Former Greek finance minister Yanis Varoufakis reaffirms support for Scottish currency

The Marxist economist expressed agreement with Common Weal policy expert Ben Wray on social media

YANIS VAROUFAKIS, the former Greek minister of finance under the Syriza administration, has reiterated his support for an independent Scottish currency.

Varoufakis’s remarks, expressed on Twitter, followed a debate on possible currency options for an independent Scotland spurred by an article in the Herald newspaper by Common Weal head of policy Ben Wray, in which Wray argued against “sterlingisation”, or the unilateral adoption of the British pound without a formal agreement unifying the two nations’ respective institutions.

Following Wray’s assertion on Twitter that a new currency was the only “good” option for an independent Scotland, Varoufakis replied: “I think you are right. In fact, I argued the case (for a Scottish pound) in 2014”, before linking to an article in which Varoufakis argued that Scotland should decouple from sterling once independent.

In his his Herald article, Wray argued that, in the event of post-independence sterlingsation: “There is no lender of last resort facility and monetary policy would be set by the Bank of England without input from Scotland. A central bank isn’t just an afterthought. Its ability to set base interest rates and create money act as a safety valve, giving financial markets trust in the value of the national currency and, therefore, the national economy.

“Without it, a sterlingised Scotland would have to take extra measures to reassure financial markets. This would probably lead to a tightening of fiscal policy by reducing public spending or raising taxes. For supporters, this ‘discipline’ is a good thing. But it would be incompatible with the Scottish Government’s commitment to end austerity and reduce inequality.”

Writing in 2014, Varoufakis made a similar argument, arguing that a shared currency with the Bank of England would tie the Scottish economy to a system designed to benefit the City of London, which would hinder Scottish economic growth and risk insolvency.

Varoufakis also highlighted the existence of Scottish banknotes as a reason why the transition to a Scottish pound could be relatively straightforward, limiting the possibility of a run on the banks, as well as Scotland’s relatively low public debt, which could allow the new currency to be supported by an underlying financial security.

READ MORE: Alex Salmond voices support for an independent Scottish currency

In his assessment of alternative options, Varoufakis wrote: "I can think of no better 'strategy' than the SNP's commitment to sterling if its aim is to lose the referendum and to alienate those Scots who want to vote with pride for an independent Scotland that seeks a path radically different to the one England embarked upon in 1979."

In 2015, during a public conversation with the journalist Paul Mason, Varoufakis said that he would support an independent Scotland “in the context of a united Europe”. However, writing earlier in an article entitled ‘Scotland must be braver’, Varoufakis wrote: "A 'minimalist' Independence, of the sort proposed by the Scottish government's White Paper, will fail either to inspire the Scottish people to vote in favour of Independence or to deliver genuine independence if the referendum is won. Scotland must bite the bullet and fearlessly seek to establish its own currency."

The Scottish Government’s Growth Commission, which is expected to present its findings within the next few weeks, is reportedly assessing the viability of an independent currency, but is widely expected to propose some form of sterlingisation – possibly as a temporary measure – in the event of independence.

Picture courtesy of EU Council Eurozone

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Wed, 02/14/2018 - 15:01

Let me say this to Mr Wray.... if Peter A bell is disagreeing with him on currency matters, then he is on the right track.


Wed, 02/14/2018 - 15:06

If you want to know what Marxist economists know about the real world, visit Venezuela.

I agree that an independent currency is the only "good" option for independent Scotland. However, it is going to be mind-blowingly expensive, and paying for it will permanently lower the quality of life for the first and possibly second generation after independence.

The only genuinely good currency arrangement for Scotland is the one we have now. The majority of Scots understand that, which is why there is no interest in going through all this again. According to a very recent YouGov poll, support for IndyRef 2 in the next 5 years is below 40%.

