Saturday, 7 January 2012

An A+ for Nonsense

The honour for the providing the first Independence economic scare story of 2012 goes to the Scotsman, a seemingly infinite source of pro-Unionist tales of future doom and gloom. In its latest, and somewhat confusing anti-Independence piece by Executive Editor Bill Jamieson (Jan 4th), separation will heap more untold misery on Scotland because as an independent sovereign state, it will lose the triple ‘A’ credit rating that it presently enjoys as part of the UK.

Putting as much spin on an analysis by Jim Leaviss, a fund manager for what the Scotsman calls “the giant M&G Group”, Mr Jamieson musters up yet another scare story to frighten Scotland’s bairns.

According to Mr Leaviss, an independent Scotland would struggle to sustain a triple ‘A’ credit rating. Give Mr Leaviss his due he also suggested that the remainder of the UK would do likewise. However, as this is not what the Edinburgh based rag wants to hear it simply spins the story as yet another dire consequence of the people of Scotland taking responsibility for their own affairs.

The ‘story’ as far as this lamentable excuse for a newspaper, is that the Scots would suffer. The reason? Well as usual it is because the country is “small”. According to Mr Leaviss, “Most small economies of an equivalent size [to Scotland] do not enjoy a triple ‘A’ status”.

Now I’m sure that is true on a global scale. But as we are talking about a country in Western Europe and a member of the EU, are we to assume (as one suspects we are) that if and it’s a big ‘if’, this was to be the case, Scotland would sink without trace.

According to Standard and Poor, smaller nations in Europe with triple ‘A’ status include, along with usual suspects of Luxembourg and Liechtenstein; Austria, Denmark, Finland, Norway, Sweden and Switzerland. In fact, Guernsey and the Isle of Man both have an AA+ credit rating. And it might also be worth noting that Slovenia, with AA-, has the same rating as China and Spain.

So, is there anything to fear here, as the Scotsman would have it?

Of course not.

Plenty countries get by without a triple ‘A’ rating. Losing that rating is only a problem for those countries which, like the UK in the past, have used it to borrow like there was no tomorrow and are now in serious trouble. Sound familiar

There was a time when triple ‘A’ was a size of battery. Now however, as a one of an ever increasing bag of economic buzz phrases, Mr Jamieson thinks it is time to add it to the Unionist armoury. But, while you can make of it what you want, as with the other sticks and stones at London’s disposal its efficacy as a weapon against independence can be undermined by readily available data. 

As for “economic analysts”, one will recall that they had ample opportunity to predict the present crisis and were found wanting. Whether we should give much credence to what they say now is a matter for further conjecture.

However, it does seem that the Unionist’s fixation on “size” has yet again been shown not to matter.