British finance minister George Osborne wielded the cudgel of fiscal insecurity to warn Scots against voting for independence.
Scotland runs the risk of ceding control of much of its economy if it chooses sovereignty during a referendum next year and remains in a “currency zone” using the British pound – the preferred option of the pro-independence Scottish government.
Osborne also warned there was no guarantee that the rest of the United Kingdom would accept such an arrangement.
Speaking in Glasgow, Osborne said choosing such a path could result in Scotland ending up like Panama and Montenegro, which use the US dollar and the euro, respectively, but neither has control over policy, according to Agence France-Presse.
In case anyone in attendance was unclear where Osborne, Britain’s Chancellor of the Exchequer, stood regarding Scotland’s 300-year-old union with England, the British Conservative politician made it crystal clear.
“If it ain’t broke, don’t break it,” he said.
Osborne identified four economic options for an independent Scotland: currency union, unilaterally keeping the pound and pegging it to sterling, creating a Scottish currency or joining the euro, according to the wire service.
But all were a “very deep dive into uncharted waters,” he said.
A currency zone between two separate countries would be “extremely hard to sustain” without close political and economic union, Osborne said, pointing to the example of the euro, according to Agence France-Presse.
“An independent Scotland would have to agree its tax and spending plans with what would be a foreign government,” he said.
Osborne added that the rest of the United Kingdom would likely balk at giving an independent Scotland a say in the way that London runs the economy.
“Why would 58 million citizens give away some of their sovereignty to five million people in another state?” he said.
Unilaterally keeping the pound, the other main option, would leave Scotland with “no control over its own monetary policy” as all decisions on sterling would be taken by the Treasury in London, Osborne added.
A referendum is set for Sept. 18, 2014, when Scottish voters will be asked straight out: “Should Scotland be an independent country?”