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Scotland faces currency choice

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By Richard Giedroyc

You would think a referendum on independence would focus on politics, freedom of religion, language and customs, and the economy when a region considers voting to free itself from another nation.

That isn’t Scotland, a potential independent nation in the near future that appears to be more concerned with if the Scots will continue to use the coins and bank notes of the United Kingdom or a totally new currency issued exclusively for their own commerce.

The British aren’t thrilled with the idea of Scotland becoming a sovereign nation. The British may not have much choice. England was bankrupt when in 1707 it joined Scotland in what was meant to be the temporary United Kingdom. That temporary kingdom has been joined at the hip currency-wise ever since.

The latest flap is over what or who would appear on Scotland’s money if Scotland becomes a separate nation. There is also finger pointing going on regarding who may or may not have said what regarding if the United Kingdom would be willing to continue a currency union with an independent Scotland.

The Telegraph caused quite a stir when on April 1 the British newspaper published an article explaining plans to place Scotland First Minister Alex Salmond on what the article called the “Salmond Sterling” on money in place of Queen Elizabeth II following Scottish independence.

According to the article, “The designs were being honed at a facility funded by Sir Sean Connery.” (A portrait of James Bond is likely out since the fictional Ian Fleming British spy was in Her Majesty’s Secret Service rather than being a member of Scotland Yard.) The plan is allegedly to be introduced April 1, 2015, with Scottish coins placed into circulation within months of a “yes” vote for independence in the upcoming referendum.

There are questions being raised regarding if a government minister purposely said the United Kingdom would not allow a currency union following independence in an effort to discourage voters from voting yes.

According to the March 31 The Guardian newspaper, “The deputy prime minister [Nick Clegg] said he did not know whether the anonymous minister who spoke to the Guardian was a Liberal Democrat, but the comments should not be invoked by Scotland’s first minister, Alex Salmond, to give voters false hope. A currency union was not going to happen and was ‘not available to Alex Salmond,’ he [Clegg] told reporters at his monthly press conference.”

Clegg continued, “It’s really, really important we understand what is at stake in this referendum. When it comes to the currency, I want no one to be under any illusions whatsoever. The idea that Scotland can pull itself out of the UK but still enjoy the stability of being part of a wider currency union … is simply not available.”

The political climate didn’t improve when on April 6 the Herald Scotland newspaper published, “The Treasury was last night at the center of a growing row over political bias, after admitting it had no record of when its most senior civil servant first advised the Chancellor against a currency union with an independent Scotland. The inability of Permanent Secretary Sir Nicholas Macpherson to give a precise date is fueling claims that Westminster’s bombshell rejection of a currency union was cooked up to help the No campaign in the referendum.”

Coins of the United Kingdom circulate in Scotland. Bank notes issued by the privately owned Bank of Scotland, Clydesdale Bank, and Royal Bank of Scotland circulate side-by-side with Bank of England bank notes, but backing for the Scottish bank notes would become a problem if Scotland becomes independent both politically and financially.