Czechs in the post
We got an email from our Prague correspondent last night, but that’s not the only thing the disgraceful pun in the headline refers to. As Michael Moore was kicked around the playground by Nicola Sturgeon in the first Scotland Tonight debate that same evening, the soggy security blanket he clung to more than anything else was the currency issue, which the No camp appears to believe is now its most powerful weapon.
It’s a two-pronged Trident, if you’ll forgive the even more tortured wordplay in that metaphor. Firstly there’s the scaremongering part containing the (empty) threat that the rUK would refuse to enter a currency union with an independent Scotland, forcing it to join the embattled Euro, and as back-up there’s the claim that if we DID get a currency union, Scotland would somehow end up getting less consideration from the Bank of England governors when it came to monetary policy than the none it gets now.
Let’s take the briefest look we can manage at both of those assertions.
The extracts below come from a piece on the Radio Prague website in April. The first is the Czech prime minister, Petr Necas, speaking at a press conference after the visit of European Council president Herman Van Rompuy:
“It’s the conscious policy of my government not to set a firm date for euro adoption, because previous governments set target dates and they were never met. So it’s a question of the Czech Republic’s reputation and credibility. Second, in the current economic climate, a flexible rate of exchange for the Czech crown is an advantage, not a disadvantage, for a small, export-driven economy such as ours.
Entering the eurozone must be advantageous for the Czech economy. Only at that point will it be realistic to talk about adopting the euro.”
The article then notes:
“Mr Necas added that the situation in the eurozone had changed so dramatically since the Czechs joined the EU that he would be in favour of a referendum on euro adoption – a view he said was shared by President Zeman.
Herman Van Rompuy for his part stressed that the Czechs could only join when they felt the time was right – the ball, he said, was very much in their court.
In support, a direct quote from Mr Van Rompuy follows:
“The prime minister added in his statement that it is even an obligation to join the euro, so that is nothing new. But you have to meet all the criteria. At this stage the Czech Republic is not meeting all the criteria, so the problem is not a problem today. But even if you meet the criteria, then of course the Czech Republic has to make its own decision in its own constitutional order. So I will not interfere in this internal debate; it’s up to the Czech Republic to make up its mind.“
(Our emphasis.)
We’re not sure how much clearer it could be – even if EU member countries are technically committed to join the Euro, in practice they don’t have to do it until they want to, and now no less a figure than the European Council’s president has gone on the record saying so. So let’s hope – admittedly naively – that we never have to hear that particular tired old canard from the No camp again.
But if that leaves an independent Scotland with Sterling, what about the dreadful loss of our (non-existent) current influence on Bank of England monetary policy? This site has made the reality of that situation clear many times, but another alert reader found us a source that Unionists might be more prepared to listen to.
“With every British Minister the interests of England ought to be the shibboleth of his policy.”
Who said that? Technically it was the former Conservative Prime Minister Edward Heath, speaking in October 1969. But he was in fact citing another former PM – the redoubtable Lord Palmerston, who served as both a Tory and a Liberal – whose full quote (on “The Polish Question” in 1848) removes any possible chance that Heath was simply clumsily equating “England” with “Britain”:
England has more than 80% of the total population of the United Kingdom. The idea that the Bank of England – even in its current capacity as the bank of the entire UK – would ever make a policy decision benefitting Scotland at England’s expense, is so laughable as to be embarrassing. And if you don’t want to take our word for that, we refer you to Viscount Palmerston and the Rt. Hon. Mr Heath.
Even were it to have no official Scottish representation on its Monetary Policy Committee, however, in the event of Scottish independence the Bank would be obliged to give MORE consideration to the health of the Scottish economy – not out of charity, but for the protection of the entire Sterling zone by the prevention of the sort of horredously damaging economic gap which currently exists between Eurozone countries like Germany and Greece.
