The polls are open in Scotland, and voters are casting their ballots in the referendum on Scottish Independence from the United Kingdom. The 4.2 million registered voters will face a simple question, “Should Scotland be an independent country?” They will be able to answer with 'yes' or 'no.' Voting is open from 7am to 10pm, and the results will be revealed Friday morning, around 1am Eastern Time.
Current polls are showing that ‘no’ votes have a slight lead, but with a large number of undecided voters the race is far too close to call. A victory for Scotland's independence would mark the largest change to the United Kingdom since Scotland first joined in 1707. If Scotland votes ‘no’ to independence, Britain’s Prime Minister David Cameron has promised greater Scottish autonomy.
There are of course, economic consequences to voting ‘yes.’ Currency poses to be a big problem for the Scots, who planned to stay on the pound sterling before David Cameron and other British leaders made it clear they won’t be able to keep the currency.
Economists ranging from Niall Ferguson, a Glaswegian who called Scotland "Europe’s Afghanistan," to Paul Krugman, who warns that staying on the pound while severing political ties could be disastrous, agree that independence would be bad for Scotland.
“Economically,” says Yahoo Finance’s Henry Blodget, “the general consensus seems to be that it will certainly be negative in the near term.” Much of this negativism has to do with a great uncertainty—beyond the question of currency it’s unclear how the UK will divide up its assets and its 1.3 trillion pound debt with Scotland.
“Long-term, however,” says Blodget, “some people do think it can work out.” Plenty of small countries do just fine, he says. Scotland is home to the large oil reserves of the Black Sea, which made the UK 5.5 billion pounds between 2012 and 2013. If independent, Scotland hopes that it would follow in the steps of small oil-rich Northern European countries.
There are also, as Blodget points out, logistical issues regarding a potential split. “You talk about who is directing this,” he says, “it’s not like there’s some king who is going to say, ‘okay now I’ll just divide everything up and solve everything for you.’ Each country has its own political views, the leaders have to continually lead over the country because what happens in a year or two when they haven’t sorted everything out?”
“If the [yes vote wins],” says Yahoo Finance editor-in-chief Aaron Task, “there could be some major upheaval in the markets tomorrow.” A yes vote, ““would give rise to a flurry of economic questions — over oil wealth, currencies, the state of the European Union and the possible exodus of Scotland’s premier financial institutions,” Eric Lascelles, chief economist at the RBC Global Asset Management, told USA Today.
