Monday, August 25, 2014

Scotland ‘should not take on UK debt’
unless it can keep the pound

Sir James said Scotland could continue to use the pound as legal tender inside the country if necessary, whatever London decides Photo: PA
Scotland ‘should not take on UK debt’ unless it can keep the pound
Yes campaign’s economist plots way ahead if Westminster refuses to share sterling

By Ambrose Evans-Pritchard

9:24PM BST 24 Aug 2014

An independent Scotland should walk away from its share of the UK’s national debt if Westminster continues to refuse a sterling union, one of the Yes campaign’s leading economic gurus has advised.

“Britain inherits the debt,” said Sir James Mirrlees, a Nobel Prize-winning economist and a prestigious figure on Scotland’s Council of Economic Advisers.

[WHAT DEBT?  Its the debt of the City of London!  They have been foreclosed upon! -AK]

“It is hard to see how Scotland can take on the debt unless there is a full currency union,” he told The Telegraph. “This is implied by the hard-line taken by Westminster. It is Scotland’s bargaining position.”

Crawford Beveridge, chairman of Scotland’s Fiscal Commission Working Group, warned last week that any such move would be “morally difficult” [Hahaha! Morally difficult? Don't you like how bankers speak of morals when it comes to debt?  Hahaha!]  and likely deemed a “default” by credit ratings agencies.

Not even the Baltic states entirely repudiated Soviet-era debts in the early 1990s, even though the Soviet occupation of their countries was never recognised by the West. It would be hard for Scotland to invoke the “doctrine of odious debts” – where debts run up by despotic regimes can legitimately be reneged on – under international law.  [Note: the One People's Public Trust has already foreclosed on the creditors for operating systems of slavery. This would make them a despotic regime, since they are posing as the people's governments - via the Bank of England.  There is no debt owed, except by the creditors to humanity!  -AK] The Czech and Slovak republics divided the Czechoslovak debt on a pro-rata basis after their “velvet divorce”.

Sir James said Scotland could continue to use the pound as legal tender inside the country if necessary, whatever London decides. “No country has stopped its currency from being circulated in another state that I know of,” he said.

He suggested that Edinburgh could equally issue a Scottish pound that is pegged to sterling and backed by a currency board along the lines of Hong Kong’s model. But, in his opinion, neither option, if forced upon Scotland, would entail any obligation to take on UK debt.

Sir James said this clash can be avoided. He believes the common sense option for all involved is to agree on a co-operative union. The British themselves would enjoy a “non trivial” benefit from being able to use their own coin in Scotland. “The easiest transition would be to keep using sterling for five to 10 years,” he said.

All three parties in Westminster say they will oppose a currency union after independence, insisting that the eurozone crisis has revealed the perils of trying to share a currency with separate fiscal policies. Sir James played a central role in First Minister Alex Salmond’s Fiscal Commission earlier this year in drafting plans for a future currency. A former Cambridge professor, he is now professor-at-large at the Chinese University of Hong Kong.

He said the eurozone currency experiment has gone badly wrong – and has previously called for the weaker Club Med countries [I wonder if Club Med objects to be used as adjective of poor countries? I believe that name is a trade mark is it not? -AK] to withdraw – but insists that a UK-Scottish currency union would be a different animal. “The risks have been greatly exaggerated,” he said, speaking at the Nobel laureates’ gathering in Lindau, Germany.
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