tag:blogger.com,1999:blog-2546602206734889307.post291553360112836212..comments2024-03-28T04:29:22.717+00:00Comments on mainly macro: Scotland's future exchange rate regimeMainly Macrohttp://www.blogger.com/profile/09984575852247982901noreply@blogger.comBlogger19125tag:blogger.com,1999:blog-2546602206734889307.post-31252682604572004092014-12-19T05:19:44.109+00:002014-12-19T05:19:44.109+00:00Its really good post. the post shared is really in...Its really good post. the post shared is really interesting and also share the very useful information related to Money Exchange Rates.Bitcoins Norwayhttp://bitcoinsnorway.com/noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-23843850692456642182014-11-10T12:13:29.224+00:002014-11-10T12:13:29.224+00:00Thank you for sharing this blog with us. It is to ...Thank you for sharing this blog with us. It is to useful to us.Money Exchange Rates Converterhttp://bitcoinsnorway.com/noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-52975897786414171202014-05-20T20:10:02.830+00:002014-05-20T20:10:02.830+00:00@Jamie
"In the negotiations around Irish depa...@Jamie<br />"In the negotiations around Irish departure from the UK in the 1920s, debt negotiation was a key issue. The parties started by making fairly maximalist demands as to what part of UK debt it would assume as equitable, the UK claiming a full proportionate allocation, and Ireland counter-claiming for a huge sum, including in-effect reparations for what it understood to be English wrecking of Irish industry from the point of Union in 1800. <br /><br />An agreement was reached which saw Ireland assuming some debt that would have been a significant burden to the Irish economy but was much less than the original UK position. But in fact – and here of course the politics of the time also played a role – it was ultimately made to pay – well a surprising £0.00."<br /><br />http://www.futureukandscotland.ac.uk/blog/currency-reflections-legal-issuesAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-56243165551232346122013-05-09T19:03:37.829+00:002013-05-09T19:03:37.829+00:00I think you are making the mistake, this isn't...I think you are making the mistake, this isn't anything to do with a category mistake - you have misunderstood what it means. Clearly if there is a continuing UK they can own the physical and non-physical assets of the UK, just as they do now. Only in the case where there are two successor states does the question arise as to who is the owner of the assets. <br />The UK, as continuing state, will own the assets, then Scotland as a new state, will begin negotiations on what will be transfered, which will include assets and their liabilities. Debt free would be an option, but at the cost of being asset free.<br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-42215599289984966812013-05-04T17:46:06.586+00:002013-05-04T17:46:06.586+00:00I think this link does as well as any I've see...I think this link does as well as any I've seen to answer the question. http://blogs.channel4.com/factcheck/factcheck-can-scotland-avoid-paying-uk-debt/13362?replytocom=50988Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-33387632139383084492013-04-29T23:51:00.534+00:002013-04-29T23:51:00.534+00:00I think lots of people are missing the point, or m...I think lots of people are missing the point, or making what philosophers call a 'category mistake'- the rest of the UK does not own the currency any more than it owns the embassies or the pension liabilities. All assets and liabilities are up for negotiation on independence. Otherwise, the rest of the UK (should it wish to unilaterally seize assets like the bank of england) must take all the liabilities as well, in which case Scotland will start with a clean slate and be debt-free. Obviously, any rational person knows that the former rather than the latter will prevail, which is why george osborne refused to rule out a currency union in his interview with gordon brewer, despite claiming it would be a terrible idea and those scots should know their place... Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-30333534171563651972013-04-28T14:36:07.530+00:002013-04-28T14:36:07.530+00:00Neil Wilson,
Yes of course rUK would have a choic...Neil Wilson,<br /><br />Yes of course rUK would have a choice on whether to enter a currency union. That is the point of Osborne’s intervention this week.<br /><br />From Scotland’s perspective, voting for independence and then asking to form a currency union seems like a poor strategy. Scotland already has a currency union with rUK. Why would it vote away that union only to immediately try to negotiate it back? I don’t understand Salmond’s strategy. If Scotland wishes to retain the pound but to have the maximum practical political freedom within that currency union, it would be a much more effective strategy to push towards “devo max” from the inside of the UK. It would be much harder for rUK to resist. I doubt that Scotland will vote for independence, so I expect that in a couple of years the strategy will revert to a push for “devo max”.<br /><br /><br />Jon Livesey/Anonymous,<br /><br />The SNP see the situation on debt differently from you. Here is John Swinney (Finance Secretary):<br /><br /><br />Mr Swinney said: "What the Treasury's paper is designed to do is to make things sound as difficult and obstructive as possible. I don't think it is a helpful contribution."