Scotland’s Hamlet Moment:

To Leave or Not to Leave? That is the Question

by Adolfo Laurenti, Chief International Economist for Mesirow Financial


September 16, 2014 7:39am EST – CHICAGO–(BUSINESS WIRE)–In this week’s edition of Themes on Global Markets, Mesirow Financial’s Chief International Economist takes a close look at how a vote in Scotland this week could upset major industries in Britain, including oil & gas, financial services and health care. It’s a binding referendum that would require negotiations to parcel out shares of valuable assets and, less popularly, liabilities such as the existing national debt. As Adolfo Laurenti explains, leaders of this push for independence are calling for a U-turn in economic philosophy. “The vote for independence is not just a matter of devolution but a wholesale rejection of the market-oriented policies that London has pursued since the days of former Prime Minister Margaret Thatcher.”

Will promises be broken?

Look for election promises to being broken if the “yes” for independence party wins. The promise that a Scotland outside the UK could keep the British pound: The Bank of England Governor has said that would require Scotland to build up billions in reserves, which could divert funds away from expanding social programs. The promise to retain trade benefits of European Union membership: Not so fast; the European Commission President is on record saying that EU treaties would no longer apply to a newly independent state. Laurenti concludes that, “As tough as divorce always is, it may be insurmountably so for a union that has lasted since 1707.”

As tough as divorce always is, it may be insurmountably so for a union that has lasted since 1707

For more on the economic impact of the proposed breakup of the United Kingdom of Great Britain read the latest Themes on the Global Markets newsletter. The September 2014 issue of Themes on the Global Markets, as well as archived issues, can be found at

Excerps from Scotland’s Hamlet Moment…:

  • Known Unknown: Scottish Referendum
    – Part of the challenge of undersdtanding the economic ramifications of a secession vote is to fully assess the role of Scotland in the British economy. Scotland accounts for 8% of the United Kingdom’s total population; this may be one metric to guide the negotiations about how to devide and share assets after a split, as well as the burden of the existing UK government debt.
    – The flip side is that in a hypothetical, independent Scotland the costs of government would be higher.
  • Unionist View
    -Concerns about  a breakdown in the union are palable, however, especially in assessing how viable Scotland would be on its own.
    – Furthermore, it is far from clear how much oil is left in the North Sea

Read the entire white paper, Scotland’s Hamlet moment: To leave or not leave… that is the question, here.



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