Scottish independence: Danny Alexander will continue to oppose currency union in case of yes vote
Danny Alexander will continue his opposition to a formal currency union if Scotland votes for independence in September's referendum.
Speaking in a BBC 2 debate on independence, Alexander said:
If you join a currency union, what you are doing is you are giving up the ability to set your own interest rates, you are giving up your ability to have a currency that moves in value according to your own economy and in a country that will be much more dependent on oil and gas, with a price that fluctuates day by day as we know, that would have big effect on our economy that we couldn't adjust.
The chief secretary to the Treasury drew an analogy with the Eurozone, arguing Scotland would not be economically free because its decisions on tax and spend would be limited by a formal currency union. He even went so far as to say continued use of the pound in an independent Scotland would be a "disaster".
However, this view has been challenged by a series of experts in recent weeks
Research director of the Adam Smith Institute, Sam Bowman, has argued: "An independent Scotland could flourish either by using the pound sterling without the permission of the UK (or by setting up a “ScotPound” pegged to sterling through a currency board, which would achieve a similar end). This ‘sterlingization’ would emulate a number of Latin American countries that use the US Dollar without an official agreement with the US government."
The SNP MP Angus Robertson took a predictably different view to Alexander, praising a formal currency union as "eminently sensible."
The head of the Better Together campaign Alistair Darling has called a currency union between an independent Scotland and the rest of the UK as "logical" and "desirable".