countries and EU applicants and members.
None of these former communist countries had any, far less hundreds of years, of capital and financial expertise, as does Edinburgh.
Neither did they have huge amounts of oil collateral and cash reserves, as does Scotland.
By some expert estimates Scotland will have as much
as £50 billion in cash reserves when Scotland’s cash is
transferred out of Sterling, where it now sits. It will also have enormous North Sea Oil reserves.
Additionally Scotland will possibly have little or no national debt, giving it immediate access to massive international borrowing.
According to the independent European economic expert
organisation the OECD, (The Organisation for Economic
Co-operation and Development), Scotland’s already
existing energy resources, cash reserves and lack of debt
immediately makes Scotland the 15th richest country in the world per capita. This is well above the UK and England.
Virtually no country, including England, has this kind of
actively available economic strength.
This economic strength would immediately allow
Scotland to borrow up to $100+ billion in debt, to simply
bring it into line with the normal current national debt of
other countries (e.g.: UK).
From this massive amount of capital investment an entirely new Scotland can be built.
Scotland already has an operating Scottish Investment
Bank. It is a relatively simple matter to expand this agency into a Scottish Central Bank which would regulate the economy similarly to all national central banks.
It is also theoretically possible to lock a new Scottish
currency exchange rate to the Euro (as Denmark has done with the Krone), or even move immediately to the Euro.
These are simpler but less good solutions than to be in
full economic control of Scotland’s own new currency,
which can be quite easily established given Scotland’s
financial reserves and banking/financial experience.
With such cash reserves, no debt, and massive oil and
wind energy resources, it is possible to ask the EU and the
European Central Bank to underwrite Scotland’s currency
transition using North Sea Oil and Gas and Wind Energy as collateral.
This would allow Scotland to immediately re-join the
EU and begin supplying it with huge amounts of clean
energy more quickly, allowing the EU to escape from its disastrous reliance on Russian oil and gas. The ECB would support this move very strongly.
Russian energy contracts have damaged the entire EU, and the EU would be very keen to move to a reliable EU member as an alternative supplier of clean energy.
The EU has pledged to have 50% of its energy be clean
energy as soon as it possibly can. Scotland has the wind
energy and world leading expertise to supply much of this.
It also has huge amounts of windy open sea areas
suitable for offshore windfarms inside its territorial waters.
Currently Scotland is awaiting the final go ahead to begin
building the world’s largest offshore wind farm off East
Lothian.
Scotland can build an oil and gas pipeline and mainline
electricity cable straight into mainland Europe under the
North Sea. And it can start building as soon as it has a long term contract with the EU.
The ECB would probably make arrangements to underwrite such an important and necessary EU contract. Europe needs Scottish energy immediately and will finance and facilitate Scotland’s independence transition in order to get it. Scotland is already a former EU member with 47 years good standing and trust.
The EU will make all membership problems disappear because it is in their interests to do so.
Even if Scotland did not house 40% of all the US nuclear weapons in Europe which keeps Europe secure.
USA, NATO and the EU need and want independent Scotland to be a stable, friendly and reliable ally. As it always has been and will remain. And they will all help facilitate this.
