Sturgeon sets goals for new Scottish currency after independence

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Nicola Sturgeon promised that an independent Scotland would create its own central bank and adopt a new currency after a “careful and gradual” transition.

Outlining her economic plan for an independent Scotland at a briefing on Monday, the First Minister said the transition from sterling to a new Scottish currency should be as short as “achievable”.

His economic project was the third in a series of articles designed to demonstrate how an independent Scotland would function if it left its 315-year union with England.

Describing Britain as a country in economic decline, Sturgeon said “it is now clear that the UK does not offer economic strength or stability or financial security”.

She reiterated her commitment to Scotland joining the EU after independence and restoring freedom of movement with the world’s largest trading bloc. “With independence, we can join the EU and be back in the biggest trading bloc in the world,” Sturgeon said.

But she acknowledged that “independence is not a miracle cure, there is no guarantee of economic success for any country. . . Our success will depend on the quality of the decisions we make, it will be hard work.

The prime minister wants a new referendum to be held in October 2023, but the UK government has said little time has passed since the last vote in 2014, in which 55% of Scots voted to remain in the union.

Sturgeon has asked the UK Supreme Court to rule on whether Edinburgh’s devolved government has the legal power to hold another plebiscite without Westminster’s consent. She vowed that if the court rules against her, she would use the UK general election due by 2024 as a “de facto referendum”.

Under his economic plan, in addition to a new currency, a newly independent Scotland would establish its own central bank and debt management office, and strengthen the Scottish Revenue Commission, the country’s independent spending watchdog.

She also promised that Holyrood would seek to negotiate with the Westminster government on how to share liabilities and assets.

Sturgeon claimed that an independent Scotland would have a deficit similar to that of the rest of the UK, although she did not specify what that would be.

In 2021, Scotland’s deficit was 12.3% of gross domestic product, while the UK’s deficit was 6.1% of GDP.

The question of what currency would be used in an independent Scotland dominated the campaign before the 2014 referendum. Using the pound without the agreement of the Westminster government would leave Edinburgh without automatic access to support from the Bank of England in case of financial turmoil. It would also deprive the Scottish central bank of the ability to set monetary policy.

Iain Hardie, senior lecturer in international relations at the University of Edinburgh, said Sturgeon’s desire for a short transition period was an acknowledgment that he would be ‘sub-optimal’ for Scotland to use the pound without a formal monetary union.

“It is clearly recognized that being in an informal monetary union is a suboptimal position from which the Scottish government wants to exit as soon as possible,” Hardie said.

Opposition parties and anti-independence activists said Sturgeon’s plan failed to clarify the economic costs of independence.

“Much of what she has described is about the political choice of government, which does not require the immense cost, division and uncertainty of building a new state,” said Pamela Nash, chief executive of Scotland in Union, an anti-independence campaign group.

Douglas Ross, leader of the Scottish Conservatives, described the Edinburgh government document as a “lightweight SNP pamphlet”.

“It illustrates how thin the economic case for independence is,” Ross said. “It’s completely the wrong priority at the worst possible time for Scotland.”

Struan Stevenson, CEO of lobby group Scottish Business UK and a former Conservative member of the European Parliament, said the paper offered “fuzzy wishful thinking” that was rejected by business leaders in 2014.

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