ESTABLISHING a currency union between an independent Scotland and the UK would be "extremely challenging," Chief Secretary to the Treasury Danny Alexander has warned.
The LibDem minister and Highlands MP said the SNP's key policy for independence was "not impossible" but warned it would be hard to enforce rules governing the two countries' economic policies.
His comments will be echoed today by Alistair Darling, the head of the pro-UK Better Together campaign, in a speech to the Scottish Labour conference in Inverness. The former chancellor will highlight problems in the eurozone, warning an independent Scotland would forfeit control over key economic policies under SNP plans.
The double attack comes after economist Jim Cuthbert called for the SNP to "reverse" its commitment to monetary union with the UK and consider creating a separate currency instead.
In a lecture at Stirling University, Mr Alexander said: "It is extremely challenging to combine monetary union with full fiscal independence."
Deputy First Minister Nicola Sturgeon said a currency union was in the interests of both Scotland and the UK. The Government will publish a paper, considering the implications of independence on currency and monetary policy on Tuesday.
Mr Alexander also said a go-it-alone Scotland would face a £4 billion finance hole, based on a projected fall in oil revenues for 2016.
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