Independent Scotland 'could have AAA Credit Rating' - S&P
40 replies, posted
[quote]The report states emphatically that S&P would expect Scotland to ‘benefit from all the attributes of an investment-grade sovereign credit’ due to its ‘wealthy’ economy, and that it sees ‘no fundamental reason’ in terms of Scotland’s balance sheet why Scotland could not float its own currency (even though we do not intend to).
Interestingly, given that it comes on the heels of yesterday’s exaggerated media coverage of the statement by Standard Life, S&P actually reported that ‘a shrinking of Scotland’s ‘unusually large’ financial services sector could boost the country’s sovereign credit rating by reducing the size of the economy’s external balance sheet and reducing its liabilities’.[/quote]
News Source: [url]http://www.businessforscotland.co.uk...tandard-poors/[/url] & [url]http://www.telegraph.co.uk/finance/e...and-Poors.html[/url] (That one is surprising)
Standard and Poor's Paper: [url]http://www.scribd.com/doc/209646043/...ndent-Scotland[/url]
Interesting how coverage like this of the independence debate rarely gets attention in the mainstream media, huh?
So, they won't be able to piggyback of the UK's currency if they go independent, and their monetary choices going to the Euro are suicidally stupid.. yet, they will have an awesome credit rating.
That's a catch-22 if I've ever seen one.
If there are any economists on FP, I'd like to see this laid out in terms of game theory.. see which is the better choice.
Independent (ideal), Good credit rating (ideal), Lose money switching to Euro (not ideal).
Dependent (not ideal), Moderate credit rating [not much say] (not ideal), Keep monetary status with GBP (not ideal).
[QUOTE=Bradyns;44089638]So, they won't be able to piggyback of the UK's currency if they go independent, and their monetary choices going to the Euro are suicidally stupid.. yet, they will have an awesome credit rating.
That's a catch-22 if I've ever seen one.
If there are any economists on FP, I'd like to see this laid out in terms of game theory.. see which is the better choice.
Independent (ideal), Good credit rating (ideal), Lose money switching to Euro (not ideal).
Dependent (not ideal), Moderate credit rating [not much say] (not ideal), Keep monetary status with GBP (not ideal).[/QUOTE]
Well, if you read the S&P paper (You know, financial analysists and economists by business), they lay out how they came to that analysis, and they consider all three options (Independent Currency, Eurozone integration and UK currency union) - The latter two are the safest bets, with an almost guaranteed BBB or higher credit rating. The former option is the riskiest, and would carry with it an early slump period, but they see no reason that it wouldn't recover - comparing it to New Zealand's economy in that case.
I don't know why everyone keeps acting as if Scotland is poor.
[QUOTE=Marzipas;44089886]I don't know why everyone keeps acting as if Scotland is poor.[/QUOTE]
Because it suits their internal narrative where Scotland striking out on it's own is a bad idea in every possible way.
I love how david cameron was going on like earlier on about there not being enough oil for scotland to use if independent, and then only a few weeks ago, he was going on about there being too much oil for scotland to mange on its own.
the no campaign is constantly spurting out stuff, I just always find it weird that the yes campaign never really comes out with more stuff. I have a feeling they are waiting until further down the line until they put out some serious figures.
[QUOTE=Craigewan;44089931]Because it suits their internal narrative where Scotland striking out on it's own is a bad idea in every possible way.[/QUOTE]
Well I read The Economist, and all they pretty much have to say on the matter is that its a poorly thought out idea proposed by Scottish Nationalists who have no idea what terrible its going to be for them.
[QUOTE=Craigewan;44089709]Well, if you read the S&P paper (You know, financial analysists and economists by business), they lay out how they came to that analysis, and they consider all three options (Independent Currency, Eurozone integration and UK currency union) - The latter two are the safest bets, with an almost guaranteed BBB or higher credit rating. The former option is the riskiest, and would carry with it an early slump period, but they see no reason that it wouldn't recover - comparing it to New Zealand's economy in that case.[/QUOTE]
But, NZ has long established trade partners, and is in good favour with its surrounding nations, as well as being a member of the Commonwealth..
