Scotland’s Move For Independence Is Having Severe Ramifications For Britain, Even Financially
The Scotts are getting restless. They want to break-free from the shackles of the Empire, and interestingly, their destiny might be decided as soon as coming Thursday. However, their struggle for independence is giving Britain sleepless nights for a slightly different and far more important reason; economics.
The markets have a lot be worried about lately. There’s Russia’s horseplay in eastern Ukraine. There’s continuing horrors out of the Middle East. There’s China that seems to be stuck in neutral. And last, but certainly not the least, run-of-the-mill European economic sluggishness. But one thing that is sticking out like a sore thumb for Britain is the concern that the 307-year-old Act of Union that created the United Kingdom might suddenly unravel.
Starting last Sunday, polling showed support for Scottish independence surging, making it a very real prospect that Scotland might vote for independence from the UK in a referendum next Thursday. The perceived surge in the support, and a rare opportunity that Scotland has been presented has clearly had a spillover effect in continental Europe, reigniting debate over independence in Spain’s restive Basque and Catalonian regions, and in Flanders, where some seek to separate from Belgium.
The risk, albeit small, that the configurations of these countries could be altered in the next few days seemed to reverberate in the market for government debt, which quickly sold off bonds from the countries in question, resulting in the devaluation of the respective currencies of these countries.
The Scottish independence movement has had some interesting ramifications and developments. While the Queen herself appears to have been perturbed, Prime Minister David Cameron along with many other prominent members of the parliament and dignitaries has earnestly begun to tour Scotland in a desperate bid to keep the United Kingdom, well, united.
OK, Scotland, you've had your fun. Now just quietly vote 'NO' and we'll say no more about it.
— Piers Morgan (@piersmorgan) August 8, 2014
Many in the U.K are quite confident that Scotland’s attempt will prove to be a flash in the pan, but the tiny country isn’t giving up easy. Its resilience has reverberated strongly in the financial market. Though, after a nasty kneejerk stumble on the initial news of growing support for Scottish independence, the British pound recovered some lost ground throughout the week, the Scottish independence movement has proved its might.
Interestingly, other polls conducted in the region seem to indicate that the push for independence might be losing steam. Nonetheless, the vote should make for some nail-biting and historic moments next Thursday. Moreover, if the financial markets are right, the modern-day civilized struggle for independence should have implications for countries beyond Britain, cautioned The Telegraph.
[Image Credit | The Commentator, FactSet]