(The fact that Scotland, floating quite literally on a sea of tangible secure assets rather than the fantasy “wealth” of the London financial sector, would be more likely to be the Germany in that relationship is neither here nor there. The only actual danger of a Sterling zone for Scotland – easily countered – would be that the Bank of England might try to hold it back so as not to race too far ahead of the rUK economy.)
The No campaign counts, quite understandably, on the fact that the average Scottish (or British) voter doesn’t understand the arcane mysteries and complexities of fiscal and monetary policy. But in fact the core issue isn’t complex at all – if Scotland is independent, a currency union isn’t just desirable to the rUK, it’s vital.
There’s a very good reason why nobody in the UK government will actually come out and say a Sterling zone wouldn’t be allowed, despite being repeatedly pressed on the subject by interviewers. It’s because it IS an empty threat aimed only at sowing fear, uncertainty and doubt. The longer the referendum debate goes on, the harder it will be to sustain the illusion.
I’m absolutely sick to death of hearing journalists saying the Euro is an option for Scotland, as it shows a complete lack of understanding of the adoption process for the Euro, which shows up how incredibly ill-informed journalists are about EU issues. But this is surely pretty massive – never mind using de facto opt outs like Sweden and the Czech Republic, we now have a categorical admission that NOBODY CAN BE FORCED TO ADOPT THE EURO.
Incidentally, I’ve long thought that not nearly enough emphasis is placed on the fact the Czechs are using the same strategy as Sweden.
Shame there is no precedence whatsoever for this. No country has ever seceded from another country and had to work out what currency to use. Let alone a part of the United Kingdom of Great Britain and Ireland leaving the Union to become an independent Republic. Imagine if we could look for some kind of precedent there!
Wasnt a recent Better Together Poll rather embarrassing for such learnest championing when it showed “Currency” as being well down the list of voters priorities?
What’s to stop them coming out and saying it wouldn’t be allowed though? if said with conviction it will be believed by the many who can’t be bothered to look a bit deeper.
In the event of a no vote they won’t have to follow through , in he event of yes, they will not be in a position to do anything about it and will have been discredited anyway, they have nothing to loose (apart from integrity) by fibbing.
Hold on…there appears to be something wrong with Michael ( bar the obvious)….where is his wee badge? You know, the one all politicians seems to wear these days for any old reason?
A link to my post on the currency debate is appropriate I think: http://dcomerf.blogspot.co.uk/2013/04/sterling-big-one.html
Excellent analysis Stu and whilst Nicola ‘won’ last night’s debate the SG need to go on the ‘offensive’ on this.I suspect research would still say viewers were left with doubts about the currency question. Ponsonby endorsed that view
If they forcefully make the point that Sterling needs Scotland the No camp will be on the back foot as they would not be able to ‘avoid’ answering – as Moore did again last night. Some heavyweight economists endorsing this would also help? How about Blanchflower for starters
I think we should emphasise the major benificiary of Scotland retaining Sterling would be England and we are offeing them that option in good faith and to make sure we start out on the right foot
How can they loose what they dont have integrity is something that is devoid from their politics.
“What’s to stop them coming out and saying it wouldn’t be allowed though?”
The fact that it would utterly terrify the markets.
I’m just worried that, even if we do see some heavyweight economists emphasising that retaining Sterling would benefit England just as much, if not more, than Scotland, in the main people won’t believe it.
I think that we can just about persuade people that Scotland could ‘manage okay’ if independent, but the idea that Scotland could be economically more successful than England would just seem a leap too far for a lot of people, given the image that we have had forced upon us for decades of Scotland as being an economic basket case.
I think all this scaremongering,is beginning to wear the Scottish public down,it equates with the ideology that the Union has always imposed on Scotland, we are too wee, too stupid , too dependent on mother England for our well-being. All for their own purposes
Scots are starting to really accept this IS manipulative tosh, designed to keep our hopes and dreams at a low ebb, the Unionists desperately want to keep us where we are,under their control. As such, there is rising awareness with the Scottish public that it is in fact an unacceptable doctrine for Scotland to allow anymore.