If left alone, Scotland will be in a very vulnerable spot, trying to jump-start import/export agreements and contracts with nearby nations, even the UK.. and they won't have the luxury to independently fall back on the UK.
The UK will hold the opinion "Yeah, we'll help you, but first you have to say that you shouldn't have left; GROVEL!" ~hyperbole~
[QUOTE=Bradyns;44089979]But, NZ has long established trade partners, and is in good favour with its surrounding nations, as well as being a member of the Commonwealth..
If left alone, Scotland will be in a very vulnerable spot, trying to jump-start import/export agreements and contracts with nearby nations, even the UK.. and they won't have the luxury to independently fall back on the UK.
The UK will hold the opinion "Yeah, we'll help you, but first you have to say that you shouldn't have left; GROVEL!" ~hyperbole~[/QUOTE]
Actually Scotland has recently been striking trade deals with China, Brazil, India and Russia, we're doing pretty well for ourselves.
[editline]1st March 2014[/editline]
On top of that there's interest from a lot of corporations looking to set up green energy agreements with us like Mitsibushi wanting to set up an offshore wind farm.
[QUOTE=Marzipas;44089958]I love how david cameron was going on like earlier on about there not being enough oil for scotland to use if independent, and then only a few weeks ago, he was going on about there being too much oil for scotland to mange on its own.
the no campaign is constantly spurting out stuff, I just always find it weird that the yes campaign never really comes out with more stuff. I have a feeling they are waiting until further down the line until they put out some serious figures.[/QUOTE]
I think the Yes campaign leaves it up to independent parties to bring the figures to the table, such as S&P (And a lot of Academics of various fields have spoken up in support of it), because they know that anything the SNP says is going to be buried and torn to shreds by the rabid Unionist camp and their scaremongering/fearbrokering.
[QUOTE=bravehat;44089987]Actually Scotland has recently been striking trade deals with China, Brazil, India and Russia, we're doing pretty well for ourselves.
[editline]1st March 2014[/editline]
On top of that there's interest from a lot of corporations looking to set up green energy agreements with us like Mitsibushi wanting to set up an offshore wind farm.[/QUOTE]
Of this, I did not know.
That's pretty awesome!
It will however take years to finalise deals like this.
[QUOTE=bravehat;44089987]Actually Scotland has recently been striking trade deals with China, Brazil, India and Russia, we're doing pretty well for ourselves.
[editline]1st March 2014[/editline]
On top of that there's interest from a lot of corporations looking to set up green energy agreements with us like Mitsibushi wanting to set up an offshore wind farm.[/QUOTE]
all this is a lot of sound and fury from a country that will ultimately be worse off than before when it leaves regardless.
[QUOTE=bravehat;44089987]Actually Scotland has recently been striking trade deals with China, Brazil, India and Russia, we're doing pretty well for ourselves.
[editline]1st March 2014[/editline]
On top of that there's interest from a lot of corporations looking to set up green energy agreements with us like Mitsibushi wanting to set up an offshore wind farm.[/QUOTE]
Cheers for that, saved me having to write about that too.
this is some good news at least
[QUOTE=Bradyns;44090014]Of this, I did not know.
That's pretty awesome!
It will however take years to finalise deals like this.[/QUOTE]
Actually I'm pretty sure they're about to start building the wind farm and the deals with China, India and Brazil have already been struck.
Like the whole things been done years in advance, these aren't hopes and shit, these have already been put in place.
[QUOTE=NoDachi;44090015]all this is a lot of sound and fury from a country that will ultimately be worse off than before when it leaves regardless.[/QUOTE]
how?
[QUOTE=NoDachi;44090015]all this is a lot of sound and fury from a country that will ultimately be worse off than before when it leaves regardless.[/QUOTE]
Really, you're just parroting the same old lines which this report kinda says are unfounded.
Try again?
