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Thursday, March 23, 2023

Norwegian krone a potential currency in an independent Scotland

By: V4 Agency

No sooner had a Brexit deal been reached than Scotland began mulling the idea of independence and took steps to organise a new referendum. Independence, however, could create a key problem and result in Scotland losing the pound sterling, an issue that continues to divide Scots and may undermine their independence aspirations, a recent survey shows.

Scotland has seen a number of wild ideas regarding the creation of a possible post-independence financial system. The key issue is still the economy and what would happen to the pound, the common currency. Several alternative solutions are being outlined, but preliminary surveys suggest that none of the options may be overwhelmingly successful.

Citing the Scots’ intention to remain in the EU, the ruling Scottish National Party (SNP) has already made a request to the British government, asking it to allow a referendum to be held until 31 March before the Scottish vote. It was also stated that if the referendum does not get the green light and parliament ends up with a pro-independence majority after the elections, Scotland would start itw own preparations to hold a plebiscite, exercising its sovereign right.

Most opinion polls show that those in favour of separation already constituted a majority in 2020 but, due to uncertainties around Brexit, Boris Johnson has repeatedly stated that he will not permit another referendum.

However, voices seeking withdrawal from the UK have reintensified after the success of Brexit, claiming, among other things, that the Scots have never voted for the UK to leave the European Union and expressed their intention to rejoin the EU as an independent country.

Despite these aspirations to return to the EU’s fold, the position on financial issues is less clear, any many are inclined to approve the conservative approach. According to a survey by Progress Scotland in October, only 10 per cent of those asked would support the introduction of the euro. 19 per cent said they would like to keep the pound in the short term and then introduce Scotland’s own currency. Fully, 54 per cent believe that the pound sterling should remain in the long run. This, however, puts the whole idea of secession from the UK into question, because Scotland repeatedly find itself on the common market.

Scotland could adpot the Norwegian krone as its currency, Piotr Jaworski, professor of economics at Edinburgh Napier University, told the Express newspaper, arguing that both countries have oil-based economies and practice similar economic and political policies.

Although leaving the UK would bring political victory to the SNP, independence would present sizable economic challenges, because a new financial system would take time and capital to build. One must keep in mind that 30 per cent of Scotland’s GDP comes from trading within the British common market.


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