On the other hand, one of the main arguments against leaving the UK, at the time of the referendum, was that Scotland couldn't leave the union and keep the GBP as their currency, and they feared a weak and especially a volatile currency could wreck havoc on their economy. Having a secure path to EU membership (without veto power by the UK) and the backing of the ECB would help a lot against that risk.
Scotland outside of UK and part of the EU is a Scotland ripe for service industry. If the EU helps it's member states to be better than they are individually, which is supposed to be how it works, then there's no reason to assume Scotland will be running at a deficit forever.
BTW Germany is currently the country which suffers the most from the low interest rates of the ECB.
The problem is that countries like Greece, Spain, and Portugal are being forced to cut spending, which doesn't end their crisis but will prolong them and make everybody poorer in the process.
There is certainly a point in which the deficit is too high, but where this point is, is unknown. It is the same with inflation, a little bit inflation is good for an economy. It gives incentives to spent money and to invest now and don't wait for lower prices. But too high inflation will hurt an economy badly.
Maybe I didn't make my self clear: I didn't say that deficit is a problem per se. I argued that given the current design and status quo in the EU, any country that has a deficit vis-a-vis Germany should stay out of the common currency because inevitably, it will end up like Greece in the long run.
I agree with most of what you said. Regarding Germany and the ECB, that's true but it's only a small part of the bigger picture.
European countries (except UK, DK, SE) need to join the Euro but not right away. Many aren't there yet. In Scotland's case it can remain in a currency union with the UK until they are ready to join the Euro. Ireland was in a currency union with the UK after independence. It's not an exotic relationship, especially with economies so intertwined.
IMHO you're misunderstanding: Listening BBC Radio 5 the last couple of days I can say that lack of transparency, austerity promotion and the way countries like Greece (primarily), Ireland and Portugal were treated in 2014 and 2015 by the EU played a major role in turning voters to Brexit.
agreed :-)
There's an interesting question around the fact that the UK has an opt out of the Euro.
Surplus recycling is nowhere to be found in the European Union, vis-a-vis Germany Scotland will have deficit, hence it's doomed in the long run to become like Greece.
The way the EU manages the economy, it's stupid for any deficit country to come in and compared to Germany, everybody will be in huge deficit in the long run. At that point you depend on the Bundesbank to over-value and the German government to raise salaries. None of this will happen, at that point you'll have a country on it's knees depending on a foreign institution (the ECB) who is controlled by a foreign nation which has it's own interests to protect.
I'm sorry for GB. I'm sorry that a nation had to go through this, but their best bet is to stick together.
EDIT: The first thing that the German gov did after Brexit says a long shot about how Germany envisions Europe: They summoned the 6 (or 7) countries that created the European Union. But the EU has 27 members now.
Do you really want to be part of a union who doesn't give a damn about you and give your monetary policy to that union?
About 16 years ago, at her last speech, M. Thatcher in a rare moment of enlightenment said about the EUR: He who control the interest rates controls the Economy and he who controls the economy controls the politics in Europe
She was spot on.