[QUOTE=bravehat;44090058]Actually I'm pretty sure they're about to start building the wind farm and the deals with China, India and Brazil have already been struck.
Like the whole things been done years in advance, these aren't hopes and shit, these have already been put in place.[/QUOTE]
What about major infrastructure, does it belong to Scotland, or was the cost/development partly loaned from the UK? (This would include airports, military facilities, ports, transport, industrial facilities, power stations, etc..)
If it's loaned, they will be paying out the arse.
Sorry to buzz you on everything, but I am not that well informed on the issue.
[QUOTE=NoDachi;44090015]all this is a lot of sound and fury from a country that will ultimately be worse off than before when it leaves regardless.[/QUOTE]
[media]http://www.youtube.com/watch?v=RoZ7JXkv6_o[/media]
[QUOTE=Bradyns;44090101]What about major infrastructure, does it belong to Scotland, or was the cost/development partly loaned from the UK? (This would include airports, military facilities, ports, transport, industrial facilities, power stations, etc..)
If it's loaned, they will be paying out the arse.
Sorry to buzz you on everything, but I am not that well informed on the issue.[/QUOTE]
Scottish taxes contribute to the UK currently, and is then allocated a proportion of the UK's budget. Thus, anything built by the Scottish government is Scottish. This is complicated however by shared resources like the army, army bases and such like - but it is not as big an issue as you suggested in your post.
[url]http://www.economist.com/blogs/blighty/2014/02/economics-scottish-independence[/url]
and the rest of them
[url]http://www.economist.com/world/britain[/url]
Basically Ireland suffered several decades of economic decline because of its economy separating from the UK and that was a much more simple economic separation.
Scotland's banks are completely unbailable since they're completely outsized by the GDP of the entirety of Scotland by a factor of twelve. So any economic turbulence, which will happen will crash its entire economy. No trade agreements with anyone can stop that.
[QUOTE=Marzipas;44089886]I don't know why everyone keeps acting as if Scotland is poor.[/QUOTE]
It's an textbook tactic to dissuade separatist sentiments: deny the nation seeking independence any economic merits and competency while accentuating the negative. It's pretty jarring that every time I read arguments against Scottish independence, it is [I]the exact same arguments[/I] used against separatists in Catalonia and Quebec.
[QUOTE=NoDachi;44090105][url]http://www.economist.com/blogs/blighty/2014/02/economics-scottish-independence[/url]
and the rest of them
[url]http://www.economist.com/world/britain[/url]
Basically Ireland suffered several decades of economic decline because of its economy separating from the UK and that was a much more simple economic separation.
Scotland's banks are completely unbailable since they're completely outsized by the GDP of the entirety of Scotland by a factor of twelve. So any economic turbulence, which will happen will crash its entire economy. No trade agreements with anyone can stop that.[/QUOTE]
The English GDP/capita excluding London is lower than Scotland. Following the same logic, England is doomed too if anyone is going to believe you.
[QUOTE=Flapadar;44090173]The English GDP/capita excluding London is lower than Scotland. Following the same logic, England is doomed too.[/QUOTE]
erm no that isn't how it works
it would take scotland twelve years of paying [I]everything it ever makes[/I] to bail out its financial system if it gets into trouble.
That is why it wants the UK to cover that, which has just told them no.
[QUOTE=NoDachi;44090185]erm no that isn't how it works
it would take scotland twelve years of paying [I]everything it ever makes[/I] to bail out its financial system if it gets into trouble.
That is why it wants the UK to cover that, which has just told them no.[/QUOTE]
Where the fuck are you getting those figures?
Scotland's GDP is ~£148bn; debt proportional to population inherited from the UK is ~£80bn
[QUOTE=Flapadar;44090200]Where the fuck are you getting those figures?
Scotland's GDP is ~£148bn; debt proportional to population inherited from the UK is ~£80bn[/QUOTE]
The Economist?
Scotlands banks are built around the UK, Scotland's independent GDP is too low to support its financial system by a factor of twelve.
