A NEW Scottish currency is a "serious option" if voters opt for independence next year, a panel of leading economists has found.
The group - including past and present members of Alex Salm-ond's council of economic advis-ers and the Scottish Government's chief economist - said a new curr-ency would have to be the "default option" if a newly independent Scotland had currency talks with the rest of the UK.
They said the option would have to be pursued if an independent Scotland failed to secure the First Minister's favoured arrangement of sharing the pound in a formal monetary union with the UK.
The conclusion emerged from a top-level seminar in July organised by the Royal Society of Edinburgh and the British Academy. Their official report on the meeting is published today.
It comes as a separate report, commissioned by the pro- independence Options for Scotland think tank and the left-leaning Reid Foundation, concluded that a new currency would be viable and would avoid "ceding control over monetary policy" to London or Frankfurt.
Among the seven experts who gave presentations in the Royal Society of Edinburgh and British Academy seminar were Dr Gary Gillespie, the Scottish Govern-ment's chief economist, Professor Frances Ruane, a member of the Mr Salmond's council of economic advisers, and Professor John Kay, a former member of the same panel.
The official report of the meeting says: "It was suggested that having an independent currency is a serious option for an independent Scotland.
"On the subject of the negotiation of a monetary union with the UK, it was suggested that this would only be possible to conduct on the basis that the independent currency was the default option, which would be pursued if acceptable terms of the monetary union failed."
Mr Salmond has insisted that a satisfactory currency union would be negotiated because it would be in the interests of both Scotland's and the rest of the UK, despite claims such an arrange-ment - if it did prove acceptable to the UK - would severely restrict an independent Scottish Government's economic policies.
He has resisted calls to outline a "Plan B" in case talks failed.
Today's report dismisses other possible options - joining the euro or using the pound without agreement with Westminster - as "not credible". But it warns of a "likelihood" the UK Government would use its large shareholding in RBS to order it to headquarter itself in London, as part of any currency union deal.
In the Options for Scotland/Reid Foundation report, economists Jim and Margaret Cuthbert back the idea of creating a new currency.
They wrote: "The basic choice for an independent Scotland as regards monetary policy would be whether it wanted to control its own monetary policy, in which case it would need to have its own currency, or whether to opt for some arrangement like membership of a currency union, or operating a currency peg, both of which would involve ceding control over monetary policy."
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article