The Christopher Lee of currency scares

There’s a Unionist myth from the first independence referendum which is still being aired and which will feature prominently in the second. It’s a myth that’s propagated by people who really ought to know better, and who in many cases actually do. They just keep repeating the story because they hope that people in Scotland don’t know any better. It’s a myth that keeps being repeated even though it’s been killed off more times than Christopher Lee in the Dracula movies, and just like Christopher Lee in the Dracula movies it keeps on coming back for the sequel. That myth is that an independent Scotland would be forced to join the Euro.

It says in the EU treaties that, unless a country has a specific opt-out from membership of the Eurozone, membership of the EU implies that state should eventually join the single currency. However the EU treaties impose no time scale on when a member state needs to join the Euro and impose no penalties for not doing so.  If a member state decides that it’s not in its interests to adopt the common currency, then no one in Brussels is going to insist that they do.

What this means is that no country can be forced into the euro. No, really. No more than a Rangers fan can be forced to wear a green and white scarf and sing along enthusiastically to a ditty about a fitba team that doesn’t realise it died.  Joining the euro is not like being conscripted into Angela Merkel’s army and then having to invade the Central Bank of Greece and blag all the deckchairs with a towel printed with the image of the EU flag. Joining the single currency is a process with several steps to it. Each one of those steps is at the discretion of the member state. That means the steps don’t have to be taken, and if the member state doesn’t take the steps, they don’t join the euro. It’s really that simple.

Step number one is starting off with a currency of your own. As Unionists are very fond of telling us, Scotland doesn’t have a currency of its own, and apparently is the only country in the world which is incapable of having any money at all. Not even those big stone coins that they used to use as currency on the Pacific island of Yap which would be a bit of a bugger in the check out queue at Morrison’s. So before we could even think about joining the euro, we’d first of all have to set up our own currency. Even if, as seems likely, an independent Scotland will set up its own currency, it will take a number of years for this to come into effect. When Ireland became independent in 1922, it continued to use the pound sterling until issuing its own currency, the punt, in 1928.

Step number two is reducing your budget deficit to within certain pre-determined parameters. Since the Unionists are very fond of telling us that Scotland has a bigger deficit than a shoe fetishist on a spending spree in Foot Asylum with nothing more in his pocket than a book of second class stamps, Scotland wouldn’t meet the requirements for joining the euro anyway. “You’ve got a deficit greater than Greece” and “you’ll be forced to join the euro” are mutually exclusive scare stories. But that doesn’t prevent the same people making them both simultaneously.

Of course, it’s highly debatable just how much Scotland’s real deficit is. The true figure will be determined in the negotiations after a Yes vote.  Whatever it is, it’s certainly not the figure bandied about by the Unionists and based on the GERS figures. The deficit in GERS is based on UK figures which show that almost one quarter of the entire Scottish budget is spent outside Scotland. This is spending attributed to Scotland by the UK. There is no independent nation on Earth which spends that proportion of its budget outside its own borders. In an independent Scotland, other than debt interest repayments which will be subject to negotiation in independence talks in order to determine how much if any of the UK national debt iScotland takes on, the budget will overwhelmingly be spent within Scotland and thus will increase Scottish revenues by generating increased economic activity within Scotland. However for the purposes of this discussion about the euro, what is relevant is that it’s for an individual member state to decide when and how to reduce its deficit. If a country which isn’t using the euro decides that its deficit is sustainable, the EU isn’t going to force it to reduce it.

The third step is joining the ERM-II, the European Exchange Rate Mechanism. The Czech Republic joined the EU in 2004, after the euro had been adopted as the common currency of the original 11 members of the Eurozone. The Czechs won’t be bounced into the euro, and have consistently refused to make moves to adopt it. In January 2010, Czech Prime Minister Petr Nečas stated that the country did not require a special opt-out in order to retain the koruna as its currency. Nečas said: “No one can force us into joining the euro … We have a de facto opt-out.”

Candidates for euro membership must sign up to ERM II for at least two years
before adopting the euro as currency, however it is entirely up to the discretion of each individual member state when to sign up to ERM II and member countries can legitimately delay this indefinitely.  That’s what the Czech PM meant by a de facto opt-out.  But Mr Nečas said all this in Czech, which is a language with way too many consonants, so it wasn’t reported in the Anglocentric Unionist media.

