Tight polls have many in Washington freshly alarmed, with the White House and many American heavyweights voicing strong support for keeping the United Kingdom together.
The no camp warns that Scotland would lose not just the British pound but a sizable chunk of its financial sector as banks and insurers flee south, taking jobs and capital with them. With the future of oil revenues uncertain and declining, an independent Scotland could not afford its current welfare state, let alone expand it, the argument goes.
Mr. Greenspan, a former chairman of the Federal Reserve, told The Financial Times this week that the economic consequences of independence would be “surprisingly negative for Scotland, more so than the Nationalist Party is in any way communicating.” [eap_ad_2] He said that pro-nationalist assurances that Britain would continue to serve as Scotland’s central bank after a divorce were most likely wrong, and that attempts by a newly independent Scotland to use the British pound would “break apart very quickly.”
Others see both the risks and benefits of independence as overstated. The new nation would be well-off to start with, but on course to grow poorer: Scotland has a G.D.P. per capita above most regions of Britain, lagging behind only London and the southeast of England. But Scottish productivity is 11 percent lower than in the rest of Britain, and its population is unhealthier and aging more rapidly. Mr. Salmond’s plan to increase public spending by 3 percent a year means that even if the Scottish government spends all of its oil revenues, the hole in its finances will grow without higher taxes or higher-than-anticipated economic growth.
If the pro-independence side wins, economists predict, Scotland would face the uncertainty that would hang over 18 months of divorce negotiations, which will tackle thorny issues like the division of oil revenues, the national debt and the currency.
The currency has been the biggest flash point in recent months. Even left-leaning economists warn that a currency union that lacks a fiscal union and a true “lender of last resort” would make Scotland vulnerable to the same risks that nearly undid the eurozone. Excluding oil, Scotland ran a public sector deficit of nearly 11 percent of its national income in 2012-13 — a bigger gap than in Greece or Ireland.
“In psychological terms, independence represents a form of magical thinking,” said Colin McLean, a Scottish fund manager. “Without understanding the precise mechanism, this single change represents a cure-all for widely conflicting aspirations ranging from growth to redistribution.”
Not all business leaders are against independence. Ken Beaty, a former investment strategist and a Scot, lives in England so cannot vote, but said he saw the struggle for Scots as hope versus fear. “But some things are worth taking risks for,” he said.
Stephen Gethins, a former adviser to Mr. Salmond, said that economists were focused too much on the challenges of independence instead of on the opportunities presented by the Scottish resources of oil, gas and renewable energy through wind and waves; of whisky, food and tourism; of a thriving energy-services sector; and of a people that have traditionally exported their best minds to London.
Mr. Gethins pointed to Joseph Stiglitz, a Nobel Prize-winning economist, who has dismissed most of the warnings, arguing in The Scotsman that “independence may have its costs — although these have yet to be demonstrated convincingly; but it will also have its benefits,” which Scotland can recapture through the taxes it would not have to share with London.
The referendum allows those 16 and over to vote, and while younger voters are divided in their opinions, they also appear more likely to be optimistic and less likely to be swayed by economic arguments. Kate Macauley, 19, flew home to Glasgow from a summer job in Massachusetts to vote.
“There’s nothing sure, but I want to make our own way, to improve things we want to improve,” she said. And if the noes win? “I’d be devastated,” she said. “I’d just hope that somehow we’d have another chance.”
Steven Erlanger reported from Edinburgh, and Katrin Bennhold from Glasgow.
(New York Times)[eap_ad_3]
