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Friday, 28 October 04:21 (GMT -05:00)

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Separatism in Scotland: Threat or Panacea for the United Kingdom?

Investment news, Great Britain. Europe has introduced a number of surprises, not all of them being pleasant for investors. First of all, there has been a powerful debt crisis, which has resulted into the most large-scale problems ever faced by euro zone.

It is now added by rather serious talks about separatism and possible dissolution of certain members of European Union, including those that are at the top of global economy. This primarily concerns Great Britain, which has been struck by the information announced at the very beginning of 2012.

Scotland threatens to separate

As explained by Canadian experts of Masterforex-V Trading Academy Evgeny Olkhovski, the leader of Scottish National Party Alex Salmond has announced about his intension to call a referendum devoted to separation of the country from the United Kingdom in autumn 2014. Preliminary predictions claimed that the referendum may be held during the period of 2014-2016:
in case of positive outcome for Scottish, the process of separation will start; it is supposed to finish only in 10 years;
options. As claimed by nationalists, current ruling power in Scotland , at the referendum voters will be suggested to choose one of three options: maintenance of Scotland as a part of Great Britain, complete independence, or extended autonomy as a part of the United Kingdom. The final option presupposes that municipalities will deal with taxes, but army and foreign economy will remain common with Great Britain. In case of complete independence Scottish National Party would like to create the country’s own army and withdrawal of British nuclear power from the territory of Scotland ;
uncertainty does damage. Anyway, this is the official opinion of London. “Long period of waiting for the referendum does big damage to Scotland , as business fails to understand the perspectives: will Great Britain remain united. Therefore, I suppose that Scottish people are to be asked about certain actions as soon as possible,”, recently said British Prime Minister James Cameron. “If Alex Salmond wants a referendum, why to wait till 2014?... In my opinion, this is unfair in relation to Scottish, who don’t have a clear understanding of when the referendum is going to be held, what the key point of it is, and who is responsible for it,” he added.

What is the goal of England?

The official position of London may seem rather weird at first glance: why aren’t Englishmen afraid of referendum in Scotland and are even trying to speed it up. Why do they need to speed up the dissolution of their own country? There are several explanations.
1. The legal procedures that are necessary for possible separation of Scotland from Great Britain have not been prepared yet. Therefore, if the outcome of referendum in Scotland is negative for London, long bureaucratic red-tape may be started. It will eventually get struck at some legal point and will bring to naught all achievements of the nationalists. Moreover, it is not known for sure whether the outcome of the referendum will be obligatory or recommended.
2. Separation conditions. London may set as one of the major conditions to accept the referendum the requirement to exclude the option of extended autonomy from the list. Scottish will than have to make a difficult choice between complete independence and maintaining the current status.
3. Supporting independence. Last but not least, Englishmen are perfectly aware of the fact that at present the idea of independence is not supported by the majority of Scottish population. In other words, nationalists will fail to collect the desired 50%+1 of votes. Therefore, it is better for London to speed up the procedure of voting. If the idea of independence of Scotland fails to be supported, the question will be closed for a very long time. However, if the referendum will result in separation of northern autonomy, this may become a sad precedence that may later be followed by similar actions in other parts of the United Kingdom – Wales and Northern Ireland.

What is the goal of Scottish National Party?

Having the majority in the parliament of autonomy, nationalists perfectly understand the motive of their opponents and don’t want to go on a leash of Englishmen. “Scotland is against being forced to anything. And they (British government) are trying to make the referendum be held in a rush…No politician, especially from London, should decide on the future of Scotland . Scotland will become an independent country of European Community and will be on friendly and good-neighbourly terms with its partners on the isles,” stated the head of Scottish government Alex Salmond in his interview to ВВС.

But are fighters for independence slow to hold such long waited for poll? They also have their own reasoning.
1. They want to use the time that is left for large-scale propaganda campaign focusing on “everlasting strive for independence” and “heavy enslavement by Britain”. Books will be published, films of “Brave Heart” type will be shot, authorities like Sean Connery involved, etc.
2. In 2014 Commonwealth Games will be held in Glasgow. The same year 700th anniversary of the defeat of the army of King Edward II by the Scottish at Bannockburn. Nationalists are hoping to raise the patriotic spirit in such a way.
3. There will be enough time to discuss all legal nuances and discuss the procedure of holding the referendum with London powers. If everything is done by the letter of the law, Downing Street will have to come to terms with the defeat.
4. Scottish National Party is hoping to win the permission for the citizens who have reached 16 to take part in the vote. Scottish nationalists, as well as their colleagues around the world, are counting on youth that is more apt to take radical decisions than others.

How did the question of Scottish separation arise? In 1707 England and Scotland joined to form a united kingdom. In 1990 Scotland restored its own parliament. At present Scotland is entitled to take independent decisions concerning medical care, education, transport, and justice. The party that wins at local elections is entitled to form its own government and, consequently, choose a Prime Minister. Scottish National Party became the winner during the last elections and raised the question of holding a referendum.

What will happen to Scotland if it separates from the United Kingdom?

Rich Scotland is better than poor Britain!” was the slogan of Scottish National Party, with which it entered elections to the parliament and won. They are expecting to receive super profits from the sale of oil and gas, the largest deposits of which are within national waters of Scotland . It is due to the resources of the Northern Sea that brings confidence to the nationalists that their country and become independent from economic point of view.

Englishmen oppose the idea of independence in Scotland with a firm argument: at the present time of globalization and financial crisis only the largest economies will survive; consequently, any separation may lead to dissolution. In addition to appealing to reason, London resorts to clear threats:
warning. Thus, British Chancellor of the Exchequer George Osborne has warned Scottish separatists that if Scotland separates from Great Britain it will not be allowed to use pound sterling a its national currency. Moreover, he has unoptimistic thoughts about the perspectives of Scottish economy, “I don’t think that Scotland will be as prosperous as it is as a part of Great Britain. The mere talks about its independence do harm to Scottish economy, as international companies are concerned about investments”;
response to threats. The hidden threats of George Osborne have been firmly objected by Scottish Premier Alex Salmond, who supports separatism. The Premier claimed that in case of gaining independence, his country may enter euro zone. This statement has done more harm than good to fighting for the independence, which means that Alex Salmond has unwillingly played into the hands of Englishmen. The point is that the majority of Scottish, as well as other citizens of the United Kingdom, are very skeptical about euro zone and do not bother to hide their sarcasm when looking at the present agony. Consequently, the leader‘s statement made about joining the monetary union in future is more likely to make an average Scottish to refuse from independence than support it.

Market reaction or what may happen to the pound rate?

According to the analysts of DFWA Department within Masterforex-V Academy, British currency has set maximal price at the point of $1.5536. Resistance to pound rate is at the point of $1.5545/50. Testing of this point will make it clear if the price will keep rising up to the point of $1.5580. Pound has set new maximal points against euro.

Technically, a strong rising reversal impulse if formed, and the price is at the point of resistance to strong average point, a down bounce is most likely to happen due to such position:





“Market Leader” and Masterforex-V Trading Academy are holding a questionnaire in Forex forum for traders and investors: in your opinion, in the present situation separating a certain region from a larger country will:
· work for the benefit of the region’s economy;
· will do harm to the region’s economy;

· this depends on the region and on the country.


You are free to discuss this article here:   forum for traders and investors


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