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Debt threat is highly irresponsible.

Byline: RONALD MACDONALD Adam Smith Professor of Political Economy University of Glasgow

THE First Minister has claimed that if Scotland doesn't get its share of the UK."'s financial assets post-independence, he will renege on Scotland's fair share of UK debt.

Among these assets would be foreign exchange reserves, gold held by the central bank and the actual sterling cash in circulation.

I'm unaware of any politician who has said Scotland would be denied its fair share of these assets.

Therefore making unjustified claims that you are going to renege on your fair share of debt is one of the most irresponsible things a potential leader of an independent Scotland could be saying. It signals to financial markets a lack of willingness to pay your debts and they will punish an independent Scotland by demanding very high interest rates to finance debt.

That means interest rates on mortgages and credit cards are likely to go through the roof in an independent Scotland.

Indeed, financial markets may well lock Scotland out of international capital markets, as happened with Argentina after its default, forcing it to run a fiscal surplus. This would imply dramatic spending cuts.

may well lock Scotland out of international capital markets, as happened with Argentina after its default, forcing it to run a fiscal surplus. This would imply dramatic spending cuts.

Such austerity would be far, far worse than anything seen in the Such austerity would be far, far worse than anything seen in the UK in recent years.

CAPTION(S):

WA W RNING Professor Professor Ronald MacDonald

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Publication:Daily Record (Glasgow, Scotland)
Geographic Code:4EUUK
Date:Sep 5, 2014
Words:260
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