Scottish Independence: Economist slams fear tactics

Joseph Stiglitz says there has been a great deal of scaremongering around the currency issue.  Picture: Kenny Smith
Joseph Stiglitz says there has been a great deal of scaremongering around the currency issue. Picture: Kenny Smith
Have your say

A leading economist has hit out at the fear tactics used by the campaign against independence, as he insisted the row over what currency a separate Scotland would use is “a lot of to do about nothing”.

Professor Joseph Stiglitz, a Nobel Prize winner who was chairman of US president Bill Clinton’s council of economic advisers, said a currency union between an independent Scotland and the rest of the UK could work, as he dismissed the refusal of the main Westminster parties to agree to such a deal as “bluffs”.

But he also stressed that there were a range of of options for the currency of an independent Scotland, pointing out that Panama has used the dollar for more than a century, while countries such as Canada and some European nations have adopted their own currency successfully.

The expert, who is a member of the Scottish Government’s council of economic advisers and its Fiscal Commission Working Group which has studied the economics of independence, spoke out as First Minister Alex Salmond and former chancellor Alistair Darling, the leader of the pro-UK Better Together campaign, prepare for tonight’s live television debate.

In just over three weeks time voters in Scotland will go to the polls to decide if the country should remain in the UK or not.

Prof Stiglitz, from America, said: “One of the things as an outsider I’ve looked at the debate, particularly from the No side, I’ve been a little bit shocked how much of it is based on fear, trying to get anxiety levels up and how little of it has been based on vision.

“There is a vision on the Yes side that I see - what would an independent Scotland be like, what could it do that it can’t do now.”

Regarding the rejection of a currency union by the Conservatives, Labour and the Liberal Democrats, he said: “For the most part these are bluffs.”

The economics expert told the Edinburgh International Book festival that if there was a Yes vote on September 18, there would have to be talks between Scotland and the rest of the UK.

“People are going to be looking at what is in the best interests of the each of the two parties and there will be a negotiation,” he said

“I think inevitably they are bluffing.”

He argued currency union could work, saying: “If you look at the statistics for the similarities of Scotland and England they are sufficiently similar that a currency area could work, that’s what the Fiscal Commission recommended.”

But he also pointed out: “Panama and Ecuador have adopted the dollar - it’s worked for Panama for over 100 years. So the argument that England could decide I think is a little bit short-sighted.”

He went on to state that countries such as Canada and some of the Northern European states used their own currency, saying: “There are many currency arrangements that can work, I think this is a lot of to do about nothing.”

Prof Stiglitz added: “There are lots of different currency arrangements, I’ve outlined three different arrangements, all three of those could work.

“What really matters of course is the quality of the institutions.

“The main issues here are not currency, they’re probably not even North Sea oil. I think the main issue again as an outsider, and not wanting to intervene in any other country’s politics, the question is the vision of society, what do you want to do.”