The Globalist – Little England: What’s Left If Scotland Leaves?

Scottish independence would not spell the immediate end of the British currency union. In this sense, the pound sterling looks safer than the euro now.

Throughout the euro crisis, the media has been full of speculation about whether Greece — and even Spain, Italy and other countries — might leave the eurozone. But so far, the only real step taken toward disunion in Europe involves two countries outside the eurozone. Holger Schmieding lays out the economic and political consequences of Scottish independence.

The crisis in the eurozone has exacerbated tensions between the monetary union’s northern and southern members, raising the specter that eurozone could splinter, with Greece possibly opting out.

But while the prospect of a shrinking of the eurozone appears more remote — with the ECB providing a safety net for solvent sovereigns, the worst of the euro crisis could well be behind us in 2013 — the United Kingdom took a small step closer to losing Scotland last week.

On October 15, British Prime Minister David Cameron and Scottish First Minister Alex Salmond announced that Scotland will hold a referendum on independence in October 2014.

That makes Scotland the only place in the European Union where a “divorce referendum” has been scheduled (although Catalonia may follow suit). But the Scottish Nationalists have recently vowed to keep the pound sterling as its currency after independence, at least for a while, just as the Catalans want to keep the euro.

Scottish independence would thus not spell the immediate end of the British currency union. In this sense, the pound sterling looks safer than the euro right now.

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