BRUSSELS, Sept. 12 -- As Britain and the whole Europe are bracing themselves for the impact of an uncertain result of Scottish referendum on independence scheduled for Sept. 18, more analysts have joined the discussions on whether an independent Scotland could or should keep the British pound as its currency.
Scotland's pro-independence campaigners so far insisted that they intend to continue to use pound as the currency, a vision that has been frown upon by experts, including Nobel Prize laureate Paul Krugman.
In an opinion piece published earlier this week, the U.S. economist warned that an independent Scotland could face economic strife if it continue to use pound, saying a combination of political independence with a shared currency is "a recipe for disaster."
Krugman said Scotland may forge its own currency -- a measure which ensures its economic sovereignty would remain intact should a financial crisis occur.
However, trying to maintain a separate currency would be hard, he added, because the Scottish economy is more tightly integrated with the rest of Britain than Canada's is with the United States. Figures showed that exports from Scotland to the rest of Britain are estimated to have been 48 billion pounds (78 billion U.S. dollars) or 38 percent of estimated Scottish gross domestic product in 2012, excluding oil and gas.
Krugman's view is echoed by Paul De Grauwe, a Belgian economist and professor in European political economy at the London School of Economics and Political Science.
In a much-forwarded blog published Thursday, Grauwe warned that there will be no independence of Scotland with the pound, as "the maintenance of the pound will severely limit the independence of the new Scottish nation."
When the future Scottish government issues bonds in pound sterling, a currency over which it has no control, the implication is far-reaching, he said.
"It means that the Scottish government will not be able to give an ironclad guarantee to its bondholders that the cash will always be there to pay them out at maturity," Grauwe explained.
"As a result, when the Scottish economy experiences bad times and the Scottish government budget deteriorates... Distrust and even fear may be set in motion in financial markets leading to large-scale sales of Scottish government bonds precipitating a liquidity crisis," he said, comparing the scenario to the debt crisis that has swept Ireland, Portugal, Spain, and Greece, which he blamed for a fact that those eurozone countries have given up their monetary sovereignty and have no control over the single currency euro.
"Euro is off the table, forget about it, we're not eligible," said Alyn Smith, a member of the pro-independence Scottish National Party, at an event hosted by the Brussels-based think-tank Center for European Policy Studies on Monday.
Former European Union commissioner for monetary union Olli Rehn has ruled out the possibility for an independent Scotland to join the EU if it used pound without a formal currency or its own central bank.
Scotland if ending its 307-year union with the rest of the United Kingdom would have to reapply for membership of both the European Union and NATO, according to EU officials.
So far, the European Union has refused to give a clear position on the Scottish referendum, with a spokesperson saying on Monday that "it is for the Scottish people and for the British citizens to decide on the future of Scotland."
Cameron and Scottish First Minister Alex Salmond signed the Edinburgh Agreement in October 2012 to allow Scotland to hold an independence referendum in autumn 2014 on the question "Should Scotland be an independent country?"
The Kingdom of Scotland emerged as an independent sovereign state in the early Middle Ages and continued to exist until 1707, when it entered into a political union with the Kingdom of England.
In 1999, a devolved legislature, the Scottish Parliament, was reconvened with authority over many areas of home affairs, following a referendum in 1997.
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