THE think tank Common Weal is to launch a campaign for a Scottish currency post-independence.

It has unveiled the move after criticising a recommendation made in the SNP’s Growth Commission report that the new state continue using the pound, though not in a formal currency union, until various economic tests have been met.

Writing in The National today, Common Weal director Robin McAlpine says the commission’s option would mean the newly independent country would not have control over how money is managed and would mean limits on fiscal policy, how tax was raised and public-services spending.

“Both Iceland and Greece have faced enormous financial and economic crises in recent times,” he says. “Iceland recovered quickly and its biggest problem is now that some parts of its economy are actually growing too fast. Greece is stuck in a downwards spiral.”

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“So what is the difference between these two crises? Well the most fundamental difference was that tiny Iceland ... had its own currency and a central bank. It could use the full range of economic powers including monetary powers ... and fiscal powers ... to defend its economy.”

He says that Greece, by contrast, “had no control over its monetary policy and effectively no control over its fiscal policy. So instead of defending itself from the crisis it was forced to do exactly what foreign bankers told it to do.”

The currency issue is being debated again as the proposal in 2014 – to use the pound in a currency union with the UK – is seen as a weakness after Chancellor George Osborne rejected it.

The Growth Commission report underlined the precedent of Ireland, which continued to use the pound after it became independent, before adopting its own currency. Commission chair Andrew Wilson believes the report’s option is most likely to persuade those whose hearts said “Yes” but whose heads said “No” because of fears over currency and the economy.