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UK will cave in on sterling pact, claims SNP expert

THE UK Government's move to rule out a monetary union with an independent Scotland would be dropped after a Yes vote, according to Professor Joseph Stiglitz, the Nobel Prize-winning economist who helped draw up the SNP's currency plans.

The Columbia University academic, a member of Alex Salmond's Fiscal Commission expert panel, said it would be in the interests of an independent Scotland and the rest of the UK to make a "stable transition".

Interviewed at a conference in Germany, he said: "The position of England today is obviously bargaining, trying to change the politics of the electoral process.

"Once they get independence, if that happens, then I think there would be a very different position."

He added: "Countries can work with many different monetary arrangements. The concern here really is, can they achieve a stable transition?

"I think it's in the interests of the UK, of England and everybody to have that kind of stable transition. And I think that can be accomplished."

He spoke out a day after Crawford Beveridge, the chairman of the Fiscal Commission, acknowledged the UK parties' opposition to a currency union and said they might block the proposal "if politics trumps the economics".

Professor Stiglitz's comments were last night welcomed by the SNP. First Minister Alex Salmond has faced days of pressure to outline his preferred alternative to sharing the pound in a currency union.

He has resisted, claiming the UK Government is bluffing, but has raised the possibility of an independent Scotland continuing to use the pound without agreement - and without access to the Bank of England - in a process known as sterlingisation.

He has said Scotland would not pay its share of the UK's national debt if a currency union were vetoed.

The SNP's Treasury spokesman Stewart Hosie said: "There is perhaps no economist in the world that is more respected than Professor Stiglitz and so his comments today are a stark reminder to the No camp that the experts - just like the people of Scotland - can see through their bluff on the pound."

But opposition MSPs continued their calls for Mr Salmond to set out his currency "Plan B" ahead of a set-piece Holyrood debate today, the final day of parliamentary business before the referendum.

Scottish Liberal Democrat leader Willie Rennie said: "Alex Salmond must break his silence and give voters the clarity they deserve. The parliament deserves no less than this basic respect. This currency fiasco matters.

"With only four weeks to go people deserve to know basic facts like what currency they would expect to be paid in, save with and spend under Alex Salmond's independence plans."

Scottish Labour's finance spokesman Iain Gray said: "Alex Salmond must come before parliament as a matter of urgency and explain his Plan B for currency.

"This is his last chance to be truthful on what he will do as it has been made crystal clear by UK politicians from across the floor that he will not get a currency union in the event of a Yes vote."

Meanwhile Sir Brian Stewart, a former chairman of Standard Life and Scottish and Newcastle, said Scots would be "throwing our reputation away" if the country refused to shoulder its share of the UK's £1.4 trillion national debt in the event of a Yes vote.

Speaking at an economic briefing organised by the pro-UK Better Together campaign, he said: "Scots have a reputation in business for integrity and fair play.

"If we walk away from our debts I don't know how that leaves us. I can't imagine many Scots would be comfortable that we would walk away from our obligations."

In a lecture on Tuesday, Mr Beveridge said he found the prospect of abandoning the debt "morally difficult".

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