The reason Alex Salmond cannot answer the currency question is he does not truly want Scotland to be independent. He wants devo max. An independent Scotland would mint its own coins and create its own currency. Putting the symbols of the nation on the banknotes is one of the ultimate acts of sovereignty.
Alex Salmond wants a dependent Scotland, dependent on the Bank of England for its money and interest rates, and dependent on the EU for much of its legislation and government. The problem with this model is the rest of the UK and the rest of the EU will have views on what kind of a deal he could do, were Scotland to vote for his new kind of dependence. It could be a worse deal all round than Scotland currently enjoys within the UK and under the umbrella of the UK’s selective and idiosyncratic membership of the EU. Scotland could not expect opt outs from the Euro, Schengen and full tax contributions to the EU in the way the UK has negotiated.
Putting the symbols of your country on the banknotes is more than a nice to have, more than mere display. It means that the currency is supported by the taxable capacity of the country which issues it. It means that country, with all its wealth, tax revenue and legal powers stands behind the currency.
In 2008-9 the UK state and the pound sterling stood behind the two large Scottish banks that were in financial trouble, RBS and HBOS. RBS was almost too large for the UK state to stand behind. Losing just 1% of its assets meant losing £22 billion. It is difficult to see how the Scottish state, with just 8% of the UK’s tax revenue, could have stood behind such a massive bank in a credible way.
Currency matters. The rest of the UK is right to signal we could not live with a so called independent Scotland staying in the pound. Surely there has been enough misery on the continent, as countries have struggled within the Euro zone because they do not share a tax, spending and transfers policy. If you share a currency with the neighbours you do need central control of tax, benefits, transfers and much else to make it work.
If Mr Salmond is as keen on membership of the EU as he usually claims, he should also be honest about the logic of the Euro. Were Scotland to join the EU on its own, why would it get a sweetheart deal to stay out of the most important federal policy of them all, the common currency?
The true answer to Mr Salmond’s question is just this. His kind of independent Scotland would need a transition period with the groat, its own currency, followed by full membership of the Euro. To join the Euro Scotland would be required to cut its debt and deficit to qualify.