Sweden chose not to join the Euro.

Oddly - European nations that don't use the Euro are generally much better off: Norway (though not EU), Denmark, Sweden, UK.

In hindsight, the UK's decision to not join the Euro is widely accepted as smart.

The Euro is effectively a 'hard Germany currency' that has entrapped the periphery of Europe into a monetary system that massively favours the Germans. Maybe it could have worked out - but from 2000-ish to 2008 - world bankers assumed the Euro meant 'collective risk pooling' so the periphery countries loaded up on cheap debt. But when the crash happened - we discovered there were going to be no bailouts - leaving the periphery with a massive balance sheet problem, and the total inability to manage monetary policy - or rather - they're stuck on a 'strict currency' which favours Germany who already had several advantages.

But I agree, if Scotland does go indy, then it may very well introduce a pegged currency, which makes sense as something temporary.

This is not entirely true. The Netherlands, Austria, Luxembourg, Belgium and France for example fare just fine with the Euro.

The problems you mentioned (and some non-Euro countries being better off) are caused by structural problems in those countries, which are only tangentially related to the common currency. From an economic point of view those countries probably shouldn't have adopted the Euro so quickly in the first place but were allowed to do so nonetheless for political reasons.

We don't fare just fine with the Euro. By having fixed exchange rates between countries, the only remaining economic variable that can be adjusted, is employment. (It doesn't matter if it's public or private employment). This is why the EU tells France and other countries to reduce the number of public employees, and why France has been losing one 1000-employee enterprise every day since the introduction of the Euro.

And the countries you listed are not the only ones in the Euro, think about how Spain, Portugal, Italy and Greece are faring with the Euro! It's worse than a war!

It's difficult fix "structural problems" when the monetary policy is decided by others, and not following your interest.

Whoever thinks the Euro is a success has not been paying attention and probably don't understand how monetary policies (and money) works.

The Euro-area countries has been forced to follow procyclical policies, in a time when govern spending was necessary.

France is a bank crisis waiting to happen though...

> Denmark

The Danish Krone is pegged to the Euro, within a very tight margin.

http://www.xe.com/currencycharts/?from=DKK&to=EUR&view=5Y

And you've missed Poland, Hungary, Czechia, Romania and Bulgaria; these countries don't use the Euro, but aren't usually considered much better off.

Well, Eastern European countries are growing much more rapidly than the others.

But they are definitely different - they were closed economies, way behind, and there's advantages to their having the Euro (should they get it). Which is different from Greece/Spain.

Moreover, they want to be in the Euro :) the Swedes, Danes, English etc. chose to not use it.

> Oddly - European nations that don't use the Euro are generally much better off

So is it that countries that took the euro were hurt by it, or that countries with already strong currencies chose not to take the euro?

It could be both.

Anyway, it's not so difficult to see why to have the flexibility of adjusting your currency, independently of the rest of the system, to suit your current situation is a good thing.

micro-services anyone?

I think the point is the spiteful UK government would deliberately stop Scotland keeping the pound.

They can't stop Scotland from keeping the pound. They can stop Scotland from issuing its own notes valid in the remaining parts of the UK, but there is no way for the UK government to unilaterally decide that Scottish businesses and persons can't use GBP - they will have no jurisdiction over them if Scotland becomes independent.

As I've said above they won't act as lender of last resort and they won't set monetary policy with regard to the needs of Scotland. A currency peg can be broken, though it is embarrassing and usually very expensive during the period you try and defend it - see "Black Wednesday".

Sticking with Sterling wouldn't even allow the option of crashing out of the monetary peg if needs be. I think you'd see an exodus of financial institutions' head offices down to London. An independent Scotland simply couldn't afford to bail out a large institution in Sterling, or even if it let banks fail couldn't afford the economic hit because its debts would be denominated in Sterling. Iceland was able to devalue by 60%, Greece wasn't able to.

The point of the currency debate is that it has consequences with whichever choice is taken. Separately applying to join the EU saying "yes I know I have to join the Euro, but I'm not actually going to do that" isn't the best strategy in the book. France may get to pull that kind of thing, but they're already in the tent.

Several valid points there, but none of them are relevant to what I pointed out, which was simply that if the Scottish government decides they want to use GBP, nobody can stop them (short of invading, I guess).

There are serious disadvantages to using someone elses currency though.