Scott Egner

Wed, 02/14/2018 - 15:56

Of course £1 trillion public funding of a ponzi financial sector is cheap, not to mention looming decades of uk austerity

Patrick Chalmers's picture

Patrick Chalmers

Wed, 02/14/2018 - 16:35

It's also worth looking at the work done by Positive Money to reveal how private banks create money by issuing debt. This has a massively destabilising effect on financial flows and loses potential revenue to the society whose currency the banks are lending in. Via this link -

Alan Bissett

Wed, 02/14/2018 - 17:20

Opposition for a second indyref doesn't equate to opposition to indy. The latter has remained between 43-48% since 2014, even when the former is below that. This suggests that even the people that don't want to go through it again will still put themselves through it again and that the final result won't correlate to the figure you quote.

Case in point: how many people wanted a General Election in 2017? How many people voted in it? I'll bet you those figures don't match.


Wed, 02/14/2018 - 18:22

General elections and referendums are two different things. We repeat GEs because that is what is needed to hold our elected representatives accountable. Referendums, on the other hand, are meant to be rarities. We all voted in 2014 with the understanding that we were settling the matter for a generation.

The people of Scotland don't want to go through it again, and they haven't changed their minds. And why would they? You are still as unable to answer to most basic questions about the nature of the post-independence economy as you were before; but now we have five years of proof that "plan" you were peddling then would have resulted in catastrophe.

Alan Bissett

Wed, 02/14/2018 - 23:39

Aye mate, the No vote has worked out fine and dandy for Scotland. That's just what the Tories' Brexit impact report says. What planet you on?

We all voted in 2014 on the understanding that we'd be remaining in the EU and that we'd soon be 'as close to federalism as possible'. If enough Scots had been satisfied with the post-2014 settlement then Yes wouldn't be within touching distance of a majority four years later.


Thu, 02/15/2018 - 05:33

Maurice is of course - and as usual - using massive hyperbole, and being highly misleading.

First of all, the "catastrophe" he speaks of with regard to the plan for Scottish independence is based on GERS figures, which the more informed of us recognise is 1) a statement of of Scotland's financial standing within the UK, as a region, and not as a country in its own right (do compare Scotland's standing with other rUK regions - it's hardly a stand out) and 2) based on data that is riddled with estimates and apportionments, and where the UK controls (has reserved) Scotland's most profitable assets.

There is no doubt (including in the minds of unbiased economists) that Scotland could be a viable independent country. It was said so numerous times when asked of people during the referendum (even by some nay sayers), so as ever, it comes down to how good a plan the politicians come up with, having a media that reports the arguments fairly and responsibly (IKR) and who gets voted into the Scottish Parliament to implement it.

Indeed, the politicians sometimes even admitted that Scotland could be viable on its own. And here is where Maurice always comes unstuck - he can't name any country that has gone independent and failed. It is a total nonsense to claim that a) Scotland would fail or that b) it's too expensive, because they're always using GERS as a standard to compare it to.

The argument is the wrong one, and the only reason Unionists use it is because they think they can keep conning you with it.

The real financial argument is whether Scotland would be better off. And it increasingly looks like it would be, if it extricates itself from the UK, and takes a different path.

What we can say, with the benefit of hindsight, is that the plan for independence could have been better, but it was certainly viable. Whilst Salmond and those around him at the time went for the currency option that would have been easiest to implement, and what he probably thought would be the easier thing to 'sell', it back fired. They didn't see (as most reasonable people wouldn't) that the other side could just say, 'we won't co-operate with that', and make a big deal of saying so, even though it was a bluff. Most people couldn't see that it was a bluff, taking the argument at face value, when the UK would have had no choice but to co-operate with such, because, as Mundell likes to ignore with his references to a 'single UK market', this all works in both directions. Will the UK Gov really sacrifice the rUK business that goes TO Scotland via this not really existing single market? Funny how the threats to Scottish incomes over separation ignores 1) rUK incomes, and 2) what would be the actual cause of that - which would be a UK Government imposing a border and tariffs, which no one wants.

It is also instructive to note how much Ireland used to depend on the UK for exports, and how it looks to the EU now.

