The Courier & Advertiser (Fife Edition)
Scots told to consider fresh currency plan
Proposal to keep the pound was ‘mistake’
A Nobel Prize-winning Scottish Government adviser has said the SNP’s plan to keep the UK pound after independence was a mistake and urged Scotland to consider its own currency.
Joseph Stiglitz, the internationally-renowned economist who sits on Nicola Sturgeon’s Council of Economic Advisers, said a free-floating Scottish pound could be used to stimulate the economy and lower its towering deficit.
Scotland spent nearly £15 billion more than it generated last year – a 9.5% deficit which outstrips crisis-hit Greece.
The Scottish Government is examining ways to keep Scotland in the European Union (EU) after Brexit but critics have pointed out the EU requires a deficit below 3% and a commitment to join the euro.
Mr Stiglitz said taking Scotland into the euro would be “a mistake” but insisted there is a greater willingness in the EU to accept countries which do not want to use the euro.
Alex Salmond, the former First Minister who appointed Mr Stiglitz to his advisory team, has said the shared currency plan was a key weakness in his 2014 independence campaign.
In the run-up to the referendum in 2014, the Fiscal Commission Working Group made a “clear recommendation” for Scotland to retain the pound in a formal currency union with the rest of the UK, if there was a Yes vote.
Mr Stiglitz told BBC Radio Scotland’s Good Morning Scotland programme: “They wanted the smoothest transition possible. They wanted to say that we could move from the current economic arrangement to another one while keeping our currency and keeping other forms of institutions.
“I think, in hindsight, that may have been a mistake.
“It would be a mistake to join the euro, by the way, so what they would have needed to do, perhaps, was resurrect the Scottish pound and let it float.
“If there was a Scottish pound floating, you could help stimulate the Scottish economy. The deficit would come down to make it acceptable to joining the EU.”