Greg Palast: Scotland, Lose the EU and the Pound

Investigative reporter and economist Greg Palast sees “two overwhelming and undeniable advantages for Scotland to declare its sovereign independence: to end both Scotland’s damaging enchainment to the British pound and the debilitating tyranny of European Union membership.”

Of the currency issue, Palast writes at his site:

First, the pound. In all the hoo-hah over whether Scotland can keep the coin with the Queen’s schnozzola on it, no one seems to have asked, Why in the world would Scotland want this foreign coinage?

The Bank of England’s singular task at this moment is to figure out how to counteract the disastrous macroeconomic consequences of George Osborne’s austerity fixations and the bleating demands of City bankers. The only time when the Bank of England gives any consideration to Scotland’s economy is when a BOE governor checks the little gauge which tells them how much of Scotland’s oil they have left to spend.

Why should the interest rates, exchange rates and monetary supply of a resource nation like Scotland be subject to the needs and whimsies of the rusting realm to your south? According to the well-accepted theory of Optimum Currency Areas, Scotland would be best off adopting the Canadian dollar, also a damp, salmon-choked oil exporter or, better yet, the Vietnamese dong.

Scotland’s own coin, backed by taxes on its oil extractions, would be “stronger than sterling and more flexible alone.” In control of its own currency, Scotland could cut interest rates “when local manufacturing falters while the Bank of England is raising rates to fight a speculative bubble in The City.”

Read Palast on the second issue, the apparent “pathological need to remain subjugated by the European Union,” here.

— Posted by Alexander Reed Kelly

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