When Quebec suffered under similar dogma,it was found that the public simply did not pay attention to it all anymore, they just got fed up with all the negativity. Scots are I feel, coming to that stage also.
While Quebec Nationalists lost by a whisker, they lost by a failure in their strategy, which was their failure to encourage sympathizers across other parties, who were not appealed to, as such enough votes were lost that most certainly would have got them over the line.
While here we have learned that lesson, as many groups are now part of the Independence movement, WE WILL CROSS THE LINE TO A YES VOTE!
O/T George Kervan has an interesting article in the Scotsman; balanced at first blush. I was particularly drawn to one observation on the linkage between the Scottish Independence Referendum and the prospect of a UK/rUK EU In/Out vote. Kerevan states:
“Salmond’s project of a new confederation of the British Isles still viable? The answer is yes, but only just. Everything hinges on Scotland being independent before England quits the EU.“
Thoughts, anyone?
On the debate last night, I thought Sturgeon was very good. I thought what was noticeable was the lack of bile, rancour and animosity from both Moore and Sturgeon. They were both smiling at each other quite a bit, and seem to genuinely respect each other. I think that this is impossible to achieve whenever the SNP and SLAB debate. It seems to be the complete opposite. Lamont and co seem to want to make the atmosphere as hate filled as possible.
The Guardian have an article in which Farage is calling on Salmond to condemn the demonstrators. He has called them “fascist scum.” Comments are allowed.
http://www.guardian.co.uk/politics/2013/may/17/nigel-farage-fascist-scum-protesters
Although Michael Moore is arguing against common sense, I don’t share the same contempt as I feel for Johann Lamont,or Alistair Darling for example. I honestly think he felt in a difficult position. A bit like a minister or priest who loses there faith but doesn’t know what else to do but carry on. Needs the finances to earn a living, doesn’t want to alienate friends and family and can only cringe there way through their working life knowing they are lieing to the congregation.
The sterling crash is imminent and the UK government will not be in the financial position to demand any terms from the EU regarding it’s membership contribution, let alone leave it.
Ultimately they will need to join the Euro and already their best mates in the USA are telling them likewise. About time they drop their long lost empire idealism and get onboard…or sink.
Meant to say,
well done Nicola, Moore did not nearly make a case for the Union, just fear tactics which is all they can offer. Noticed also he referred constantly to “we, as Liberals”, thus trying to keep the Tories in the distant background, to infer that somehow, all this stuff was more acceptable if he gave it, waving his Liberal flag.
Well maybe, he does not look at the polls very often!
“What’s to stop them coming out and saying it wouldn’t be allowed though?”
Ok, we’ll have our own currency then.
Cue mass panic at 1 Horse Guards Road.
I reckon Scotland should have it’s own currency, call it the quid and then make it worth 10 British pounds.
Can you imagine Shopping in England then?
How much is that iPad?
600 quid.
Really? what a bargain, here’s 60 british pounds.
We’d wipe out our national debt in no time!
The exact same situation applies in Poland.
Even if Poland wanted to join the EURO (which would require a change to their constitution and probably a referendum), they couldnt join before at the earliest 2017. That is 13 years after they joined the EU, and even that is highly unlikely.
And if they dont want to nobody is going to force them.
This is well known amongst (especially amongst people who are paid to know these things) – see link to article on this from the FT earlier this year (you need to answer a couple of dumb-ass questions to get past the paywall).
So when MM was spouting his nonsense last night he knew fine well it is nonsense.
http://www.ft.com/cms/s/0/d1ea63fc-9636-11e2-9ab2-00144feabdc0.html#axzz2TY9Itjgq
In regards to last nights debate, it would have been good to have asked MM what rUKs Plan B would be if Scotland decided it didnt want to stay in the Sterling zone?
With a near doubling of rUKs Balance of Payments problem as a direct consequence of a Scottish exit from Sterling they dont have an answer to that.
