Monday, January 23, 2012

Independent Scotland would be 'humiliated' like Zimbabwe over pound

An independent Scotland would be humiliated like Zimbabwe by adopting a currency over which it has no control, a former Scottish Secretary warned yesterday.

Sir Malcolm Rifkind said Alex Salmond’s plan to keep the pound following separation would mean England having ultimate control over monetary policy, such as interest rates.

He compared the situation to the basket-case African nation of Zimbabwe, where the economy uses the US dollar as one of its currencies after its indigenous dollar was suspended three years ago.

Sir Malcolm, who also served as Foreign and Defence Secretaries, questioned whether Scotland would be truly independent. The EU could also force Scotland to join the euro as the UK’s opt-out from the single currency may no longer apply.

His intervention came after Alistair Darling, the former Chancellor, called the SNP’s proposals “ludicrous” as they would mean the Bank of England setting interest rates and borrowing limits in what would then be a “foreign” country with no reference to the needs of the Scottish economy. Read More