A whole lot has happened in the intervening seven years. Admittedly some things are just the same. Like the Unionist project fear and attempts to browbeat Scotland into staying a part of the UK. So we’re still going to get the UK chancellor coming to Scotland and making threats about currency. It’s just that the second time around with the arse having fallen out of the Brexit pound he’ll be coming to Scotland to warn us that after independence we’ll be forced to keep it. And the Unionists are still claiming that an independent Scotland would be forced to adopt the euro even though this myth has been debunked more often than the myth that Donald Trump’s hairstyle is a fashion statement and not a poor attempt to cover up a receding hairline.

In the past seven years Nečas was forced to resign in a corruption scandal. Brexit and Donald Trump happened. We’ve had one independence referendum in Scotland and are now faced with another. Yet here we are, seven years later, and the Czech Republic still has no plans to join the Eurozone, is no further forward in steps to joining it, and the EU has made no attempts to force the issue. That’s what Nečas meant by a de facto opt-out. It’s not a legal right in the sense that it’s explicitly spelled out in the treaties, but it’s an effective right. It’s a real right that an independent Scotland could use to refrain from joining the euro. It’s a right that several EU member states make use of.

This approach has also been adopted by the government of Sweden which has likewise declined to join the Eurozone but has no negotiated opt-out. Sweden says nej to the euro. Poland, Romania, Bulgaria and Croatia likewise are not eurozone members and none of them have formal opt outs. They will join the euro as and when they decide it is in their interests to do so, and they may very well decide to postpone that decision indefinitely. The EU isn’t going to force them to do otherwise. It wouldn’t force an independent Scotland either. But nothing I’ve said here will stop the Unionists from claiming that Scotland will be forced to adopt the euro. Like Christopher Lee, it will be back for the sequel. But next time, we’re ready with the garlic and wooden stake of facts and we’ll open the curtains and let the light flood in.

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48 comments on “The Christopher Lee of currency scares

  1. […] Source: The Christopher Lee of currency scares […]

  2. Waiting for Scotland says:

    Apart from “God Save the Queen” whataboutery, Unionists continue to fail to offer any rational explanation of the benefits Scotland derives from this Union of Unequals.

    Deflection, disparagement and denigration are the only arguments they have left.

    In light of their own obsession with “self determination” for the UK, their sophistry can only be described as hypocrisy of the highest order. They are contemptible.

    The sooner we are shot of their rule the better. Full speed ahead and damn the torpedoes.

  3. Agatha Cat says:

    Fun Fact for Unionists. UK has been in EU for 40 odd years. It hasn’t been forced to join Euro. Has it?

  4. […] Wee Ginger Dug The Christopher Lee of currency scares […]

  5. Therapymum says:

    Having read a good deal of nastiness in today’s press, you do make me laugh, WGD!

    “UK chancellor…… making threats about the currrency. It’s just that the second time around with the arse having fallen out of the Brexit pound he’ll be coming to Scotland to warn us that after independence we’ll be forced to keep it.”

    Chortled a lot at that. As I said earlier, I have been reading a lot of press reports today, which has not helped my blood pressure. One of the things I have noticed today is that it isn’t only Scotland that gets the ire of the MSM. Wales, NI and the Rebulic get it too. We are all incompetent say the press and according to the fora participants we are all leeching off England. I will forgive the same being applied to Trump. The man is seriously unhinged. And then I saw the video of Melania Trump reading Dr Seuss to a group of children. I bet she didn’t know that Dr Seuss made a significant amount of money as a political cartoonist satirising particularly the isolationism of the USA during the start of WW2. Ironic. The rest of the world gets short shrift, unless it’s to do with business.

    I also read today the Rowntree Foundation’s new report on the growth of poverty across the UK. Scotland seems to have managed to limit the growth more than almost any other area other than the South East of England. (That will be because we leech on England!!!) The graphics on the report really demonstrate the severity, showing that most areas have more than 50% of families struggling. I will send the graphics to some of my friends who think we are too wee and too poor to be independent, and are scared about their pensions, and will link your blog to try and persuade them that our currency has a future.

    I believe in social justice and equality, so why would I want to be part of a country that pontificates about Scotland’s inability to get on with the day job, when they are clearly not getting on with theirs, and unfortunately drags us with it? Just about every service is in crisis, and now it appears that our esteemed chancellor is about to remove £60 bn from the economy to cushion the Brexit effect. No help for ordinary citizens there – not for health, social care, working age disabled people, children or families facing fuel and food poverty. It made me feel ill.

    So your blog came as a welcome and refreshing end to the day. Thank you, and lang mae yer lump reek!

  6. john 58 says:

    Perhaps we could argue, at the right time, Scotland ” on being independent” we are not pursuing any assets nor liabilities, and then see the Westminster mob clambering over themselves to beg us to take our share, and even share a Lender of last Resort namely the Bank Of England . My reply would be ” Nah yer fine pal ,weve got it covered “.As mentioned on WGD before, a 15Billion start up deficit just does not ring true .

