Currency Union?

[Who Knows]

Using the £ outside a formal currency union Alistair Darling and the No campaign have termed the "Panama Plan". They have stated this would be a disaster and generally disparaged Panama.

 

However what in the "Real World" is the external independent view of Panama?

 

The Institutional Investor earlier this year published an article entitled "Panama Investment and Banking Boom" that describes Panama as a thriving regional business and banking hub.

 

http://www.institutionalinvestor.com/Article/3318322/Banking-and-Capital-Markets-Banking/Panamas-Investment-and-Banking-Boom.html?ArticleId=3318322&p=1#.U-icaie9KSP

 

The IMF (international monetary forum) and the World Economic Forum publish independent analysis of countries and produce reports that allow cross country analysis through league tables.

 

The World Economic Forum publish a report called the Global Competiveness Index that allows cross analysis between the banking and financial services sector between the UK and Panama. This independent analysis portrays a completely different position to the assertions made by the No campaign.

 

http://www3.weforum.org/docs/WEF_GlobalCompetitivenessReport_2013-14.pdf

 

The financial soundness of the banking industry is outlined in page 505 of the above report. Panama banking sector is internationally ranked as the 7th safest in the world sitting between Finland in 6th place and Norway in 8th place. In comparison the UK banking sector is ranked 98 places lower at 105 th place.

 

Access to bank loans for business with a good business plan is a common complaint in the UK media and this report analysis, page 503, confirms this with the UK ranked 82nd place. In contrast Panama access is easier and is ranked 8th place. Similarly with access to Venture Capital it is easier to access in Panama, ranked 12th, with the UK marginally behind in 20th place, page 504.

 

Although the financial services sector in the UK provides a wider range of financial products and services with a ranking of 6 th place, Panama is not far behind at 10th place over all, page 500.

 

However in terms of affordability and best value for money the financial services industry in Panama ranked at 7th place out performs the UK who slips to 18th place on page 501.

 

The report contains more than just banking and financial services and when all the analysis is combined in to an overall score the UK at 10th place does out perform Panama who are ranked back in 40th place.

 

Areas Panama perform badly in this report such as education and health services are areas where Scotland already has a well developed and established world class services.

[Wheelsup]

Hopefully Scotland will want to try and improve on a third world country. However Panama's  minimum wage if you can get it is about $400 per month and for a graduate the average it  is about $700 per month, or so it was a year or so ago. 

[Who Knows]

The minimum wage being set at a living wage is the aspiration for an independent Scotland.

 

No party is currently planning to devolve the power to Holyrood, to have the ability to set a distinctive rate for minimum wage in Scotland. In the UK the minimum wage has not been increased in line with inflation so has decreased in real terms since it was established.

 

The No campaign fear narrative on Panama is based upon selling the story Scotland cannot have a thriving banking or financial services industry with sterlisation because dollarisation in Panama has not allowed that country to have a thriving and bouyant banking and financial industry sector. The facts though prove they do.

[MuckleJoannie]

An article by George Kerevan in the Scotsman 

 

http://www.scotsman.com/news/george-kerevan-we-ll-pay-high-price-for-pound-1-3507635

 

 

SCOTLAND is in a no-win situation with its currency – better to have a seat on the Bank of England

[MuckleJoannie]

Bank of England Governor Mark Carney has said the institution has drawn up currency contingency plans, whatever the outcome of the Scottish referendum.

 

http://www.bbc.co.uk/news/uk-scotland-scotland-politics-28773893

 

 

 

Mr Carney's comments strike a different tone to the UK government, which has repeatedly said it was not putting contingency plans in place for the possibility of Scotland voting for independence.

[MuckleJoannie]

Scottish independence: Scotland should use pound, says Adam Smith Institute
 

http://www.bbc.co.uk/news/uk-scotland-scotland-politics-28869991

 

 

 

The free market think tank said that dollarised economies such as Panama show that banks can do better without a central lender of last resort.

[Who Knows]

Alistair Darling MP has confirmed, if you missed it on Monday, Scotland can continue to use the £ following a Yes vote leading to independence in March 2016.

 

If your still concerned and worried about currency like some people at the BBC Shetland debate you can find some background on the issue at the following site.

 

http://www.wealthynation.org/category/our-currency/

[Berserker]

That's a bit disingenious Who knows. What Alistair Darling actually said was that Scotland could use the pound, the rouble, the yen or the dollar. But typical of a 'Yes Man' to misquote, and mislead. It is quite telling that all of the plan B's are so bad that the Yes campaign preference is to retain financial control from London by claiming they will get a currency union agreement when they have been told quite clearly it will never happen. Who in their right mind is going to vote yes when all they are hearing is fantasy and downright lies?

[Ghostrider]

What a currency is called is irrelevant, currency is nothing but tokens, gambling chips, its what those chips are worth that matters.

