Alex Salmond said Scotland will be entitled to use the pound if independent
Westminster claims Scotland will have to seek
an alternative currency
Salmond has threatened to walk away from
Scot's share of the national debt
Alex
Salmond's Plan B would see every British taxpayer paying £5,900 extra
Scotland risks unprecedented austerity and the pound could ‘plunge into the abyss’ if the referendum results in a Yes vote, economic experts have warned.
Scotland risks unprecedented austerity and the pound could ‘plunge into the abyss’ if the referendum results in a Yes vote, economic experts have warned.
The National Institute of Economic and
Social Research expressed dismay at Alex Salmond’s ‘Plan B’ if an independent
Scotland is barred from using the pound.
The think-tank said the SNP leader’s
back-up plan – adopting the pound informally and reneging on Scotland’s share
of Britain’s borrowings – was ‘opportunistic’ and would saddle every taxpayer
in the rest of the UK with an extra £5,900 of debt.
It warned that defaulting on its debts would make Scotland an economic pariah, because it would be seen as too untrustworthy to borrow on the international money markets.
This would lead to an
‘unprecedented degree of austerity and the eventual collapse in the currency
regime’, it predicted.
Danny Alexander, the chief secretary to
the Treasury, said this scenario would see Scottish bonds – loans from international
investors – downgraded to ‘junk’ status. This happens when it makes no sense
for investors to lend money to a country because the risk of not getting it
back is too high.
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