A new front is set to be opened in the propaganda war between the UK government and the Scottish National Party that will have resonances much farther afield. Acknowledging first minister Alex Salmond’s professed desire to maintain sterling as the currency of an independent Scotland, reports suggest London’s response will be one all too familiar to euro capitals like Dublin – you can’t have a currency union without some control of your budget passing to those responsible for managing the currency, in this case the Bank of England. Allowing an independent Scotland complete control over its own budget could undermine a joint currency if a Scottish government decided to run unsustainable deficits and allowed debt to rise. Sound familiar?
Ironically, as London prepares to lecture Edinburgh about the likely constraints on its future sovereignty in a currency union, a downgrading of sterling by ratings agency Moody’s, stripping the UK of one of its prized triple-A ratings, has reminded London itself somewhat bluntly about the limits of its own influence on sterling. A further irresistible slide in value is likely over the next months as markets exercise their ultimate sovereignty – with obvious pain looming for Irish exporters.
The subtext of the new message to Scotland is then a broader question about the nature of independence. Or sovereignty for that matter. As George Bernard Shaw put it: “Independence? That’s middle class blasphemy. We are all dependent on one another, every soul of us on earth.”
This is not necessarily, a priori, a bad thing. Man is a social animal who defines himself in his relationship with others. Interdependence is intrinsic to our being – between people, nations, polities of all kinds. What we strive against is not interdependence, but inequalities in our relationships, domination of one by another. Negotiating Scotland’s future, London is saying, is all in the end about where to draw the line on a long range of degrees of independence, from partial devolution through forms of Home Rule to a complete severing of the umbilical cord – but never to the point of that chimerical notion “full independence”.
Such “realism” inevitably takes some of the high-minded gloss, and hence mobilising potential, off the idea of independence.
Mr Salmond is left with three unpalatable options: sterling, membership of the euro – with, as we know, similar budget constraints – or a new Scottish currency, whose puny economic weight would leave it highly vulnerable to the vicissitudes of the market.
Seen from the other side of the Irish Sea, however, the case, promoted by a Eurosceptic-led government, provides an elegant and timely prop to the arguments of those who see the logic of, and necessity for, the EU’s own new collective economic governance structures.