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ARGeezer:
Then Scotland will have to accept having the Euro as their currency.

That is not a prerequisite to EU membership. Many of the recent members aren't part of the EZ and don't even have a "target date" (and never may at this rate).

by Bernard on Sat Jul 2nd, 2016 at 07:48:37 AM EST
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But then they will have to keep the English (sic) pound or adopt the Unicorn.
by gk (gk (gk quattro due due sette @gmail.com)) on Sat Jul 2nd, 2016 at 11:30:45 AM EST
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The Republic of Ireland used the British £ until 1979 - i.e. for over half a century after independence It then Introduced the Irish £ - linked to the European Exchange Rate Mechanism - and with a different rate to the £, and finally the Euro in 2002.  The question of whether Scotland can continue to use Sterling post independence is partially dependent on the goodwill of the English.  But at least they have other options.  

In general -despite the depredations of the ECB, the Euro has been good for the Irish economy, and I would not like to see a re-introduction of the Irish £.  The problem with a small open economy having its own currency is that the exchange rates can be gamed by even a medium sized hedge fund and there were wild fluctuations in its value often unrelated to economic fundamentals.  Inflation was high, and interest rates often higher. I recall paying 14% interest on my mortgage...

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Sat Jul 2nd, 2016 at 01:52:03 PM EST
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Somewhere I had gotten the idea that the EU was now requiring new applicants to join the EMU if they wanted in to the EU. Is that something they tried but found unworkable?

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sat Jul 2nd, 2016 at 04:53:41 PM EST
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Or is there the formal expectation that they will join the EMU at some time?

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sat Jul 2nd, 2016 at 05:01:29 PM EST
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All new applicants must join the Maastricht treaty without exceptions.

However, in order to actually join the Euro a member state must fulfill the Euro convergence criteria, that would be:

Consolidated version of the Treaty on the Functioning of the European Union/Title VIII: Economic and Monetary Policy - Wikisource, the free online library

  • the achievement of a high degree of price stability; this will be apparent from a rate of inflation which is close to that of, at most, the three best performing Member States in terms of price stability,

  • the sustainability of the government financial position; this will be apparent from having achieved a government budgetary position without a deficit that is excessive as determined in accordance with Article 126(6),

  • the observance of the normal fluctuation margins provided for by the exchange-rate mechanism of the European Monetary System, for at least two years, without devaluing against the euro,

  • the durability of convergence achieved by the Member State with a derogation and of its participation in the exchange-rate mechanism being reflected in the long-term interest-rate levels.

So if a state have to high debt, to high increase in debt, to high inflation or has its currency floating against the euro it is not allowed to join the euro club. Yes, this was set up in the belief that the important task would be to keep the unworthy out.

In theory the Commission could fine states for not doing enough to join, but in practise that would back-fire. So Maastricht is mandatory, but euro is in reality optional.

by fjallstrom on Mon Jul 4th, 2016 at 10:14:42 AM EST
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