An independent Scotland would need its own currency before joining the European Union (EU), a think tank has said after the SNP published its latest blueprint for breaking up Britain.
Angus Robertson, the SNP’s constitution secretary, published the seventh paper in the Scottish Government’s prospectus series on Friday, suggesting that Scotland could join the EU within two to five years of negotiations starting.
All fairly obvious really. But something that amuses. Spud insists this would be good because then they can do MMT. And he wavers between don;t worry about the FX rate and you can control it anyway.
But the EU will insist upon euro membership. And there will also have to be a period of linked FX rates before the switch. This means that Scottish £ monetary policy will have to be devoted to maintaining the FX price. Not to doing the MMT fantasies. Because you cannot fix all three at the same time – your own money supply, your own interest rate and your own FX rate. If the FX rate is fixed then the other two have to be set so as to support that – just like the gold standard.
Which will be fun. Watching a Scottish Chancellor trying to maintain a fixed FX rate against the euro while also enjoying Spud’s freedom with money printing.