<br /><br />He said there was nothing to stop an independent Scotland using the pound outside a formal sterling zone in a move which would "liberate" the country from taking on a £125 billion share of the UK's national debt.<br /><br /><br />http://www.heraldscotland.com/politics/referendum-news/chancellor-pours-scorn-on-snp-currency-union-plans.20874446<br /><br /><br />My question remains. Are there any precedents for currency and debt sharing after a declaration of independence in advanced/European countries? For example, did Ireland take a share of the UK’s debt when it declared independence or did it just walk away? If anyone has any links on this I would be grateful.Jamienoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-58554661359321853652013-04-25T10:01:59.191+00:002013-04-25T10:01:59.191+00:00@jon
They will get the message likely via the med...@jon <br />They will get the message likely via the media:<br />-no benefit in it for the UK.<br />-and Scotland could be the next Spain if it increases debt too much or allows bubbles that subsequently burst.<br /><br />113 pages you always have to add a good summary. I would start with the summary and use the rest as annex/background material. As you say not many will read 113 pages (and boring stuff for most). And fewer will even start with it than when it is a 4,5,6 page summary (preferably less) with annexes.<br /><br /> Typical weakness of especially economic papers. The summary is usually rubbish/highly unpractical. All the important info should be in the summary, but it hardly ever is. So you have to read the whole paper that hardly ever somebody does.<br /><br />Making it a bit of a pamflet imho is a bit doubtful, nothing hurts more than the simple truth presented in a businesslike way. And the basic message is hard enough by itself you donot have to spim it more. Riknoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-35031992210513050702013-04-24T21:59:58.498+00:002013-04-24T21:59:58.498+00:00By the way, I am slogging through the Treasury doc...By the way, I am slogging through the Treasury document, and although it's a brilliant backgrounder, at 113 pages it is unlikely to achieve its goal of informing the voters. What will happen instead is that the voters will hear conflicting accounts of what the document says and what its motive are. Very few will actually read it, which is a pity because if they did, they would get a good view of what's wrong with the euro as a side-benefit.jon liveseynoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-87497949096829307202013-04-24T19:43:11.485+00:002013-04-24T19:43:11.485+00:00I really can't follow your argument here. The...I really can't follow your argument here. The requirement to negotiate EU membership is an EU requirement. It's not the UK leaving the EU - if only - but Scotland leaving the UK and becoming a new country. A new country has to apply to join the EU. Not rocket Science.<br /><br />Dividing up UK assets and liabilities is a UK issue, not an EU issue - at least not so far - so that would be a separate negotiation.<br /><br />That the debt Scotland would inherit would be denominated in Sterling is a complication, but it's one that can be managed. The debt would be English law debt, so Scotland would be unable to impose haircuts without defaulting, but hey, Independence has its price, no?jon liveseynoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-54422876059851086552013-04-24T18:34:44.259+00:002013-04-24T18:34:44.259+00:00I don't see your point here. Why should the an...I don't see your point here. Why should the analogy be applied consistently across two different institutions, with different rules?<br />The debt was has arisen because the government used it either fund capital projects or current expenditure. Both were benefits or are continuing benefits, so the debt goes with the assets. If you don't want the debts, don't take the assets (this isn't intended to be a practical suggestion, the Treasury isn't likely to repossess a bridge).Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-7968208711140901522013-04-24T17:55:38.737+00:002013-04-24T17:55:38.737+00:00It's an interesting situation; my personal vie...It's an interesting situation; my personal view (assuming a 'yes' vote) would be for a temporary currency union until a Scottish Pound is created. I assume it would take a couple of years to establish a central bank and new currency during which reasonable fiscal policy would have to be implemented; however, the transition to a sub 3% deficit (my metric of a sensible deficit ceiling) would be difficult to achieve assuming deficit reduction stalls in 2013-14. <br />However, all manners of macro aside, surely the glaring contradiction are the words "independent" and "EU membership"; you cannot be independent within the EU (Euro or no Euro). Given the profile of Scottish GDP (high net exports relative to rUK) an independent currency would be the most sensible option. This would require fiscal discipline with regards to oil revenue which is highly doubtful given all the talk of a "fairer" Scotland. Fairness is an idiosyncratic ideal and I doubt my definition of the word bares any resemblance to the government's.