SCOTLAND could end up as "one of Europe's vulnerable, marginal economies" if it chooses independence, The Economist concludes today.

In its latest edition, entitled "It'll cost you," the respected magazine says independence would come at a high price for Scots.

It contends the Nationalist argument that Scotland, largely through North Sea oil and gas, subsidises the UK and the Unionist argument that brands Scotland a subsidy junkie are both wrong in the short term.

"Assuming it keeps the oil and gas extracted from under Scottish waters, an independent Scotland would currently gain roughly as much in taxes as it would lose in subsidies," the magazine explains.

However, in the longer term it says the future would be much dicier if Scotland chose independence.

An independent Scotland would be a "small vulnerable barque" on a stormy economic ocean. It would depend on oil for 18% of its wealth yet North Sea production has been falling 6% a year for the past decade and the oil will, eventually, run out.

The Economist suggests an independent Scotland would also be vulnerable to other shocks, pointing to the banking crisis and noting how, at its peak, the Royal Bank of Scotland had a balance sheet 13 times the size of the Scottish gross domestic product.

By dint of its size, an independent Scotland's borrowing costs would almost certainly be higher while its bond market would be "small and illiquid". The magazine, however, notes how an independent Scotland's biggest problem could be its currency. Sticking with sterling and entering a monetary union without fiscal union was a set-up that had proved disastrous in Europe, it claims.

The Economist concludes: "If Scots really want independence for political or cultural reasons, they should go for it. National pride is impossible to price. But if they vote for independence, they should do so in the knowledge that their country could end up as one of Europe's vulnerable, marginal economies."