"In 1960, 75 per cent of Irish exports went to the UK. In 1972, the last year before we joined the EEC, the proportion was still 61 per cent. Now, just 18 per cent of Irish service exports and 14 per cent of Irish goods exports are to the UK. Conversely, Ireland’s economic links to continental Europe were astonishingly weak. In 1971, our total exports to the EEC’s six member states amounted to just £23 million. Just 10 years later, Irish exports to EEC countries other than the UK stood at £968 million." - Fintan O'Toole in The Irish Times.

So, threats to an independent Scottish economy about losing its 'single UK market' are a nonsense, because a) the UK Government would be cutting of its nose to spite its face by implementing any such border controls and b) Scotland could do better anyway by exporting to the EU, just as The Irish have.

And this is why the UKGov is in such a mess over Brexit, and with Ireland in particular. It can't really do what it's buffoon-ridden donors wants in Ireland, because it knows that that the EU wouldn't have it and will scupper any deal, screwing the entire UK completely, with a veto, which would be curtains for a Tory Government. And we now know what a no-deal scenario will do to the economy, but the Tories are basically lying to all sides in order to scramble for time to try and come up with a solution, or hope one presents itself. But when the UK Government usually has the time and resources to play for time and win a war of attrition against its opponents, with the EU it is up against something much bigger and also against a ticking clock. And it is getting increasingly desperate, as Boris's plea demonstrates.

But the more you see of the UK voting Tory when Scotland doesn't, of going in political directions that Scots do not want to go, then the argument isn't entirely about finance anyway, but how Scotland wants to be as a country, and then how it uses its money and tax powers. And the simple fact is that Scotland, having gained independence, could do what it likes - or more to the point, what Scotland WANTS - and with all of its own resources.

Scotland could introduce a basic income, a land value tax, and probably solve any financial issues right there, whilst the UK happily throws 6% of the unemployed into penury by cutting off their income arbitrarily, for the most pathetic of excuses, and sometimes without even informing people of the hoop that that they were supposed to jump through. That's feudalism. That's what Conservatism is all about. Keeping the poor in check by starving and killing off a few of them if they 'don't behave'.

Poverty costs the UK £78 billion a year (JRF). Per capita that's about £6.63 billion for Scotland. How much money would a basic income save Scotland in prevention costs alone? How much better off would unpaid carers be (such as stay at home parents, as well as those looking after relatives or others), as well as the people they care for? The list goes on...

This is the sort of thing that Scotland can do differently, because Westminster won't, because those really in control of the likes of Boris Johnson, won't allow it.

When was the last time Scotland voted for the Government it wanted at Westminster (A: 2005) - and how often in the last 50 years? (A: 5 in 13).

1970 No
1974 Yes x2
1979 No
1983 No
1987 No
1992 No
1997 Yes
2001 Yes
2005 Yes
2010 No
2015 No
2017 No

Given Scottish Labour's collapse, and the ongoing state of the Sottish Tories, there is no short-term prospect (at least) of a majority of Scots voting for the UK Government it wants. Divergence has occurred. Scots want a Scottish Government and a Scottish Government that represents Scotland.

England is simply not going to vote in a left wing Government, especially one that despite all the evidence, is still willing to go ahead with Brexit on a referendum so badly run and so full of media manipulation and nonsense from its right wing owners, that common sense went out the window.

England only voted for Tony because he wasn't really left wing. In truth, the UK hasn't had a left wing Government since the 1970s, if not the 1960s, because after all, once they get in, Labour Governments end up being a hegemony with the autocrats that really run the UK, who put up the likes of Boris the buffoon as their political front. I mean really, does anyone believe that this fool is a competent politician? But he keeps coming back, doesn't he. The reason is obvious. He has the backing of powerful people who want him as their front, in a place of power, and for whom he will do their bidding. No other competent organisation would employ Boris the buffoon, unless of course Boris's buffoonery is what you actually want.

He talks about Brussels rule as if the UK isn't a part of it. This is because the people he really speaks for aren't getting what they want from Brussels. The only danger or catastrophe from not going through with Brexit will be to his career as a politician - oh wait that's a contradiction in terms. Silly me.

