Sturgeon says indy currency plan ‘won’t be like Panama’
● FM returns to 2014 battleground over use of sterling
Nicola Sturgeon has moved to settle fears about Scotland’s future currency arrangements in the event of a vote for independence in a second referendum.
The First Minister said Scotland won’t end up like Panama or Ecuador, which use the US dollar without any say on US monetary policy. She also said Scotland wouldn’t be forced into the euro in the event of a Yes vote in a second independence referendum.
It comes after a major report recommended Scotland should retain sterling as its currency if it voted to leave the UK.
An independent Scotland would not end up like Panama, Nicola Sturgeon has said as she sought to allay fears about using the pound without a formal currency union in the event of a Yes vote in a second referendum on independence.
The First Minister also insisted Scotland would not be forced into the euro after independence despite EU rules requiring new applicants to the bloc to adopt the single currency.
It follows the publication of a major report on Scotland’s economy, commissioned by the SNP, which recommended the country should retain sterling as its currency if it voted to leave the UK.
Following a transition period – possibly of some ten years – an independent Scotland could then look to set up its own currency if six key tests were met, the Sustainable Growth Commission said in its report.
Countries such as Panama and Ecuador use the US dollar without any say on US monetary policy, while Montenegro and Kosovo use the euro under similar conditions.
The SNP is currently considering the report’s findings, but Ms Sturgeon said retaining the pound post-independence would not leave Scotland “in the same position as Panama” – where the US dollar is legal tender.
The SNP leader was pressed on the issue when interviewed by the Politico news website on a visit to Brussels.
She stated: “If Scotland was to use the pound out with a currency union, even for a transitionary period, I don’t think it puts us in the same position as Panama for example.
“The term sterlingisation that is often used is when a country chooses to use a currency that is not its own.
“The pound is Scotland’s currency right now, the pound as everybody knows is a fully tradeable international currency.
“There is absolutely nothing to stop Scotland using the pound and it would be a con- tinuation of what we do right now. Of course the recommendation that was set out in the report was to use the pound but also to take steps including the establishment of a Scottish Central Bank, that would prepare the way for a move to a Scottish currency if that was considered to be the right option.”
In the run-up to the 2014 independence referendum, the then SNP leader Alex Salmond argued Scotland would be able to use the pound in a formal currency union with the rest of the UK – an idea which was immediately rejected by all the pro-uk parties.
But last week Bank of England Governor Mark Carney told the MPS on the Treasury select committee such an arrangement would be possible.
Kirsty Hughes, director of the Scottish Centre on European Relations (SCER) think tank, warned that an independent Scotland would be unable to join the European Union while it was still using the pound.
“There is absolutely nothing to stop Scotland using the pound and it would be a continuation of what we do right now”
NICOLA STURGEON