Britannia Radio

TELEGRAPH     8.1.09
The euro isn't the answer to Alex Salmond's prayers
The First Minister's suggestion that Scotland should dump the pound 
was a mistake.

    By Alan Cochrane

Alex Salmond is not the first politician to put his foot in it while 
abroad and out of sight and sound – or so he thought - of the media 
scrutineers from his homeland. And he probably won’t be the last.

However, in confiding his deepest thoughts on the future of the 
currency in an independent Scotland to the, no doubt deeply 
engrossed, people of Catalonia the First Minister offered up a major 
hostage to fortune for his political opponents.

It is true that Mr Salmond said some nice things about the euro in a 
radio interview in Scotland a few days ago but he was much more 
explicit about his admiration for that particular currency unit in a 
trip to Barcelona before Christmas.

As my colleague, Simon Johnson, reported yesterday, not one but two 
Catalan TV stations got the benefit of what have turned out to be the 
First Minister’s controversial views on this highly charged subject.

What he said was that dumping the (British) pound sterling and 
replacing it with the (European) euro was the way to go for 
Scotland’s future. And what’s more, such a move would prove to be a 
vote winner with the Scottish people.

Mr Salmond linked his demand for greater fiscal powers for Scotland 
so that all major economic decisions could be taken in Edinburgh not 
London with a switch from sterling to the euro.

His words to the Catalans who enjoy – if that is the correct word – a 
degree of autonomy within Spain similar to that of Scotland within 
the United Kingdom, contrast strongly with his words of almost 
exactly two years ago. Then Mr Salmond said that an independent 
Scotland would stick with the pound sterling.

Mind you, then sterling was riding high. Last year it dropped 30 per 
cent in value and Mr Salmond’s chief wordsmith was perfectly 
straightforward – if not blatantly opportunistic – when he said that 
the plummeting pound had now caused many businessmen to view euro 
membership much more favourably.

It is almost certainly being unkind to the First Minister to say that 
he’s rather pleased about the pound’s demise; after all I’m sure he 
doesn’t enjoy seeing people’s standard of living and very livelihoods 
damaged the way they have been. However, I am equally certain that he 
won’t be crying any tears whatsoever that the pound, as a major 
instrument of the British state, is in such a condition.

And as a leading advocate of the ‘Scotland In Europe’ strand of 
separatist thinking, which sees Scotland breaking away from the UK 
but becoming a full member of the EU, it has always been de rigeur 
for Mr Salmond to get shot of sterling as soon as he can.

Unfortunately for him, it’s far from certain that the euro is the 
answer to anyone’s prayers in these tough economic times. Its 
inflated value is turning places like Newry, on the border between 
Northern Ireland and the Irish Republic, into boom towns as citizens 
from the south flood the place to take advantage of the euro’s 
purchasing power but it is making life very difficult for 
manufacturers and other exporters from the euro zone.

And as for being popular with the voters, is Mr Salmond being 
serious? He says it would take a referendum to effect a change in 
currency but a recent BBC poll showed that 71 per cent of people are 
still against the euro. How many referendums does this man want to lose?

The other issue not yet addressed by the First Minister is that, as 
David Mundell, the Shadow Scottish Secretary pointed out, Scotland’s 
trade with England is actually twice as big as our trade with the 
rest of the world, never mind just the Eurozone.

Would it help or hinder that trade with England if it had to be 
conducted in two different currencies? Now, Mr Salmond may well wish 
to see more of Scotland’s trade being done with other euro-zone 
countries. He may also wish to see England drop sterling in favour of 
the euro, too. However, as neither is likely shouldn’t he view the 
world as it is, not as he’d like it.

And it was difficult to disagree with Jeremy Purvis, of the Liberal 
Democrats, who said that the last thing Scottish business needed was 
the country's First Minister “doing down your economy when he is 
abroad."
Ditto his view on Mr Salmond personally: "Once again he has shown 
himself to be more interested in self promotion than the interests of 
Scottish business and consumers."