The scottish government would likley be forced to strongly discourage the use of the UK pound to maintain fiscal control.

> would likley be forced to strongly discourage the use of the UK pound to maintain fiscal control

Do you mean "monetary control"? What do you mean by "strongly discourage"? Forced by whom, or by circumstances?

To allow other countries to decide you monetary policy is courting disaster.

"strongly discourage" is as easy as not accepting payment tax in pounds.

> Forced by whom

Forced by currency speculators. New currencies are always strained, and given an independent Scotland would be close to bankruptcy anyway, a fully-pegged currency would be (how do I say this) difficult.

You're talking pegging, but my earlier comment was about keeping GBP as the official currency. The two are separate options.

What vidarh said. Country A can use country B's currency without any consent; lots of countries do this. Some of the more volatile countries use dollars unofficially as "hard" currency for big purchases.

I'd expect Scotland to parallel Ireland's history of using the pound and pound-equivalent: https://en.wikipedia.org/wiki/Irish_pound

See also https://qz.com/260980/meet-the-countries-that-dont-use-their...

Scotland is fairly small country, starting their own currency does not make much sense.

Monte Negro is using euro, and is not even part of EU yet https://en.wikipedia.org/wiki/Montenegro_and_the_euro

Scotland has about the same population as Norway or Ireland — 5.4 million — not Montenegro (0.62 million). GDP on the order of US $245Bn, 40-50 times higher than Montenegro. (And, geographically, 70% of the land area of England).

Politely, you might want to check your assumptions: I submit that if Norway can run a currency, or Ireland (which joined the Euro after running its own free-floating currency for multiple decades) then Scotland should be able to.

* The Scottish economy is about 50x larger than Montenegro, so "fairly small" is relative. Similar-sized Denmark, Sweden and Norway have their own currency, let alone tiny Iceland.

* The EU and ECB aren't particularly happy that Montenegro is using the Euro without being a member anyway...(see your wiki link)

Scotland already has three banks issuing their own bank notes (backed by GBP on deposit in their vaults). Independence wouldn't change that, except that the names on the notes would have to be changed from Pounds Stirling.

Those banks also have access to the Bank of England as a lender of last resort and the international market's backing for the UK's current economic policy. Scotland has a fairly developed financial sector, the currency issue is a lot more complicated than "pick one".

Pegging your currency to another when you don't have the fundamentals to match it tends to be of interest to George Soros, especially when you don't have much in the way of foreign currency reserves to defend it.

> Those banks also have access to the Bank of England as a lender of last resort

Can you imagine a future where the independent Scottish government could arrange a similar deal with another financial institution, to cover them until ECB took on the role?

> Pegging your currency to another when you don't have the fundamentals to match it tends to be of interest to George Soros

When was Black Wednesday for Montenegro?

Given that the European Central Bank doesn't act as a lender of last resort for individual banks (and really doesn't like being for the Eurozone, cf Greece) it isn't going to step in to cover Scotland. So you're either looking at another Government or perhaps one of the massive re-insurers, can you imagine what the insurance premiums would be on that arrangement?

The much more likely alternative is that the Bank of Scotland and Royal Bank move their HQ to London. Standard Life (and therefore Aberdeen Asset Management) probably as well. Not all their staff will move, but their profits will and some highly paid staff will go. That will in turn have an impact on the nascent FinTech sector.

> the European Central Bank doesn't act as a lender of last resort for individual banks

I do think they'd buy independent Scottish treasury bonds & then the independent Scottish government can use the proceeds for emergency lending. Isn't this how the German banks are covered?

If Scotland were in the Eurozone yes. Getting them to do that while applying to join, while also potentially giving none too subtle nods and winks that you don't actually intend ever adopting the Euro is stretching credibility.

OK! I understand your point.

Bulgarian or Bosnian currencies as well as many central African ones are pegged to Euro since the times of German mark and French frank. And suggered no "Sorosian" attack so far.

Small correction: the money is backed by GBP in Bank of England vaults (sent from Scotland). That would have to be transferred north if Scotland decides to create a National Bank.

>Independence wouldn't change that, except that the names on the notes would have to be changed from Pounds Stirling.

Pounds Sterling.

Stirling is a city in Scotland.

wow, a typo

the joke is they'd also have to be changed from that

Yeah, maybe they'll rename it pounds stirling. :)