- POSTED: 30 Jan 2014 02:31
An independent Scotland should be prepared to give up some national sovereignty if it wants to keep the pound, or risk the problems of the eurozone, the governor of the Bank of England said on Wednesday.
LONDON: An independent Scotland should be prepared to give up some national sovereignty if it wants to keep the pound, or risk the problems of the eurozone, the governor of the Bank of England said on Wednesday.
On his first visit north of the border since taking office last July, Mark Carney stressed that it was not his place to say whether Scotland should vote yes or no in September's independence referendum.
But he offered a "technocratic assessment" of the factors at play if an independent Scotland were to retain the same currency as the rest of the United Kingdom, as proposed by First Minister Alex Salmond's Scottish National Party (SNP).
In a speech to business leaders following talks with Salmond in Edinburgh, Carney said the problems in the eurozone had indicated the "clear risks" of having a currency union without the right foundations.
"The euro area is now beginning to rectify its institutional shortcomings, but further, very significant steps must be taken to expand the sharing of risks and pooling of fiscal resources," he said.
"In short, a durable, successful currency union requires some ceding of national sovereignty.
"It is likely that similar institutional arrangements would be necessary to support a monetary union between an independent Scotland and the rest of the UK."
The central bank chief stressed that such arrangements were the responsibility of politicians.
"Any arrangement to retain sterling in an independent Scotland would need to be negotiated between the Westminster and Scottish parliaments," Carney said.
"The Bank of England would implement whatever monetary arrangements were put in place."
Salmond's regional government, which proposes to retain the Bank of England as Scotland's central bank and lender of last resort, has stressed the high degree of trade and integration between Scotland and the rest of the UK as the reason why currency union would work.
However, British finance minister George Osborne said last year that currency union would be a "dive into uncharted waters" and warned there was no guarantee that the two sides would be able to agree on the issue.
The latest opinion poll, published on Sunday by ICM, found 37 percent of respondents supported independence, 44 percent opposed it and 19 percent were undecided - a five-point gain for the 'yes' campaign since September.
The referendum will take place on September 18.