And any Brexit is bad. I've argued it from the start, as a matter of straight-forward common sense. You can't leave the EU with the benefits of being in the EU. That's the absurdity that the Brexit campaign has pushed for.

But why? Why argue for what seems to be the fiscally absurd? Again, apply common sense. They argue this because it sounds better than the truth, which would be intolerable to the voters.

The truth is that only the rich will benefit from Brexit, because they have enough money to not be seriously or adversely affected in the same way as the rest of us - but because they also have the power now to change laws agreed within the EU about the safety and protection of people at work, and thereby cut costs and actually improve their profits. Brexit will be a bonfire of EU legislation that does this. This is the "red-tape" they talk about getting rid of.

As Saatchi and Saatchi happily admit, the Tories will get any useful idiot to vote for this, on the basis that one day, you too can be a psycopathic company boss that screws over other people to make more bucks for yourself. It's called aspiration. Don't you want to aspire? Fool. Even if you did get there (and not many of us do), is that the kind of boss and person you really want to be? A Michelle Mone clone?

Some have additionally argued that Scotland would have been too tied to the UK financially to be able to properly run Scotland's affairs independently. I think in the short-term there would have been at least some truth to this, but was probably considered a way to gradually extricate Scotland from rUK, rather than go the whole hog all at once. How many times have we seen ScotGov take some concessions for greater autonomy and go back later for more, on the basis that 'this doesn't work well enough on its own'? I can see that this was probably the underlying plan with Indy. To partially extricate in the short-term and fully extricate in the long-term, thereby making the change as smooth and as painless as possible.

The trouble is that you get these fudges in the interim, as we have had with income tax and not being able to change rates without something else being adjusted to 'compensate'.

But the Scottish Government misjudged the willingness of the UK Government to promote a plan of self-harm, and use the main stream media to con Scots into believing that only Scots would suffer from Westminster installing a border between England and Scotland, when the truth is that no one wants it, as is the case in Ireland. And whilst Maurice claims that we now know that Indy would have been a "catastrophe", he conveniently forgets the lies we were told and the promises that were made to Scots if they voted no - and all of which have gone by the wayside - leading to the catastrophe that Brexit will be.

It is no longer a matter of if brexit will be a catastrophe, but a matter of scale. What price a yes vote now?

These are not mistakes that are likely to be repeated, but we must face-down the main stream media and unionist politicians when they will inevitably repeat these fallacies in order to con those who are not so politically aware.

GERS: Of course the GERS figures have been manipulated - not by falsehood, but by actions designed to make them look worse. Oil is the classic example, where the UK Government's zero-rating of PRT not only massively affected the GERS figures in the short-term, when they were already being affected by oil prices, but also for years to come, as it effectively becomes nothing but a tax relief. In 2015/16, the effect of this meant a £562 million tax refund, virtually wiping out all the income from oil in that financial year.

And to demonstrate the ongoing effect, in 2017, this figure was £649 Million. Funnily enough, the income generated by North Sea revenue rose for the first time in years, but because the UKGov is still giving away PRT, the figures still look much worse than they might.

Oil and Gas companies will only be able to offset their revenues with PRT paid, as a tax relief, for so long, but in the meantime, the picture of North Sea Revenue looks far worse than it should.

The UK Gov will take the hit in the short time, to protect its long-term interests. But then, hey-ho, it's a Tory gov, and they love cutting taxes anyway, especially for big business (and oil & gas is still big business), regardless of whether it is prudent or not.

Once again, the supposed argument against independence, is really an argument for Scotland taking control and doing a better job with maximising the income from its own resources.

And of course, Maurice laps up the end figures, without a critical eye over how they come to be, or how they could (and should) be different - or that the standards of exactitude, estimates and apportionments applied would go out the window when Scotland is independent. We'd have the actual income from oil and gas, the actual income from whisky and the actual spending on e.g. defence.

