Salmond "We can take Scotland in two weeks"

[Old Greg]

Triple AAA here we come.



Independent Scotland could be AAA rated – Standard & Poors : Business for Scotland.

Overall, I am sure that is true. But do you think it would be true if iScotland was refused a currency union and then refused to take on its share of the debt?

[eek]

You should tell that to EU countries. Cause for the majority it works rather well.

Look in detail at the economies of Italy (no growth since 2002 on average), Spain (record youth unemployment), Ireland (unsustainable house prices followed by a crash), Greece (need I say anything) and think about that again...

[Batcher]

Full text of the letter from Ross McEwan to RBS staff this morning:

Dear colleagues,

We have today made a statement to the market (see below), providing information on our contingency planning in the event of a Yes vote in next week's referendum on Scottish independence. As you will have seen over the last twenty four hours, other Scottish headquartered financial institutions have made public statements about their intentions. This served to fuel media speculation about our own plans, and in those circumstances, it became necessary for us to update the market on aspects of our contingency planning.

It is my view as Chief Executive that any decision to move our registered headquarters should have no impact on everyday banking services used by our customers in Scotland, and the rest of the British Isles. This is a technical procedure regarding the location of our registered head office. It is not an intention to move operations or jobs.

Our current business in Scotland, including the personal and business bank, IT and operations, human resources and many other functions, are here because of the skills and knowledge of our people, and the sound business environment. So far, I see no reason why this would change should we implement our contingency plans.

It is always my aim to ensure we inform our staff about such issues at the earliest opportunity. I know many of you will have already heard about this first in the media. My apologies for that, on this occasion this was unavoidable.

Over the next week, and beyond, we will continue to update you whenever appropriate.

Ross McEwan
Chief Executive.

[Unix]

Sterling is a means of exchange. 10 pounds sterling is money and can represent an asset or a debt.

Do you understand the difference between sterling as a currency and 10 pounds sterling?

Do you think currency union means currency? We are free to use sterling after a yes vote, it's the BOE reserves (which are amounts of money) that stand behind the pound that makes up the currency union. No currency union means we can't access all that money, which are assets.

[minestrone]

hahahahah. great stuff. you think the last 15 years havent been damaging to the scottish economy? So people seem to be missing this..its been tulip for scotland for years, why should they want it to continue at that level of tulip. Should they not want for better?

I know 2 people who work as account managers in Scottish enterprise who have admitted to me that firms are refusing to invest until this is sorted out.

Our unemployment used to be the lowest of the nations, it has become the highest over the last few months which is no surprise and indicative of the damage this process is doing. We are missing out on the recovery.

[Old Greg]

Alex in Wonderland | David Knowles

"One can't believe impossible things."

So said Alice to the Red Queen in Lewis Carroll's Alice in Wonderland.

"I daresay you haven't had much practice," said the Queen. "When I was your age, I always did it for half-an-hour a day. Why, sometimes I've believed as many as six impossible things before breakfast."

Unlike Alice, First Minister Alex Salmond has certainly been practising. In fact he has been practising so hard that last week he managed to believe one impossible thing which is so mind-numbingly stupid it could easily count for six separate impossible things rolled into one.

Last week, Salmond said that if an independent Scotland was denied a currency union it would refuse to pay its share of the UK debt. He said:

"If you deny us the financial assets then the UK will get stuck with all the liabilities."

In this he was echoed by John Swinney the Finance Secretary who, in another BBC debate, stated that:

"... if the UK is going to seize the assets then it is welcome to all the liabilities and we won't be having any of them if that is how the UK behaves."

Never mind the confusion between assets and institutions, this assertion, that; if denied a currency union an independent Scotland would refuse to pay its share of the UK debt, is surely one of the great tragic-comic moments of the campaign.

I say 'tragi-comic' because, unlike Mr Salmond, we are not in Wonderland but a real country with business, savings and pensions.