    My feelings are ,that I think the EU would be most welcoming to an independent Scotland, and not attempt to deliberately put obstacles in our way, plus it may be a way to Educate the r UK by the EU, to adopt a fairer, friendlier less domineering attitude to an ex member of the this most precious ex Union .

    ps I rant again sorry, John.

  7. Macart says:

    That’s a keeper Paul. 🙂

    Near as I can tell on the subject, the approach of both the meeja and the political class appears to consist of two parts naked deception and three parts clown footed, windae lickin’, swivel eyed denial set on play back and repeat.

    Pundit sofas and green rooms stuffed with over opinionated metrotwats who are long on bubble formed opinion, arrogance and condescension whilst being a tad short on fact, honesty or humility. A yapping pack of go to, oh so superior, sneery rentaquotes. The type who sit round studio tables (latte and biscotti optional), waxing lyrical and bum trumpeting vacuous pre prepared soundbites whilst wearing either their bias or their ignorance, (sometimes both), on their sleeves when discussing anything on Scottish politics or self determination.

    I think the polite diplomatic response in political circles is, ‘we’ll take your collective recommendations under advisement’.

    Which is better said I suppose than, ‘Awa an play wi yersels! Yer bum’s oot the windae’.

    Bottom line. If ordinary Jock and Jeannie Public can find these facts out with a few clicks of a mouse, then what’s their excuse? Laziness or deceitfulness? Tough call.

    • Aye, Sam, what goes ‘round, comes ‘round.
      As Paul points out in yet another excellent item, there are not many of Project Fear’s threats warnings and lies which were bandied about during the ’14 Referendum and enthusiastically endorsed by our Proud Scottish But Media that cannot be slapped down as arrant nonsense as the horrors of Hard Brexit unfold.
      It would be tempting to launch a Pro Independence ‘Projet Peur’, when Indyref 2 is launched (IMHO September 2018), to frighten previous No voters to vote Yes the next time. Lies and threats are not our style.
      I’d argue that there will be no need to threaten and cajole Scots citizens to change their minds and move from No to Yes. It is already happening as Phantom Power’s excellent series of videos and countless No to Yes messages on the internet attest.
      We’ve already discussed GM’s ditching of Vauxhaull and Opel. Peugot have bought up the UK plants, and already workers are on the telly worried about their jobs because of Brexit.
      Not much sign of May’s ‘special relationship’ with Trump’s US in the GM Board Room. Money has no nationality, and will be attracted to economic and trading blocs where it can thrive. France will close the plants and move production back into the EU zone come Brexit.
      We won’t need to ‘threaten’ mass job losses in the rUK. It will happen within the Brexit Indyref 2 timelines.
      Freedom of Movement ceases 15th March 2017.
      Already we have had horror stories of EU nationals being threatened with deportation despite working her for decades, marrying a UK citizen, bearing children who are also UK Citizens:. Swithering Nos can see all this madness very publicly happening.
      England has swathed itself in an isolationist Iron Curtain.
      The traditional first fortnight in August English Summer Holidays will also highlight the madness of leaving the EU.
      Travel visas, the £ parity with the euro at best, the £5 pint of lager.
      EU UK workers are being used as bargaining chips. Millions of Brits retired or working on the Continent are under threat.
      There is no need for Projet Peur, the Brexits are doing the job for us.
      However I strongly feel that we must invoke Indyref 2 while we are still EU citizens in our own right.
      Why would we sit back and wait until rUK completes its divorce settlement?

      rUK post Brexit will be a dreary place.
      Already firms and finance houses are making plans to leave rUK.
      Presenting the positive case for Independent Scotland within the EU should be a slam dunk.
      ‘Projet Positif’ may be more appropriate.

      • Macart says:

        No, we really don’t have to wait until Brexit is complete and indeed it would prove catastrophic for new Scots if the SG did.

        That and we really, REALLY owe Westminster no favours whatsoever. The SG and YES movement tried reasonable and they tried concilliatory in indyref 1. Our return for this has been arrogant disdain, punishment legislation, increased austerity and Brexit.

        So, no. I, for one, don’t feel like cutting Westminster government any slack over any prospective timing. They haven’t earned the Brownie points necessary.

  8. jdman says:

    What nobody ever seems to talk about is the 19 countries who do use the euro, they talk of the euro as if it were a terrible fate, I hear no screams of anguish from Ireland, were they bulled and threatened into using it? what is so wrong with the euro anyway?
    I think we SHOULD join the ERM when we have our own currency and work towards joining!