Because, as ever, Maurice's arguments are cherry-picked and entirely on his terms, and based on how the UK does things, as opposed to how Scotland could do things. And because, Scotland is a 'special case', and examples of other countries becoming independent are therefore meaningless, as far as he is concerned.


Thu, 02/15/2018 - 12:40

it's a long long long post, and too long for me to dissect line by line (at work) so I'll just ask two questions:
What "actual income" and how much more "actual income" would we get from whisky if we were independent?
What "actual spending" savings would we make on defence?

John Stuart Wilson

Thu, 02/15/2018 - 13:13


GERS from ~2010-2012 was the basis of the White Paper, so it is a bit rich of you to say we should stop looking at the later editions.

John Stuart Wilson

Thu, 02/15/2018 - 13:12

[deleted duplicate]


Thu, 02/15/2018 - 14:08

And while you are at it, pray tell what these "the UK controls (has reserved) Scotland's most profitable assets." please.
Also this : "..when the UK would have had no choice but to co-operate with such, ..." Nonsense, utter nonsense. There was zero upside for rUK to enter into a currency union, and a big downside, and for anyone to think that there would have been "no choice", well, that beggars belief.
I shan't expect a reply.

Charlie Collins

Thu, 02/15/2018 - 15:22

geacher: it's a long long long post..............
Pure semantics. The point is that an independent Scotland would have full control of whisky revenue. I don't believe that anyone claimed we would have extra income from whisky although, an independent Scottish Government could, if it so wished, take appropriate measures to try and increase the sales of whisky.
An independent Scotland would have different defence priorities. Different priorities mean different budgeting. Lower priorities mean lower spending. Would Scotland want to spend on air craft carriers which have no actual aircraft on board for example? Or, would Scotland be interested in spending on ships to sail the globe blasting out Rule Britannia as they go? (what's wrong with that I hear you think)

Charlie Collins

Thu, 02/15/2018 - 15:36

geacher: And while you are at it.....................I shan't expect a reply.
Nor do you deserve one.


Thu, 02/15/2018 - 16:04

@Charlie. So we would be in full control of whisky revenue which in your opinion would just remain the same, so what is the point? And there is nothing, zero, zilch nada to stop the current SG taking appropriate measures to increase sales right now.
re defence: we may not want to have aircraft carriers, yep true, but we would need to fork out (for example) some form of apparatus to safeguard our airspace and seas from intrusion from foreign powers... we would lose that capability on independence. We would need officer training centres for our Armed Forces.... we would lose that capability on independence. We would have to establish from scratch an anti terrorism unit, that is another capability we would lose on independence.
These are just three "savings" we would make.... there are many more.


Thu, 02/15/2018 - 17:40

@ geacher, you know damn well we don't know yet - but the point I was making is that GERS is estimated, and these figures won't be - whatever story they tell.


Thu, 02/15/2018 - 17:46

@ John Stuart Wilson, Hardly. Aside from there being no alternative to GERS, the major failing of the 2014 campaign was right there in failing to extrapolate the data from GERS so that it better demonstrated what an Indy Scotland would look like - bearing in mind that so much needed to be negotiated in a separation deal, with regard to resources and share of the UK debt. Mind you that doesn't stop Unionists from complaining that there isn't enough detail, when at least some of them know (whilst some are ignorant) that this simply cannot be done prior to such negotiations.


Thu, 02/15/2018 - 17:53

@geacher Your assertions about the armed forces are not facts but opinions. These kind of resources are exactly the sorts of things that should be part of the negotiations - seeing as Scotland is charged for defence. Therefore, Scotland should get its share of such resources.


Thu, 02/15/2018 - 17:59

@geacher, Don't you know what is reserved to the UK? You're ignorance of the matter does kind of undermine pretty much any argument you are making.

As for currency union, of course the UK would have had to co-operate with the currency Union because a) Edinburgh agreement and respecting the referendum result and b) to protect and maintain cross border business on the UK side of the border.

Or do you think there is no business going into Scotland from rUK? You must be one of those Unionists who think borders operate in one direction only. Are you David Mundell in disguise?


