Scottish currency would be 'dangerous' - George Soros

Wednesday 12 March 2014 18.09
George Soros said Scotland could adopt the euro if it became independent of Britain
George Soros said Scotland could adopt the euro if it became independent of Britain

Billionaire financier George Soros has said it would not be practical for an independent Scotland to keep the British pound, and warned a separate currency would be "potentially dangerous" as weak currencies can be attacked.

A row over currency is heating up as Scots prepare to vote on 18 September in a referendum on whether to break away from the rest of Britain.

Nationalists wanting to share the pound in a currency union with Britain and retain the services of the Bank of England. 

But the three main British parties have united to reject that plan, telling Scotland if it leaves Britain, it leaves the pound.

Mr Soros said this made for a "very difficult relationship".

"I don't think that Scotland leaving and becoming independent and yet remaining part of sterling and (the) Bank of England is actually practical," he told a news conference in London, where he was promoting a new book on the European Union.

Mr Soros said an independent currency would be "very inefficient and potentially dangerous".

"Markets, currencies, can be attacked and you can speculate against currencies, and when you have a weak currency, positions can be taken," added the man who famously broke the Bank of England by betting against the pound during the 1992 sterling crash.

Mr Soros said an alternative would be for Scotland to seek membership of the European Central Bank and become part of the euro zone, adopting the euro as its currency.

Scottish leader Alex Salmond has insisted that an independent Scotland would keep the pound in the best interests of both sides of the border, prompting speculation that it would use sterling without a formal arrangement with London.

He argues that an independent Scotland has a right to share the assets as well as the liabilities of Britain, and that without access to the pound it may not take up its share of Britain's £1.2 trillion debt.

Several business leaders have recently expressed concerns about a vote for independence, highlighting uncertainties over the currency, tax and regulatory regimes and European Union membership.

Opinion polls have the separatists lagging with about one third support while about half of Scottish residents oppose ending a 307-year tie with England. 

But the polls have narrowed this year and up to 15% of voters remain undecided.