In general we need to go on the offense much more on these issues.
We have all the answers (and lots of difficult questions that ‘NO Scotland’ cant answer), but we are always on the back-foot on currency, on pensions, and prob next week on Financial services as well.
Its hurting us, and it shouldnt be.
The EU are actively promoting and implementing the shutting down or at least strictly regulating the city of london casino offshore financial services industry. The real reason why the Tory and their mates in the UKIP are shitting themselves about the UK membership in the EU. Absolutely nothing to do with the concern of the people of the uk. They ‘the bankers” know it’s coming and hence the anti-EU from the usual suspects. Just wish the people would start checking this shit out.
@ balgayboy,
The Bankers want to continue with ‘light touch’ (non existent regulation), but it has been proven time and time again that they are not trustworthy. Self regulation for any business field in this day and age is just not on.
The consequences of mismanagement are global as well as local. These people only interested in making money. Risk management is almost non existent, they have even less understanding of the implications than the man in the street.
John Lyons – you’ve got that the wrong way round – if a quid was worth £10, then something worth 600 quid would be worth £6,000!
@muttley
Yep saw those stories and gave the comments a wide body swerve today. Just one look at the general tone of the crackers on there was enough. 🙂
Is it just me, but at the start of the program when they were going around various people and topics, it seemed to be totally negative towards Scotland being able to be independent, was I imaging this ???
And congratulations to Nicola who did very well against Michael Moore and ex-specially the way she kept taking up the issue of “scare stories” at most of the stuff he and others have said about Scottish independence. It was a very good tactic which must have made the public think about it.
Vote NO – get nothing.
Vote YES – get a country.
Hail Alba.
The SNP might pursue the unlikely objective of a mutually beneficial currency union with Sterling, but a prudent Scottish Government which, in 2016 might not be SNP controlled, would have its own currency printed and a legislation ready drafted to establish its own central bank and banking regulations. If this leaked the UK would fall over itself to accommodate Scotland in a Sterling Area.
There must be many many folk who’s thoughts on currency never went beyond their concern for the exchange rate of the dollar/peseta/euro for their holidays. So it is good that this protracted debate will place before us all some education on the subject.
Likes as: Why is it just British Dependencies that offer offshore banking? Who benefits?
I think Michael Moore is being required to wear a hair shirt on behalf of the union. The debate last night was a pleasure to witness for its civility.
Contrast that with Lamont coldly using a woman and her family’s predicament over available health treatment. Here is a solution for Labour to assuage their concerns, dig into your coffers and fund her treatment. Not practical? You cannot fund every case that arose? And so neither is Lamont’s apparent view that every single health case must be fully funded and provided for by the Scottish government.
The allocation of scarce resources my dear Lamont. Something about health being an elastic demand and resources being non-elastic = finite.
@macdoc
Perceptive analysis of Michael Moore. Observing his physiognomy, I also infer that he is fundamentally a good man, whose better self is in mortal combat with the forces of falsehood and deception. His physiognomy speaks “What price a Man’s soul?” I wish that his answer will ultimately be “not for sale”! As Ms Sturgeon said, in “his heart of hearts” he knows that Scotland will do at least as well as an independent country.
Nicola “won” the exchanges last night. No doubt about it. The highlight for me was when she said to MM that she looked forward to him joining the Scottish negotiating team after the Yes vote. Pure Gold.
Michael Moore asked: “Do you accept that there would be another side to the negotiations, that as your own fiscal commission has highlighted, there would have to be a negotiated arrangement, and just how much influence do you think we’d be able to exert through the Bank of England or other regulators if we were 10% of the economy that it was caring about?”
Does he not realise that we already are 10% of the economy the BoE concerns itself with? He is effectively admitting that Scotland currently has no real influence on monetary policy. At least as an independent state, we would have a real finance ministry with attendant powers to stand up for our interests.
The Man from Del Monte
Perhaps he got himself confused as to which “we” he was referring to. We Scots, or we UK Govt.?
