Scotland: will it be the new Greece?

A word on Scotland. People keep asking me what I think about the possibility of Scottish independence. The chaos in the eurozone puts it nicely into perspective.

If Scotland votes to go it alone, they will end up with either the euro or the pound as their currency. The latter is more likely than the former, given that there is no legal reason to think that any arrangements Westminster has made with Brussels would extend to Holyrood.

So while Scotland’s government would get to tax and spend at will (for a while at least), interest rates and the like would probably end being set for Scotland by the Bank of England rather than the ECB.

But either way, Scotland would end up with something everyone in Europe is really wishing they didn’t already have: monetary union without fiscal union.

In the context of this month so far, that makes Mr Salmond’s plans to go it alone look totally ludicrous.