They simply don't have the money to bail themselves out, ever.
[QUOTE=Flapadar;44090173]The English GDP/capita excluding London is lower than Scotland. Following the same logic, England is doomed too if anyone is going to believe you.[/QUOTE]
excluding london
the city that contains almost 1/6th of the UK's population
attempting to make analysis of england without london is like making an analysis of the US and just ignoring the east coast
To make my point clearer Scotland Debt / GDP = 54% ; UK Debt / GDP = 88%
[editline]1st March 2014[/editline]
[QUOTE=NoDachi;44090216]The Economist?
Scotlands banks are built around the UK, Scotland's independent GDP is too low to support its financial system by a factor of twelve.
They simply don't have the money to bail themselves out, ever.[/QUOTE]
Are you going to use a source that isn't bias? You might as well quote the daily mail...
[QUOTE=Cloak Raider;44090217]excluding london
the city that contains almost 1/6th of the UK's population
attempting to make analysis of england without london is like making an analysis of the US and just ignoring the east coast[/QUOTE]
I was saying the rest of England is subsidised by London. Given that Scotland on average has a GDP higher than most of England; claims that we can't support ourselves are pretty unfounded..
[quote]LIKE most things in politics, referendums often raise more questions than they answer. And the ballot due to be held on Scottish independence this September is no exception to this rule. As we point out in this week’s print edition, several awkward questions over the financial consequences of Scottish independence have been raised this week. Will an independent Scotland be allowed to remain in the sterling area, or if not, would it honour its share of Britain's national debt? Might the new country not be allowed to join the European Union? And who will be responsible for the bailing out of Scotland's out-sized banks—whose assets are 12 times bigger than its GDP—if they run into trouble?[/quote]
[editline]1st March 2014[/editline]
[QUOTE=Flapadar;44090218]To make my point clearer Scotland Debt / GDP = 54% ; UK Debt / GDP = 88%
[editline]1st March 2014[/editline]
Are you going to use a source that isn't bias? You might as well quote the daily mail...[/QUOTE]
lmao comparing The Economist to the Daily Mail because its asking questions Scottish Nationalists don't like the hear.
[QUOTE=Flapadar;44090218]To make my point clearer Scotland Debt / GDP = 54% ; UK Debt / GDP = 88%
[editline]1st March 2014[/editline]
Are you going to use a source that isn't bias? You might as well quote the daily mail...[/QUOTE]
did you just say that the economist was biased
lemme guess the only reason you have for thinking that is "it's based in London!!!!!!"
[editline]1st March 2014[/editline]
[QUOTE=Flapadar;44090218]To make my point clearer Scotland Debt / GDP = 54% ; UK Debt / GDP = 88%
[editline]1st March 2014[/editline]
Are you going to use a source that isn't bias? You might as well quote the daily mail...
I was saying the rest of England is subsidised by London. Given that Scotland on average has a GDP higher than most of England; claims that we can't support ourselves are pretty unfounded..[/QUOTE]
London is IN ENGLAND you muppet
how the fuck can london be subsidising England when it IS ENGLAND.
shock horror our capital city, centre of commerce and trade supports the rest of the country
WHAT AN OUTRAGE, I GUESS ENGLAND IS IN A TROUBLING SPOT WHEN IT HAS TO RELY UPON ITS CAPITAL CITY
[QUOTE=NoDachi;44090230][editline]1st March 2014[/editline]
lmao comparing The Economist to the Daily Mail because its asking questions Scottish Nationalists don't like the hear.[/QUOTE]
"Asking questions" == pulling 'facts' out of thin air supposedly...
[QUOTE=Cloak Raider;44090241]
London is IN ENGLAND you muppet
how the fuck can london be subsidising England when it IS ENGLAND.
shock horror our capital city, centre of commerce and trade supports the rest of the country[/QUOTE]
The north east of England has a GDP/capita of £15,600. Scotland is at ~£24,000 - more than every part of the UK than London (which is £38,000).
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