Simon at 1201pm – i’m afraid you are wrong. Ireland left the United Kingdom of Great Britain and Ireland in I think 1922 and continued to use Sterling for many decades afterwards.
Other countries on gaining their freedom from Britain also used Sterling – Australia was one!
@vellofello
The debate last night was a pleasure to witness for its civility.
That is what most struck me about the debate as well. It contrasts starkly with the behaviour of the leadership of the Scottish Labour Party in the last few years. They seem determined to make the referendum on independence as hostile and as bitter as they can manage. I am not convinced at all that they are aware of how badly they have come across to voters in the last number of years. They seem utterly obsessed with the SNP as well.
Just a thought, did or did they not mention during the debate the total GDP for Scotland was around 150 billion, I’m sure that figure was mentioned, does anyone else remember that ???
Yes Davy, £150billion was the figure given.
Just had a look at STVplayer to check the facts we were given last night, not by either politician, but by Bernard Ponsonby during his first report. Scotland’s GDP in 2010/11 was £22,816 her head against the UK’s £23,242 but when Scotland’s geographic share of oil and gas is included (and why wouldn’t it be) the Scottish GDP rises to £27,732.
What then are we arguing about? If every Scot contributes almost £5k more then those in rUK it’s a no-brainer. Where do I tick YES?
Thanks “Killieboab” for confirming that, now if we currently recieve around £30 -£33 billion as a grant for Scotland that leaves approx £120 billion, now we dont pay for welfare or defence or the EU. But if we did how much would that take out of the £120 billion and is their anything else we have to pay for ? when we become independent.
I am asking because £150 billion is a load of mulla for a country of our size.
What I liked about the debate was the moment when Nicola invited Michael Moore onto the post-indy negotiating team, and you could see for a second that that he really liked the idea….and then he remembered what he was supposed to be saying. (She also mentioned Lament, mind you….but I didn’t take that seriously. Imagine that stolid pudding trying to master the intricacies of hostile negotiating!)
Davy, that’s the total economy, not the government’s revenue. It’s things like you buying a pint in your local pub or someone paying you to fix their leaky tap (for example – I have no idea how you earn a crust), it’s not just income tax and defence spending. I hope that makes sense.
There was definite sexual chemistry between the two of them. Probably got a lot to do with Moore’s peculiar lip-thrusting behaviour, as if he’s kissing an imagined reflection. It’s not quite as winning as Clinton’s bottom-lip biting, but effectively draws attention away from his gigantic forehead. Nicola’s lips are, to be fair, of the thinner variety which don’t pout easily, and thus a symbiosis is established.
John Mackay looked much smaller than he does at 6 p.m. Was that to do with the camera angles, or was he much further away than need-be? Or is he just really small?
I saw Nicola Sturgeon a few months ago at the supermarket filling station. She was coming in to pay just as I was leaving. It was late evening, the weather was temperamental, a full moon somewhere behind the rolling clouds. She was wearing one of her wee suits, looking smart, cool. No minders. No fuss. She glanced up, caught my eye. I wanted to punch the air and shout ‘Nicola! Gaun yersel!’ but I was too slow, and even then, I’m too shy. Instead, I smiled at her (very quickly, as I was double-checking my change) and she returned the gesture.
It’s a moment which will stay with me.
Nicola doesn’t do airs and graces.
I remember at an SNP Spring Conference, I think it was 2008, and she was already deputy FM, and there was little or no security to be seen. There was a room leading off the foyer which was a sort of green room for the party apparatchiks, with a long sofa in it. Nicola was sitting on the sofa, with her head down reading a newspaper spread out on the floor between her feet. She had a skirt on, too (no she wasn’t revealing anything she shouldn’t have been revealing).
She looked so normal, so natural and so relaxed I wished I’d had a camera to take a candid camera shot. I somehow don’t see Maggie T ever having let herself look human like that.
Cause Thatcher wasn’t human