The Daily Telegraph

Sturgeon pound plan a ‘recipe for mayhem’

- By Daniel Sanderson scottish correspond­ent

AN INDEPENDEN­T Scotland would have its own currency, Nicola Sturgeon has confirmed, after admitting that her plans to keep the British pound for the short term will block EU membership.

The First Minister, who yesterday revealed her new economic case for independen­ce, said a Scottish state would adopt a Scottish pound “as soon as is practicabl­e” but refused to give a timescale of how long this would take.

Unionists denounced her plan as a “recipe for mayhem”, in which they claimed Scotland would be shut out of both the EU and UK single markets.

Ms Sturgeon conceded for the first time that Scotland would not be able to rejoin the EU while it continued to use the British pound, as monetary policy would be set by the Bank of England.

Despite rejoining the EU being central to the SNP’S case for independen­ce, member states are required to commit to treating their exchange rate with the euro as a matter of “common concern”.

Daniel Johnson, Scottish Labour’s finance and economy spokesman, said: “The SNP’S plans would leave Scotland isolated and cut off from our biggest trading partner, making Brexit look like a walk in the park by comparison.

“Nicola Sturgeon is peddling empty promises and fantasy economics at the expense of Scottish [jobs] and businesses. Scotland using the currency of another state without a shared political system is a recipe for mayhem.”

Ms Sturgeon’s paper states that an independen­t Scotland would set up a central bank to report on the criteria and economic conditions for moving to a Scottish pound, with a final decision to be taken by Holyrood.

The new bank would be ensure that deposits of up to £85,000 were guaranteed by the Scottish Government, if a bank became insolvent, but Ms Sturgeon was unable to say how much this would cost. The independen­t Institute

economy, but rejoining the EU would mean more trade barriers with the UK, damaging a much larger export market.

“The Scottish Government’s new paper on post-independen­ce economic plans makes all the right noises on how the public finances would be [managed],” David Phillips, associate director at the IFS, said. “But, it skirts around what achieving sustainabi­lity would require in the first decade of an independen­t

‘Nicola Sturgeon is peddling empty promises and fantasy economics at the expense of Scottish jobs and businesses’

Scotland: bigger tax rises or spending cuts than the UK government will have to pursue.”

Ronald Macdonald, professor of macroecono­mics and internatio­nal finance at the University of Glasgow, said the proposals lacked credibilit­y.

“This variant of sterlingis­ation is even worse than previous iterations since it entails massive borrowing of foreign exchange reserves to support such a system, which would be neither credible nor sustainabl­e,” he said.

“The [SNP] currency plans are nothing more than a recipe for a financial crisis on day one of [independen­ce].”

 ?? ?? for Fiscal Studies (IFS) said it was “highly likely” an independen­t Scotland would need to make bigger cuts in public spending or introduce higher
Unionists have said that Nicola Sturgeon’s currency plans ‘would leave Scotland isolated from our biggest trading partner’ taxes than the UK in the first decade of nationhood.
It added that a policy of increasing immigratio­n would boost the size of the
for Fiscal Studies (IFS) said it was “highly likely” an independen­t Scotland would need to make bigger cuts in public spending or introduce higher Unionists have said that Nicola Sturgeon’s currency plans ‘would leave Scotland isolated from our biggest trading partner’ taxes than the UK in the first decade of nationhood. It added that a policy of increasing immigratio­n would boost the size of the

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