Thu, 02/15/2018 - 18:12

"And there is nothing, zero, zilch nada to stop the current SG taking appropriate measures to increase sales right now."

Actually there is - but then you've already demonstrated that you don't know what is reserved and what isn't.

John Stuart Wilson

Thu, 02/15/2018 - 18:33

@Charlie Collins

I was not aware that the separatist movement was planning to nationalise the whisky industry. However, I'm not surprised: if wasn't for bad ideas, it would have no ideas at all.

John Stuart Wilson

Thu, 02/15/2018 - 20:15

"As for currency union, of course the UK would have had to co-operate with the currency Union because a) Edinburgh agreement and respecting the referendum result and b) to protect and maintain cross border business on the UK side of the border."

The idea that Alex Salmond would force the rUK into a currency union against its will was always ludicrous. It offered nothing but downside risk for rUK. The only upside - the cross-border trade you mention - was something that the rUK would get for free just by saying "No" and forcing Salmond to endorse sterlingisation instead, which was the only other option open to him.

For you to go on and say that the Edinburgh agreement somehow required the rUK to agree to Salmond's ridiculous plan is taking barrel scraping to a whole new level.

The Edinburgh agreement required both sides to respect the outcome. It didn't require that the rUK then refrain from the pursuit of its own self-interests vis a vis that of Scotland as a foreign country, whilst Scotland did nothing but vis a vis the rUK as a foreign country.

John Stuart Wilson

Thu, 02/15/2018 - 18:43

"the point I was making is that GERS is estimated"
Then you are making no point at all. See here:


Thu, 02/15/2018 - 19:07


"Because, as ever, Maurice's arguments are cherry-picked and entirely on his terms, and based on how the UK does things, as opposed to how Scotland could do things."
My arguments are based on economics and facts. You like to say "Scotland could do things differently". I certainly agree that this is true. However, that observation doesn't close off discussion about the post-independence economy.


Thu, 02/15/2018 - 19:10

@radio All accounts have a degree of estimation... this idea that estimation = detrimental to Scotland is a fallacy. The SG economists have the right to, and do scrutinise all figures which originate from WM, and if they are unsure, they can ask for verifiable proof and thay also have the right to question anything they don't agree with, eg the allocation of the cost decommissioning of Dounreay.
That is why the SG take "full responsibility" for gers.
As SANP supporting political economist John McLaren said last September (and I paraphrase) "What is the point in spending millions of pounds more to confirm what we already know now?"


Thu, 02/15/2018 - 19:14

@Radio. As an ex employee of MOD, I talk fact. Sandhurst, Dartmouth, Cranwell are all in England, as is RAF Boulmer, as is the UK anti terrorism unit.
They are all UK establishments.
"Therefore, Scotland should get its share of such resources."
We gonna get wee bits of England in our negotiations? I think not.


Thu, 02/15/2018 - 19:17

@radio OK, what prevents the SNP run ScotGov supporting the sales of whisky? Well Wee Nippy was on just the other day claiming kudos for whisky exports being up.


Thu, 02/15/2018 - 19:28

Mark Carney, Gov of BoE, 2014: "insisted a currency union with a sovereign, independent Scotland was impossible. “You only have to look across the Continent to look at what happens… A currency union is incompatible with sovereignty.”
Alistair darling, former Chancellor: "a currency union is not compatible with sovereignty. It would mean what would then be a foreign country having control over our economy. That's why a currency union would be bad for Scotland, as well as the rest of the UK.
George Osbourne, then chancellor: "I would not consider sharing the pound."
Simply put, if Scotland ran up a budget deficit as we certainly would for many years, it may struggle to get investors to buy bonds; this could lead to higher bond yields and pressure to pursue austerity. Scotland would be relying on the Bank of England to provide liquidity. But, the Bank of England may be reluctant to provide liquidity for a neighbouring country – unless there were agreements over fiscal union and budget limits.
So....... Did Uk have to share the £sterling
Were they bluffing?

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