Thread by @Craig_Berry_

@AndrewWilson claims in his article that Scotland "in time, will have its own currency when its Central Bank reports to its Parliament that the six tests we set out have been passed."
The six tests act to prevent the creation of a Scottish currency. thenational.scot/news/17430414.…

1) Countries which can print their own currency cannot go bankrupt in that currency. With control over monetary policy, Scotland would be able to mitigate the impact of debt interest payments on government finances. This is not possible in a Sterlingised Scotland.

If the Gov deficit is constrained & ability to print money blocked then the private deficit MUST increase. This fiscal target with Sterlingisation would result in a consumer credit bubble which the Scottish Government would be unable to bail out when the bubble inevitably burst.

2) What the SGC calls a central bank is more like a monetary institute. The fact that Scotland would not have a full central bank may have implications for other policies and decisions such as the one to join the European Union due to Maastricht treaty rules.

The fact of Brexit will be that an independent Scotland which sought to join the EU may be attempting to join a political union whilst unilaterally using a currency controlled by a country which has recently left the EU.

3) Sterlingisation is a risk to our economy in the form of the UKs financial regulations, which failed to protect the UK from the 2008 Financial Crisis. It prevents Scotland from shaping its regulatory policies to prevent a crash which affected the UK from harming Scotland too.

Scottish consumers & businesses will be affected by interest rates & other decisions taken by the UK which excludes their interests. If the UK raise rates to calm an overheating London economy whilst Scotland is in downturn, that decision may actively harm the Scottish economy.

4) Building up foreign currency reserves would be necessary for a new currency or Sterlingisation. If an independent currency required more reserves than needed for Sterlingisation then the act of Sterlingisation would be a barrier to creating an new currency.

The fiscal constraints of Sterlingisation would make it extremely difficult to build up reserves, which could only be done through either a suppressing effect on Scottish economic growth or by adding an upwards pressure on the level of private debt.

5) SGC says a Scottish currency would have to fit Scottish trade and investment patterns, with the rest of UK currently Scotland’s biggest trading partner. Sterlingisation would make it extremely difficult for an independent Scotland to do anything other than double-down.

The London markets would not look kindly upon any kind of independent Scottish trade or investment deal which did not benefit them or would act to harm them, which would also pressure an independent Scotland to act conservatively in pursuing new trading directions.

6) An opportunity of independence is breaking away from the UKs failed economic model. Sterlingisation would be bound to interest rate decisions of the BoE thus when the UK economy boomed and the BoE raised rates to suppress growth, this would suppress growth in Scotland too.

Policy-makers & investors would base decisions on the needs of the UK economy, dominating monetary policy. Sterlingisation would harmonise rather than diverge our economic cycles. Diverging the cycles and attempting to create a Scottish currency would become much more difficult.

A #NewScotland requires a #NewCurrency. The SGC and Sterlingisation acts as a barrier to that. Both should be rejected and an independent currency should be voted on at SNP conference.