An independent Scotland - govt. borrowing rates
Discussion
Morning all,
We've been having a quite heated debate over in NP&E about all things Scottish Independence.
I'd appreciate if anyone would hazard a guess at what interest a fledgling Scottish government, separate from the UK, would have to pay on its share of the UK national debt.
As I understand it:
- UK national debt (excluding public pensions) is around £1000 bn, and growing
- the UK has one of the lowest governnent borrowing rates in the world, alongside Germany and whoever else
- Scotland would have to pay a higher interest rate than the UK, since there is a lower certainty of payment
So, what would a likely rate for Scotland's debt repayments, on say 10 year bonds?
Similar to the UK at under 2%, Ireland at 5%ish, Greece above 10%? Ceterus paribus, and all that.
Basically, my current thoughts are that Scotland would basically be bankrupted with anything but a tiny percentage of the UK's total debt, and hence will not be able to become independent, and certainly would not cope with a per capita share of the UK's debt.
We've been having a quite heated debate over in NP&E about all things Scottish Independence.
I'd appreciate if anyone would hazard a guess at what interest a fledgling Scottish government, separate from the UK, would have to pay on its share of the UK national debt.
As I understand it:
- UK national debt (excluding public pensions) is around £1000 bn, and growing
- the UK has one of the lowest governnent borrowing rates in the world, alongside Germany and whoever else
- Scotland would have to pay a higher interest rate than the UK, since there is a lower certainty of payment
So, what would a likely rate for Scotland's debt repayments, on say 10 year bonds?
Similar to the UK at under 2%, Ireland at 5%ish, Greece above 10%? Ceterus paribus, and all that.
Basically, my current thoughts are that Scotland would basically be bankrupted with anything but a tiny percentage of the UK's total debt, and hence will not be able to become independent, and certainly would not cope with a per capita share of the UK's debt.
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