UK & World News

  • 24 August 2014, 3:52

Independent Scotland 'Would Have To Join Euro'

Alex Salmond's "only realistic plan B" for the currency of an independent Scotland is the euro, according to shadow chancellor Ed Balls.

Mr Balls reiterated his warning that the Scottish National Party's preference for keeping the pound in a formal currency union with the rest of the UK is "off the table".

The Labour MP, who was against UK entry to the euro when he worked for Gordon Brown, has previously ruled out a currency union if his party wins the next election.

The current Conservative chancellor, George Osborne, and Scottish Liberal Democrat Treasury Secretary Danny Alexander have also dismissed the prospect.

Keeping the pound without a currency union would accelerate "the movement of financial services out of Scotland", Mr Balls told the Observer newspaper.

Meanwhile, new currency would be "very expensive, very risky" and people would "pay a big price in terms of higher interest rates for mortgages", Mr Balls claimed.

He said: "I fear that an independent Scotland would end up finding that joining the euro would be the least worst of all the bad options.

"It's not what I would choose for Scotland. And I am not surprised at all that Alex Salmond doesn't want to admit it now, but joining the euro would likely be his only realistic plan B."

Mr Balls added: "Given the size of the UK relative to Scotland, given that Scotland would be leaving the UK, the size of the Scottish financial sector and given the risk, therefore, to UK taxpayers, a sterling currency area would be off the table."

He urged Mr Salmond "to tell people what plan B is" at his next debate with Better Together leader Alistair Darling, which will be shown on Sky News on Monday.

A spokesman for Mr Salmond told The Observer: "An independent Scotland will keep the pound because it's our currency too, and pensions and public services will be more sustainable after a yes vote because Scotland's economy is stronger than the UK's."

A Better Together spokesman said: "Alex Salmond wants us to vote for independence on the basis of his blind faith and guesswork alone.

"We should say no thanks to taking on so much risk."

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