    • Macart says:

      As a long term, that’s maybe a thing. In the short, I just want to be watching if the FM gets round to telling assembled politicos and meeja types the pound sterling is a risk and we’ll be floating our own currency.

      The whoooooosh as the oxygen leaves whatever studio should be something to behold. 🙂

    • Global Nomad says:

      I quite agree with you jdman.

      I for one would be quite happy for iScotland to join the euro. Especially if it means I don’t have to work out the cost of a beer at 1am after being on the lash all day in some mediterranean hot spot hahaha

  9. gerry parker says:

    For each Scottish banknote issued an equivalent asset is lodged with the UK central bank (which strangely enough is called The Bank of England)

    So we already have our own currency but the assets that back it are not under our direct control.

    We need to move towards bringing those assets into a Scottish Central bank and peg the Scottish Pound to the Euro.

  10. diabloandco says:

    It’s that last sentence that worries me Paul .

    You have placed all the nonsense in front of us but we have a media which willingly lies to prevent the population of Scotland knowing the truth. If they can’t do it directly they do it by omission and of course there is the willing deaf who just don’t want to hear , so immersed are they in their union jackery.

    The white noise by the MSM drowns out truth or nuance which puts me in a state of permanent despair.

  11. National Yes Registry says:

    Just a small but important point Paul. On Independence, the entire UK debt burden will remain with the UK. None of that deficit or national debt can be transferred to an Indy Scotland. The UK Chancellor was forced to agree this fact by the markets during IndyRef1 (and was reported on by the FT at the time. It is also in Hansard).

    Scotland will leave the Union with zero national debt and will instead form a bilateral agreement (after negotiation) with rUK on what proportion of rUK’s debt repayments we will contribute toward. Scotland will have no national debt on Independence for the simple reason that Scotland has been unable to enter into any borrowing agreements for over 300 years. The Uk on the other hand has been maxing our credit card since the Napoleonic wars.

    Jason

  12. Cloggins says:

    Now would be the best time to publish a detailed – if tentative – plan for a Scottish currency. It would knock the wind out of this argument in the upcoming indyref . It should detail how the currency is pegged, better to the Euro or to a basket rather than the volatile English pound, what the name will be, what it will look like, and what effect the transition of coins is going to have on shopping trolleys. And it should also specify who will manage and supervise, advise and issue. Time BOS, RBS and Clydesdale had an informal meeting.

    • Aucheorn says:

      I agree, except for the last sentence. Too much bad history with the BoS and RBS to be involved, there was an opportunity a couple of years ago when the Clydesdale was up for sale.

      What we should have is a “new” National Bank with no retail or allowed to gamble
      on the financial market, funded through Scottish gilts. Able to act as a Central Bank and as an Investment bank for Scottish business.

      Oh, and let’s NOT call the currency the Scottish Pound!

    • cirsium says:

      We need a system of publicly-issued, publicly-structured money and credit so would need our own National Bank. Look at the track record of HBOS, RBS and Clydesdale. Here’s an example http://www.nakedcapitalism.com/2017/02/ian-fraser-what-the-hbos-fraud-tells-us-about-the-state-of-british-banking.html

    • Soutron says:

      Why, why, why do people keeping talking about pegging a new Scottish (pound, yoonit, dollar, whatever) to other currencies?!

      A scottish gov controlled central bank (like US federal reserve) as monopoly issuer is by far the best course of action. The private banks can get on with private banking.

  13. affa nae weel says:

    What we have to remember, is that the british ( english ) government has many centuries of ‘diplomacy’ behind it ! This means that they will use all/any means to get what it wants, from media control, blackmail, I would not discount assassination as a tool, they have ‘form’

    That is, to dominate it’s dominions ( Scotland/Ireland/Wales ) they will continue to extract taxes from us, then return a smaller percentage. They will lie, deceive, disseminate, divide us, and sap our will. It’s called Psi-ops,

    https://en.wikipedia.org/wiki/Psychological_warfare

    Already we have ‘respected’ liberal ? politicians coming up here, and suggesting that our wish to govern ourselves is racist. Meaning that we have to scramble to correct this nonsense, continuing to spout these outright lies, keeps us on a back foot, following rather than leading the debate, and don’t forget, mud sticks !

    What we saw in 2014, will be doubly divisive and nasty, come the next referendum, indeed, it is picking up momentum even before we have announced.