<br />But, unless EU membership is ruled out or at least put to a referendum I will be voting unequivocally against. <br /><br />Great blog, totally unpoliticized.stuart rowannoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-19861740946205243112013-04-24T08:44:27.393+00:002013-04-24T08:44:27.393+00:00Anyway the overall picture is that electorally Sal...Anyway the overall picture is that electorally Salmon or what's his name is almost certain to be found out. He simply has no proper answers to serious questions that will be asked. Like EU membership before and now the currency. Next one probably: the border, Schengen.<br />Or what to do if the UK leaves the EU? The guy is simply an incompetent twat that believes if things are said sufficient times they will happen.<br /><br />Hard to see how a majority could vote for something that might realistically mean: no EU membership for a few year; huge uncertainty about the currency and possible forced Euro membership and difficult border arrangements with the UK for both trade and travellers. The alternative with all its disadvantages looks a far better bet and a far more certain one.<br />Plus the leadership as said simply looks crap and incompetent (no answers on important questions; no real solutions for real problems) and does everything to be found out considerably before the relevant vote/referendum. <br />Campaigning for a cause for months, as he likely will do, that will be butchered in the ballotbox won't help either. Just make you look a bigger moron than you already are. <br /><br />Same with other things where it would be a surprise he had an appropriate answer on. Foreign service (probably relying in his conception on the UK); military (id). The guy simply hasnot got a clue what a seperate nation means. It means an own army, own CB, borders and that kind of stuff. And certainly not sherrypicking when it is not your call. Riknoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-65383436962678869622013-04-24T06:01:19.664+00:002013-04-24T06:01:19.664+00:00There is always the line running through the Scott...There is always the line running through the Scottish independence vote discussion that forgets that the rest of the UK has a choice in the matter.<br /><br />If the rest of the UK doesn't want to be in a currency union with the Scots - and given that would require the rest of the UK parliament to give up its currency sovereignty that is almost certainly the case - then there is nothing the independent Scots can do to force that to happen.<br /><br />The rest of the UK can simply change its currency arrangements as required - even if that means adopting a 'new pound' and redenominating.<br /><br />If that means removing the power of the current Bank of England to issue the currency, then that is what will happen.<br /><br />The lesson of the Eurozone is clear - one parliament, one currency. If Scotland wants to be sovereign then it needs its own scrip - and with oil wealth helping with the external trade issues it shouldn't be so reticent in pushing forward with that idea.<br /><br /><br /><br /><br />NeilWhttps://www.blogger.com/profile/11565959939525324309noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-46474855448954909762013-04-24T01:45:16.119+00:002013-04-24T01:45:16.119+00:00Through E-MAI is indeed possible to make money by ...Through E-MAI is indeed possible to make money by just reading emails! <br />Join now through my invitation!<br />http://www.e-mai.net/rjsrjshttp://www.e-mai.net/rjsnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-68490865657090378962013-04-23T23:47:37.060+00:002013-04-23T23:47:37.060+00:00A very interesting post. As a Scot who lives in E...A very interesting post. As a Scot who lives in England, I have doubts that Scotland will vote for independence. However, as you say, we should be prepared for that eventuality. <br /><br />I would like to ask some questions based on your post. I do not know the answers so am asking out of ignorance rather than challenging your views.<br /><br />Scottish independence could be viewed as one of two analogies. It could be seen as a divorce. In that case, assets and liabilities would be shared out in a way that is fair to both parties. Alternatively, it could be seen as an errant child leaving home. In that case, assets and liabilities would stay with the parents. The child would start out with a clean sheet.<br /><br />For EU membership, the UK government seems to see Scottish independence as the errant child analogy. rUK would continue to “own” the UK’s EU membership. Scotland would start with a clean sheet and would have to apply for EU membership. This would probably mean that, on entry, Scotland would be required to sign up to the Euro. The Scottish government, however, uses the divorce analogy. Both ex-partners would have a part ownership of the existing EU membership and both would start on an equal footing. They assume that both ex-partners would retain EU membership. Scotland would then have more freedom on whether or when to join the Euro.