 

To that end, all the gold in Scotland is in a ???? in the middle of ?????? in whose name?

 

Fact is, England would lose little disconnecting sterling from a independent Scotland as they'd just carry on as they are, the same can't be said for Scotland, they'd have to build from the bottom up, with all the instability that follows such things.

 

In the short term retaining a UK wide currency would be to an independent Scotland's benefit, but the BoE has Scotland by the short and curlies on that one - the BoE has little to gain, so it needs to be made attractive to them. In the longer term, *if* all this rhetoric about an independent Scotland being a bouyant, thriving and prosperous nation and England going down the tube faster than pulling the chain on constant repeat, should materialise, a linked currency is going to be a millstone around an independent Scotland's neck. I don't doubt that in Alec's little fantasy Scottish utopia the BoE allows him to dictate terms and come and go as he pleases, but meanwhile in the real world, they play ball differently.

Edited August 29, 2014 by Ghostrider

[tonydog]

Well all this talk of default on the UK debts even Wonga won't lend Scotland money after these comments it shows the immaturity of the current Scottish government , if it is a yes vote the S.N.P will be found out no one in Westminster to hide behind , and blame for all the wrongs in the world , if it's a no vote you can bet every small issue will be someone else's fault or lack of powers

[brian.smith]

People invest to make money based on a country's credit rating as far as I can see Scotland will start on a pretty good rating the debt is the UK's debt they have already accepted it is there debt as for pensions if you pay into the scheme for thirty years it doesnt matter where you live in the world you get your pension the Treasury is resposible for that they have accepted that why does nobody actualy look at the facts

and no I don't vote SNP and frankly i find them quite annoying as a government with there stupid laws

Edited August 29, 2014 by brian.smith

[brian.smith]

and no I dont vote SNP and I find there law making quite stupid

[Berserker]

How do you get a good credit rating when you have defaulted on your debt? Just look at Argentina and Panama to see what happens. As far as pensions go, you're right insofar as pension payments already made go. What happens 20 years from now when the rising ageing population are claiming their pensions from a long bankrupt Scottish Government?

 

Anyhow, more of Alex's fantasies and lies exposed today I see. As you said, why does nobody actually look at the facts? 

 

http://www.telegraph.co.uk/news/uknews/scottish-independence/11064526/Alex-Salmond-drops-pound-shared-asset-claim.html 

[brian.smith]

How do you get a good credit rating when you have defaulted on your debt? Just look at Argentina and Panama to see what happens. As far as pensions go, you're right insofar as pension payments already made go. What happens 20 years from now when the rising ageing population are claiming their pensions from a long bankrupt Scottish Government?

 

Anyhow, more of Alex's fantasies and lies exposed today I see. As you said, why does nobody actually look at the facts? 

 

http://www.telegraph.co.uk/news/uknews/scottish-independence/11064526/Alex-Salmond-drops-pound-shared-asset-claim.html 

Its not our debt its a treasury debt is it so hard to understand for a share of the assets we will accept a proportion of that debt Edited August 29, 2014 by brian.smith

[Who Knows]

Sorry but facts are facts he did say Scotland can use the £ so there is no misquoting.

 

The only two things that are disingenuous regarding the currency debate are:

 

1. Better Together and the UK Government official campaign literature saying vote Yes and you say goodbye to the pound!

 

What they should have said vote Yes and there will not be any guarantee you will get a currency union.

 

The £ is an international trade able commodity and the only way they could limit use of the £ would hit the city of London financial institutions hard and see a run on the £ resulting in significant exchange rate movement as it is devalued.

 

2. Better Together and the UK Government official campaign literature arguing the same as Tonydog that Scotland will be defaulting on its debt.

 

The facts as confirmed by the Bank of England is that legally 100% of the debt remains with the UK the link below confirms this as true position.

 

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/270643/uk_debt_and_the_Scotland_independence_referendum.pdf

 

Scotland does not inherit the debt but following a share of the assets is willing to take a share of the historic UK debt. However that is a side agreement between the rUK and Scotland because rUK will be solely paying those currently holding the debt.

 

http://news.scotland.gov.uk/imagelibrary/downloadmedia.ashx?MediaDetailsID=1767&SizeId=-1

 

So two key arguments in the no campaign are nothing but lies and distortion. So you Might wonder why people would vote no with such lies and deception.

 

However for a lot of people why they will choose to vote Yes or No will having nothing to do with economic or monetary policy and nothing to do with the literature either side produce. Everyone will have their own core values, priorities and believes which they will use these to make their own considered judgement.

 

Lastly Ghost rider is quite right in saying what a currency is called because it's just the modern way of bartering for goods in a standard tradable unit of measure.

Edited August 29, 2014 by Who Knows