Economists and financial sector specialists have underlined what every downhome body knows – that if you default on due debt, your credit line dies with that abandoned debt.
Scotland’s First Minster, Alex Salmond has earlier, to the universal dropping of jaws, floated the notion that an independent Scotland would simply walk away from its share of the national debt if the UK didn’t agree to let it use the Great British Pound [GBP], with the Bank of England as lender of last resort. [And yes, of course there are risible ironies here in the resonance of the names of these ‘must haves’ for an ‘independent’ Scotland.]
The continuing crisis in the Eurozone and the core reason behind it – no central control of monetary policy, leaving the currency prey to be being dragged down by irresponsible or failing economies of some member states – could hardy make it more clear why the continuing UK is highly unlikely to take an identical risk with an independent Scotland.
The UK will have its own responsibilities and obligations to deliver and it could not defend putting those at risk.
The UK’s understandable caution is not being mitigated by the fact that the SNP’s prospectus for independence is effectively uncosted, with no attempt now being made to show where the funding will come from to pay for the regular new promises being made on boons that will result from independence.
At a time when the independence campaign is struggling against the prevailing winds of rationality, it would behove Mr Salmond to play a steady game and, to use the idiom which he adopts in wheedling hoedown style, ‘caw canny’.
The First Minister, however, has spectacularly cut loose from reason and from tactical credibility.
He has now repeated in a television interview his earlier threat, only this time he has declared that it is a certainty.
In an unusually maladroit choice of words as well as tactics, the First Minister has said that Scotland’s refusal to accept its share of the debt is not a negotiating position but ‘an absolute fact’.
A fact is something that has been seen to happen. This threat may be Mr Salmond’s absolute commitment. It is not ‘an absolute fact’.
Things got worse.
In one of his surreal mash ups, Mr Salmond said: ‘It was actually a Scot that invented the Bank of England, incidentally. It [Ed: meaning ‘the pound‘] doesn’t belong to George Osborne and therefore we are entitled to have it.’
Try that for a series of loony non-sequiturs.
The financial world is already sizing up Scotland in preparation for the attitudes and strategies it will adopt in relation to lending and investment in the event of this country becoming independent.
How exactly is it going to reassure them about how good a debt we would be or how secure a locus for investment we would be – if we start by saying if we don’t like something we’ll just walk away from our debts?
Saying ‘Ah but we’d never do that to YOU’, is hardly going to cut it.
Scotland will have to borrow and borrow substantially to fulfil its obligations and promises. If the financial world sees us as a dodgy customer, blithely walking away from our responsibilities in a huff, we will find it difficult to borrow on our bonds; and the interest charges levied on them will be even higher than they will be in any case for the first phase of a new country whose financial performance is unknown.
The First Minister’s grandstanding for the cameras was unbelievably irresponsible – profoundly damaging to the cause that has shaped his life and which, in the nature of the shoddy campaign he has largely determined, he has so unintentionally let down.
Mr Salmond is showing all the signs of strain in his increasingly erratic and ill-considered pronouncements, falling back on the entertainment value of the Jack-the-Lad persona that served him well when he was younger and burdened with no responsibilities.
For a mature politician with the gravest of responsibilities on his back from what he is asking this country to do on the basis of an unforgivably unsound prospectus, larking around in chest-beating extravagances for the media is no testimony to his fitness for the challenge.