A sterling currency union in the event of Scottish independence would be a “recipe for instability”, the Welsh First Minister has warned.
Carwyn Jones, the leader of the Welsh Labour Party, said he was not convinced that Alex Salmond’s preference of a shared currency if Scotland votes Yes in next year’s referendum would work from a Welsh perspective.
Mr Jones said he was “uncomfortable” with the idea, during a lecture at Edinburgh University.
He argued instability in the eurozone demonstrated the uncertainty of currency unions, and said that if Scotland kept the pound it would be “at the mercy” of monetary policy determined by the Bank of England, undermining the country’s independence.
“If one part of the currency union decides to leave, then that is a matter for them,” Mr Jones said. “But if an independent nation wants to join, then that is a matter for the people of Wales, Northern Ireland and England and as the First Minister of Wales, I would want the right to have a say.”
Mr Jones said it was “highly unlikely” that a currency union without strong fiscal controls could work.
“There would be too much uncertainty, it would slow down decision making and the risk to Wales and Northern Ireland would be far greater so it would only be right for the views of the rest of the UK to be heard.
“Given the experience of the eurozone in recent years, and the uncertainty which surrounded the various bail-outs, then I am not convinced that a shared currency would work from the Welsh perspective.
“I would be uncomfortable being part of a currency union where there are competing governments trying to run it. If there is a disagreement, who has the final say? This is a recipe for instability and these things matter, particularly in times of crisis.
“In short, our shared currency is the clearest possible example of where we are stronger by collaborating and pooling risk in a highly uncertain world.”
Mr Jones said the referendum decision was “entirely a matter for the Scottish people” but stressed that the implications would be felt far beyond its borders.
“I ask you not to forget your friends in Wales and in the wider UK,” he said. “A strong Scotland in a strong UK is a positive choice.”
SNP MSP Linda Fabiani told The Herald newspaper: “The chairman of the No campaign, Alistair Darling, described a sterling area between an independent Scotland and the rest of the UK as ‘logical’ and ‘desirable’, which indeed itis.
“And Scotland’s export strength, including North Sea oil, would be to the huge benefit of the sterling area, including Wales.”