Any new country in the world has to prove to potential investors and the international financial markets that it is a safe and reliable place to do business with and in. Unsurprisingly, defaulting on your first debt payment would not exactly inspire the markets with easy confidence. It would lead to the Scottish government having to pay a lot more to borrow money which would impact heavily on its public spending. Personal credit would also be more expensive for ordinary Scots as banks (without a lender of last resort) would keep more money in reserve. Summing up the impact this policy would have on Scotland Danny Alexander said

"Mortgage rates would go up, credit cards and bills would go up and the Scottish Government would have to resort to the bond markets equivalent of Wonga to raise money to pay for public services in Scotland.'

Gordon Brown warned that Scotland would become an 'international outcast' if it refused to pay a share of the debts. Even the chair of the First Minister's Fiscal Commission Working Group Crawford Beveridge said that such a move "looks like a default and it smells like a default."

In the light of this withering critique the claim by the Scottish Government that, since the UK has already said it was legally liable for all UK debt Scotland would start life 'debt free' (Shona Robison) looks reckless, misleading and uninformed.

The best response to the SNP's piece of economic lunacy was from Charles Kennedy, who said that if the policy was enacted

'on day one of an independent Scotland, never mind London and the terrible people down there, the international markets would have you for breakfast lunch and dinner."

Clearly this policy is a terrible idea. But let us pause just for a moment to consider the implications of the SNP sticking to their guns on this point.

There are two logical possibilities on offer.

1) Alex Salmond and the rest of the SNP actually believe what they are saying. If correct, this is terrifying. Deep in Wonderland imagination really is the only weapon against reality.

What about the second possibility?

2) Alex Salmond and the rest of the SNP do not actually believe what they are saying but know that they need thousands more votes to win the referendum. If this is the case it would follow that they are willing to say absolutely anything to gain more votes no matter how ridiculous or damaging.

Two conclusions are available to us. Either the leaders of the SNP are idiots with about as much economic understanding as your average rock, or they are ruthless electioneers who believe that the ends justify the means. Neither conclusion shows them in a terribly good light. Either way, this insane position is still SNP policy.

The independence referendum is nearing its conclusion and all the major issues have been debated. For every single one many of the assertions and arguments put forward by the Yes Campaign have been shown to be false. It is clear that there would be no currency union with the rUK for example and EU entry would be difficult, long-winded and almost certainly result in a worse deal for Scotland than at the moment.

One would expect then for the polls to be widening rather than closing, especially considering that First Minister and his Finance Secretary have abandoned reality altogether and have flung themselves down the rabbit hole.

It would be so nice if something made sense for a change.

[scooterscot]

Overall, I am sure that is true. But do you think it would be true if iScotland was refused a currency union

They'll not be refused. To suggest otherwise is conjecture.

[scooterscot]

Look in detail at the economies of Italy (no growth since 2002 on average), Spain (record youth unemployment), Ireland (unsustainable house prices followed by a crash), Greece (need I say anything) and think about that again...

There's 27 countries in the EU. You've picked three of the worst and actually Italy is doing no bad. Not to mention the standard of living on offer versus income.

Steady slow growth is much more preferable that cycling boom and bust is it not? I'm not certain Germany has even felt a downturn.

[Underscore Pt2]

Yep, you can't take assets and not take the debts. If we can't use the pound we aren't responsible for its debt. Do you think in a divorce the wife could claim the house and refuse the husband entry AND also expect them to pay the mortgage?

thats a bad example...as the answer is YES!

[Old Greg]

Sterling is a means of exchange. 10 pounds sterling is money and can represent an asset or a debt.

Do you understand the difference between sterling as a currency and 10 pounds sterling?

Do you think currency union means currency? We are free to use sterling after a yes vote, it's the BOE reserves (which are amounts of money) that stand behind the pound that makes up the currency union. No currency union means we can't access all that money, which are assets.

I'm guessing you're too embarrassed to answer my question.

I know what a currency union is. In the absence of a Currency Union (and remember, sterling is not an asset), assets and debts will be shared, and the shared assets include BoE reserves. So Scotland can then use its share of those reserves as capital reserves to support pegging the Pound Scots to sterling if it chooses, or as reserves if it wishes to follow the Panama model (and accept the very significant risk that Scotland would then be denied EU membership, so this really looks like a non-runner).

iScotland may of course you the pretext of denial of CU to refuse to take its share of the debt, but will in all probability be treated as a defaulter. And in all probability it would be denied entry into the EU.