Saturday

21st Oct 2017

Choose between pound or EU membership, Rehn tells Scots

  • Former eurozone commissioner Olli Rehn has entered into the Scottish independence debate (Photo: consilium.europa.eu)

An independent Scotland would have to choose between using the pound and joining the EU, the bloc's former economic affairs commissioner has said.

In a letter to the UK's treasury minister Danny Alexander released on Tuesday night (2 September), two weeks before Scotland's four million voters decide whether to leave the UK, Olli Rehn stated that the Scottish government's plan to keep sterling without a formal currency union with London would be incompatible with EU membership.

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

"As to the question of whether 'sterlingisation' were compatible with EU membership, the answer is that this simply would not be possible, since that would obviously imply a situation where the candidate country concerned would not have a monetary authority of its one, and thus no necessary instruments for EMU," he wrote.

The question of whether Scotland could continue to use the British pound as its currency has been one of the key arguments during the campaign.

Nationalist leader Alex Salmond has insisted that Scotland would not seek to join the eurozone and would keep the pound with or without the consent of Westminster.

Keeping the pound would also mean that Scotland would remain subject to the Bank of England's decisions on interest rates and monetary policy.

Both the governing Conservative party and the opposition Labour party have said that they would not allow an independent Scotland to use sterling.

Meanwhile, Rehn also added that Scotland would not be able to walk away from its responsibility for part of the UK's national debt if London refused to allow it to have a currency union.

Olli Rehn served two terms in the EU executive, firstly as enlargement commissioner followed by four years as the bloc's economic affairs chief. In May he was elected as an MEP for the Finnish Centre party which sits with the Liberal MEP group.

His intervention will be a blow to the Scottish Nationalist cause after a poll released earlier this week indicated that the independence campaign is gaining support ahead of the 18 September vote.

Although a majority of Scots are still set to support remaining in the UK, their lead has narrowed to six percent with 47 percent now backing independence.

Last week, Salmond was widely perceived to have won the second televised debate with Labour politician Alistair Darling, the leader of the pro-Union Better Together campaign.

In a speech on Wednesday, Danny Alexander, himself a Scottish Liberal MP, will compare Scotland to Panama, which uses the US dollar, and claim that Salmond's currency plan is a "bonkers idea" that would "impose costs and risks on people and businesses in Scotland".

"No country has ever joined the EU using only the currency of another country at the point of accession".

For his part, Salmond responded to Rehn's letter, commenting that "we believe there will be a common sense agreement on a common currency" if Scots voted for independence.

Investigation

The mysterious German behind Orban's Russian deals

Klaus Mangold, a German businessman with good connections in Russia, and who provided a jet for Commission vice-president Guenther Oettinger, played a crucial role in Hungary's controversial Paks nuclear deal with Russia, Direkt36's investigation has found.

Focus

Health MEPs want to phase out glyphosate by 2020

A committee resolution said the proposal to renew the glyphosate permit for a decade "fails to ensure a high level of protection of both human and animal health and the environment".

News in Brief

  1. Rajoy to trigger Article 155 on Saturday in Catalan crisis
  2. EU conducts unannounced inspection of German car firm
  3. Lithuania calls for new EU energy laws
  4. EU leaders aim for December for defence cooperation
  5. Juncker says hands tied on Russia pipeline
  6. Czechs set to elect billionaire Andrej Babis
  7. Italian regions hold referendums on more autonomy
  8. EU leaders refuse to mediate Catalonia conflict

Stakeholders' Highlights

  1. Mission of China to the EUPresident Xi Jinping Proposes Stronger Global Security Governance at Interpol Assembly
  2. European Friends of ArmeniaEU Engagement Could Contribute to Lasting Peace in Nagorno-Karabakh
  3. UNICEFViolence in Myanmar Driving 12,000 Rohingya Refugee Children Into Bangladesh Every Week
  4. European Jewish CongressBulgaria Applauded for Adopting the Working Definition of Antisemitism
  5. EU2017EENorth Korea Leaves Europe No Choice, Says Estonian Foreign Minister Sven Mikser
  6. Mission of China to the EUZhang Ming Appointed New Ambassador of the Mission of China to the EU
  7. International Partnership for Human RightsEU Should Seek Concrete Commitments From Azerbaijan at Human Rights Dialogue
  8. European Jewish CongressEJC Calls for New Austrian Government to Exclude Extremist Freedom Party
  9. CES - Silicones EuropeIn Healthcare, Silicones Are the Frontrunner. And That's a Good Thing!
  10. EU2017EEEuropean Space Week 2017 in Tallinn from November 3-9. Register Now!
  11. European Entrepreneurs CEA-PMEMobiliseSME Exchange Programme Open Doors for 400 Companies Across Europe
  12. CECEE-Privacy Regulation – Hands off M2M Communication!

Latest News

  1. The mysterious German behind Orban's Russian deals
  2. Mogherini urged to do more on Russian propaganda
  3. Turkey funding cuts signal EU mood shift
  4. Posted workers top EU agenda This Week
  5. Leaders lobby to host EU agencies at summit's margins
  6. Legal tweak could extend EU control on Russia pipeline
  7. Ukraine language law does not harm minorities
  8. EU begins preparations for Brexit trade talks