  14. Robert Graham says:

    aw Naw no again, No The having to join the Euro again ,When even kids up here could tell you (A) we cant (B) we like others as Paul explains we wont be forced at gunpoint to do so .
    its like a bloody broken record or one of these dolls where you pull the string and it goes yak yak yak , a bit like watching fluffy , its process , its process , no one wants a referendum , no one wants a referendum , and so he goes on , and on and on . One flew over the Cuckoo’s nest comes to mind a bleedn Asylum , and some f/kr has lost the keys .

  15. cirsium says:

    Thanks for this post Paul. Having been over on Wings this morning, I was intrigued on reading this from your post “The deficit in GERS is based on UK figures which show that almost one quarter of the entire Scottish budget is spent outside Scotland. This is spending attributed to Scotland by the UK. There is no independent nation on Earth which spends that proportion of its budget outside its own borders. ”

    I had just read the following http://www.lbc.co.uk/radio/presenters/iain-dale/empire-20-will-go-down-like-a-lead-balloon-india/ with this quote “Well speaking specifically about the British Empire in India, the British came to one of the richest countries in the world, and over 200 years of plunder and exploitation reduced it to one of the poorest.”

    Interesting to compare what the Empire did to India with what the UK government has done/is doing to Scotland.

  16. Shagpile says:

    Not quite O/T, but like the Euro which we will have to join (in an EU that won’t have us) is that we’ll have to sign-up to Schengen.

    It’s the other scare they wish to ‘monger’ us with, and like “having to join” the Euro, they lie; and they surely are lying, because the truth is not complicated at all.

    http://www.europarl.europa.eu/intcoop/euro/jpc/eea/jpc_meeting/resolutions/2003_05_20_en.pdf

    It’s also worth mentioning that the UK is signed-up to Schengen already, except the open border bit. We would not be forced to open our borders to other EU/EEA/EFTA countries, as this would effectively close our border with England and NI, i.e. being “fenced off”.

    Interestingly enough, it seems that the Schengen security protocols are one of the “cherry picked” bits of EU membership Westminster wishes to retain.

    • Shagpile says:

      7. Considers that all acceding countries should join the Schengen area as soon as possible; also considers, however, that this should result in the building of bridges with neighbors, not fencing them off;

  17. What’s wrong with joining the euro anyway, if we choose? If it’s good enough for Germany, France etc. then why not us? I don’t want anything much from the rotten UK anyway, including their pound.
    One of the benefits of the new indyref is that, it’s no longer simply a matter of the yoons dissing the SNP. They have to disrespect and rubbish Scots and their ability to run Scotland successfully.
    This is now, a much tougher gig. We will start with at least 50% of Scots at the end of their rope as far as being willing to listen to that message again. A lot of Scots, like myself, in early 2014, were simply not aware, probably through apathy, that the BBC are as biased and corrupt as Reporting North Korea.
    Once the Article 50 button is pressed, everything changes. The EU are going to mince the UK. And they are going to enjoy it. Brit TV doesn’t show much of the EU in Brussels and Strasbourg. However, they hate Nigel Farage with a vengeance. There are the obvious financial and political reasons for ensuring that the UK gets the worst possible deal. However, with Farage it’s personal.
    He has been responsible for most of the disruption in the Eu for 20 years. Making the most offensive personal put downs to the most powerful people in the EU. Juncker, Schulz, Pompuy, Verhofstadt. He’s insulted every Mep with the “you lot haven’t had a proper job in your life” attack.This is payback time. They are going to ensure that his brexit is not going to be a success, but the biggest disaster in UK history.

  18. Macart says:

    Have you seen this Paul?

    http://archive.is/Tq8lH

    Brace yourself. 😀

    • Robert Graham says:

      ha ha god it defies description Peter Hitchens comments along the same lines . I do believe these folk think their Empire is about to Magically reappear , and we all better do as they say or else Mayhem will get you when she gets home , oh christ get me out of here Please .

    • weegingerdug says:

      All I can say is “hahahahahhahaaha… and breathe … hahahahahaha”

  19. AnnieM says:

    A friend said something today which made a lot of sense to me. If people said no in 2014 because they didn’t want change and were afraid of jumping into the unknown, perhaps we should be saying that only independence will maintain the status quo. It’s the UK government that wants us to jump into the unknown along with them this time!

  20. Weechid. says:

    Had this Euro discussion with a lady on a bus. After I’d told her that we didn’t need to adopt the Euro I got “Are ye sure”. (Actually, that was her initial response to every fact I gave her)Then it was “Will Europe want us though?” I told her that they’d be begging us to join her reply was – “Aye, but that’ll just be to annoy the English” When I tried to correct this and the other miscellaneous misinformation in her head I was told “You’ve been reading to much SNP stuff”. Couldn’t bite my tongue and said “Aye, and you’ve been reading too much Daily Mail”.

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