Britain warns: no currency union with independent Scotland

British Finance Minister George Osborne Thursday warned Scotland that it would lose pound if it decides to walk away from Britain, refusing to form a currency union with Scotland.

Osborne said a currency union in the event of a vote for independence "would not be in the interests of either the people of Scotland or the remaining UK".

"I hope passionately that the people of Scotland choose to stay within our family of nations in the United Kingdom.

"I want Scotland to keep the pound and the economic security that it brings," the finance minister said in Edinburgh.

Scotland is scheduled to hold a referendum on independence on Sept. 18, and the vote will be open to about 4 million residents of over the age of 16 in the region.

In his speech, Osborne refused to share the pound with an independent Scotland.

Speaking of the independence of Scotland, Osborne said: "The stakes couldn't be higher or the choice clearer. The certainty and security of being part of the UK or the uncertainty and risk of going it alone.

"At the very heart of this choice is the pound in your pocket."

"A stable currency is the bedrock of our economy. It underpins our jobs, our mortgages, our pensions, our public services and our taxes, and the opportunities for our children and our grandchildren," he said.

He also used remarks made by Mark Carney, governor of the Bank of England, the central bank, to stress the importance to keep Scotland with Britain.

Carney is quoted as saying that people "would need to consider carefully what the economics of currency unions suggest are the necessary foundations for a durable union, particularly given the clear risks if these foundations are not in place."

The governor warned two weeks ago that the risks that could arise if an independent Scotland tried to stay in a currency union with Britain, without both nations ceding significant sovereignty not only over banking but also over spending and tax decisions.

Analysts pointed out Scotland's economy would be more exposed in the event of independence, with greater risks from shocks in the financial and energy sectors.

For currency union, they believed that Britain would be exposed too much greater risk from a separate Scotland, with the possibility of continuing British taxpayers being asked to support that state in the event of a fiscal or financial shock.