UK allows Scotland to Issue its Own Debt – at a Price

Britain’s government granted Scotland the power to raise debt in its own name on Wednesday, in a move aimed at showing Scots that they can enjoy some benefits of independence while remaining part of the United Kingdom.

Scotland votes in September on whether to dissolve the 307-year-old union with England, and last week British Chancellor George Osborne said an independent Scotland would be unable to keep the pound, independence campaigners’ preferred option.

Scotland’s First Minister Alex Salmond responded that this was against Britain’s own economic interests, and that an independent Scotland might refuse to take on its share of Britain’s debt if it is not part of a formal currency union.

Wednesday’s announcement allows Scotland to issue a modest 2.2 billion pounds of sterling-denominated bonds, which will not be backed by the rest of Britain, instead of borrowing money via the UK government as at present.

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