<br /><br />For national debt, the UK government changes the analogy to a divorce. Now Scotland is a partner which must take on its share of UK national debt. The Scottish government is more consistent. It sees this aspect as a divorce too so agrees about taking on a share of the debt. In your post, you seem to assume a divorce.<br /><br />For ownership of the currency and the central bank, the UK government analogy reverts back to the errant child. rUK would “own” the currency and the central bank. Scotland would have to ask permission to use at least some aspects of these things. I am not clear what the Scottish government position is here although I assume it would stick with divorce. You seem to assume an errant child.<br /><br />If I have understood correctly, the UK government and you are mixing analogies. Scotland should take on its share of national debt. However, the Scottish government should then ask permission from the rUK government to have any say in the running of the currency in which that debt is denominated. That seems wrong to me.<br /><br />If we follow the divorce analogy consistently then Scotland should take its share of national debt but must have an equal say in the running of the currency and the central bank. Otherwise, Scotland would be taking on debt in a currency over which it had little or no control. rUK and Scotland would have to negotiate a relationship which would revert to something like the “devo max” option which most Scots would probably prefer anyway i.e. create a UK version of the type of governance which the Euro-zone would need in order for the Euro to work properly.<br /><br />If we follow the errant child analogy consistently then rUK should have exclusive ownership of the currency and the central bank but I can’t see why Scotland should agree to taking any share of the UK national debt irrespective of what currency Scotland adopted (unofficial use of pound, own currency or Euro).<br /><br />Here are my questions to you:<br /><br />1) Which of my two analogies do you think is most appropriate, or do you see an alternative analogy?<br /><br />2) Do you agree with the apparent inconsistencies of mixing analogies and, if so, how would you resolve them?<br /><br />3) Are there any precedents for currency and debt sharing after a declaration of independence in advanced/European countries? For example, when Estonia split from the USSR, or when Czechoslovakia split in two, or when Ireland split from the UK? In particular, did any errant children take on part of the debt of the parent without an equal say in running the parent currency and central bank?Jamienoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-5286084079425326972013-04-23T20:16:39.018+00:002013-04-23T20:16:39.018+00:00I think that there is a parallel here with the his...I think that there is a parallel here with the history of the Irish currency post-1922. Most of Ireland's trade was with the UK, and having an Irish Pound with one for one parity with Sterling was seen as a solution that offered stability.<br /><br />However, there were problems in that a small economy sharing a currency with a large economy tends to inherit the larger economy's inflation rate, which was a problem for Ireland in the Seventies.<br /><br />And then, the larger economy can make policy decisions that are inconvenient for the smaller, such as the UK's decision to stay outside EMS when Ireland joined. Sterling appreciated strongly in the Eighties, and in the end Ireland had to drop parity with Sterling, and the Irish Pound traded as low as 80p Sterling - in some ways the ERM story told backwards.<br /><br />I'd say that if Scotland does vote for independence - as a part Scot I hope they don't - adopting Sterling or the euro will present more or less the same problems of intensive supervision the periphery are currently experiencing. But if a Scottish Pound is adopted then Scotland can change its monetary policies as circumstances change, just as Ireland did.<br /><br />It won't be a free lunch, since of course more than a currency is involved in running an economy. Personally, I'd be more worried about RBS and defence related Scottish industry than about the Scottish Pound.<br /><br />www.centralbank.ie/paycurr/notescoin/history/documents/spring8.pdfjon liveseynoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-67047579744027426452013-04-23T13:43:02.953+00:002013-04-23T13:43:02.953+00:001. Do not see the advantage for the UK to have som...1. Do not see the advantage for the UK to have somebody infering with your monetary policy.<br /><br />2. Legally it is a mess. Scotland will be obliged to join the EZ. It will likely be obliged to join the banking union full scale.<br />As EU membership will not be from day 1 the EU conditions will still not be known while the Pound/BoE conditions should already be working. Riknoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-87096048726102957112013-04-23T13:37:23.906+00:002013-04-23T13:37:23.906+00:00Nice post. But given that the Scottish banking an...Nice post. But given that the Scottish banking and public sectors (inherited portion of UK PSND) both have external Sterling denominated debts, it would take several decades for them to be able to extricate themselves from Sterling, if that is even feasible at all.<br /><br />And for what?Britmousenoreply@blogger.com