Scottish Liberal Democrat leader Willie Rennie MSP has said that a devastating critique from Nobel Prize winning economist, Paul Krugman, of the nationalists currency plans must serve as a wakeup call to Alex Salmond.
In a piece for the New York Times today, the academic – renowned for his work on currency crises - said that the nationalists currency plans are a recipe for disaster and pointed to the experience of the Euro-zone as the example of how sharing a currency without sharing a government is very dangerous.
Commenting on Professor Krugman’s damning criticism, Mr Rennie said:
“Professor Krugman’s devastating warning over currency must serve as a wakeup call to Alex Salmond. Paul Krugman is a darling of progressive economics for a good reason. He recognizes that Alex Salmond’s independence plan to use the UK pound like Panama uses the US Dollar would leave the people of Scotland paying the price of any fiscal crisis.
“This would mean that consumers would shoulder the burden of a rise in interest rates or the brutal austerity measures which Krugman mentions were required in the case of Spain and many euro-zone countries to dig their way out of depression. That is a risk we do not need to take when we have the broader UK shoulders which can better protect our mortgages, loans and social spending.
“Alex Salmond's independence currency plans would throw our progressive agenda under the bus as we would be faced with the £6billion of cuts identified by the IFS and the calamity that would come with Alex Salmond’s currency plans.”