Calton said it first

Calton has been saying for quite some time now that, if an independent Scotland is to truly have control over its economic policy, it needs to have its own currency. Now, leading economist Professor John Kay has said much the same thing. He thinks that it would be right to try and retain the pound but the cost might be restrictions on our fiscal freedom. John Swinney has welcomed the Professor's contribution to the debate which leads Calton to wonder if he actually listened to/read it. So, for the benefit of Signalman Swinney, here it is in plain language - we won't be the ones pulling the fiscal levers if we keep the pound. It would therefore seem wise to have an alternative option if Sterling proves too tricky. It's called the Groat. (Anyone who expected Calton to say the Euro has (a) not been reading this blog and (b) deserves their eyes pecked out.)

Out of the Eurozone

Anyone who still thinks that joining the Eurozone is not a one-way ticket to loss of sovereignty must have their head stuck so far in the sand it's popping up in New Zealand. EU Council President Herman Van Rompuy, the man responsible for providing the EU's political direction, has made it clear that the single currency is irreversible. So much for Greece being able to bail out. And so much for German posturing about not being responsible for southern Europe's debts. When push comes to shove, as it did last night, preservation of the Euro comes out top and the Eurozone is one step further along the road to political, as well as financial, integration. Which is exactly where Van Rompuy, a fan of global governance, wants it. Calton can feel a Farage-style rant coming on when he considers that this Belgian unknown, who has just been chosen for another 30 month term not by the people of Europe but only by the 27 heads of the EU member states, can wield so much power behind the scenes. If Salmond doesn't want to become a puppet, he will follow the Great Broon's lead and keep well out of the Eurozone.

Man the lifeboats!

If you're wondering why Calton has not been posting much for a couple of days, it's because he was doing this week's Scottish Roundup of blogs. Head on over to Scottish Roundup and have a read - there are a lot of good blogs out there. Unfortunately one of Calton's favourites has hung up his keyboard - the Wee Red Squirrel is sadly missed.

Looking further afield, the Greeks seem to be heading for another election, which will effectively be a vote on their continued membership of the Eurozone. The EU is steaming into uncharted waters now and the iceberg of Greek and French public opinion is threatening to sink the Euro. Calton would not be sorry to see it go, were it not likely to pull the UK down with it. Man the lifeboats!

Limited room for manoeuvre

So, Alex Salmond has finally admitted that if an independent Scotland wants to use Sterling, it will have to have a fiscal stability pact with, er, the rest of the UK. That will be the countries which Scotland has just thumbed its nose at and divorced itself from. Does he really think that we are going to get good terms in those circumstances? Especially when you consider that the remainder of the UK will still be 10 times larger than us. We will very much be the junior partner and the only thing worse, as far as Calton can see, is joining the Euro. He notices that the First Minister also managed to neatly sidestep Andrew Neil's pertinent question on whether such a stability pact would limit Scotland's room for manoeuvre. That's because the answer is of course it would! Nice try Andrew but two damaging admissions from the SNP Leader in one interview is probably a bit too much to hope for.

Willie Rennie gets it

When, oh when, are the SNP going to realise that they will not have the full range of fiscal powers that they want if Scotland does not have its own currency? John Swinney is talking through his hat. If he wants 'real independence' he needs to go the whole hog and cut loose from both Westminster and Brussels. We can't have an independent monetary or fiscal policy while tied to sterling or the euro. It just doesn't work. Sharing a currency with another country means agreeing on spending limits, interest rates, acceptable inflation and so on and so on (if we are lucky). If we are unlucky it means having our fiscal policy dictated to us by Germany. If Willie Rennie can grasp that then surely the Finance Secretary can grasp it. No?

Hungary's downfall

In all the debate about whether an independent Scotland would be part of the EU, it is worth looking at what is currently happening to EU (but non-Eurozone) member Hungary. Its credit rating was downgraded to junk status at the end of last year over fears of mounting debt and sluggish growth. Its currency is now at an all-time low against the Euro. Now the European Commission has started legal proceedings against Hungary over what it perceives as undemocratic decisions taken by Hungary's government which, among other things, threaten the political neutrality of Hungary's central bank.

The problem, as Calton sees it, is that an unelected commission is trying to force a democratically elected government (with a 2/3rds majority) to change its legislation, with the threat of economic sanctions if it does not do so. Now, in this instance, Calton happens to agree with the European Commission's concerns, however the principle remains - should an undemocratic institution interfere in the affairs of a sovereign nation? Is this really what Alex Salmond wants for Scotland?

Alex where's your bottle?

Calton is not normally a fan of the Red Squirrel of the North however Danny Alexander is quite right in highlighting the dangers of Scotland becoming independent and yet continuing to use Sterling. If the SNP are sincere in their desire to have the fiscal levers needed to strengthen recovery, boost growth and create jobs then they need to have fiscal autonomy, ie their own currency and their own central bank. Becoming independent yet tied to Sterling would leave us in a worse position than we are at present. Ditto becoming independent and adopting the Euro. Calton is not the only one who is starting to question why Alex Salmond does not understand this. Does he not have the bottle to go for full independence for Scotland, political and fiscal?

Something fishy in the state of Europe

Calton has always thought that 'independence in Europe' is a contradiction in terms. Why cut loose from a democratically elected parliament in Westminster only to submit to an unelected bureaucracy in Brussels? Do we really want to become part of a Greater Germany, the creation of which is the only way forward if the Euro is to survive? David Cameron has very sensibly told Merkozy where to go, in order to protect the City of London. Would that someone would do the same to protect what's left of the Scottish fishing industry!