SCOTTISH INDEPENDENCE AND THE ECONOMIC CONSEQUENCES

Author: Federica Cereda, Content Creator

Scotland's long battle for #independence began on September 14, 2014, with a #referendum in which independence from the European Union was denied. The campaign was led by #Alex Salmond, leader of the Scottish right-wing party, and represented a small revolution for Scotland, in which the "yes" reached only 30% of the votes. The most impressive thing was that voters between the ages of 16 and 17 years old expressed their consent to the referendum at 71% (in the United Kingdom the vote is allowed from 16 years old). The economic repercussions that would have emerged as a consequence of Scottish independence would have been enormous. Firstly, Scotland would have had to provide diplomatic facilities, as the United Kingdom would no longer grant its own. Secondly, the country would have had to go through very long and tedious #bureaucratic procedures to obtain admission to NATO and the UE. Last but not least, there would have been an enormous flight of #capital, since many Scottish banks and lenders, such as Royal Bank of Scotland, UBS, and Lloyds Banking Group, had already declared that, in the event of independence gain, they would have moved their offices to the United Kingdom. Last week, November 23, 2022, history repeats itself. Indeed, after the protests by Scotland following the #Brexit, the Scottish people have again asked for independence, which once again was denied in the absence of the consent of the #British parliament. There is currently no majority in the British Parliament in favor of granting the referendum. The Scottish independence party, the #Scottish National Party (SNP), is in opposition to the British government led by the Conservatives and is unlikely to find a majority in parliament supporting the cause of the referendum. First Minister of Scotland, #Nicola Sturgeon and British Prime Minister, Rishi Sunak are currently in disagreement over the fate of Scotland; the next elections will be decisive in this sense. The possible implications of Scottish independence which worries #Europe concern the possible #"contagion effect" that could arise, leading other countries, such as Spain, to follow the Scottish example, where some regions could threaten to ask for independence. Another concern relates to the maintenance of sterling as the national #currency. In this case, Scottish independence would be severely limited compared to the other European countries, which have a say in matters of monetary policy of the ECB. Regarding the financial side, the UK economy is the largest destination in Europe for foreign direct #investment. Without Scotland, the flow would decrease, and the rest of the current deficit could rise to levels that would discourage investors. Rating agency #Moody's, said that an independent Scotland could enjoy a better investment rating, but it would risk higher borrowing #costs. In fact, if the separation negotiations end badly, the #rating could deteriorate. Very timely is the quote of #Paul Krugman, winner of the Nobel prize for economics, stated on the first referendum: “Scotland, be afraid, very afraid. The risks of going alone are enormous. You may think that Scotland could become another Canada, but it is all too likely that it would end up as Spain without the sun”. (New York Times September 7, 2014)

Source:

https://www.ft.com/content/afefaab8-628f-4663-969c-ad30ad36fe65 https://www.ilsole24ore.com/art/scozia-corte-suprema-boccia-referendum-bis-sull-indipendenzaAEtxTWJ

https://www.limesonline.com/arrivederci-indipendenza-scozia-regno-unito-e-ue-dopo-la-vittoria-delno/6675