It isn’t often that a nation votes on a referendum to break from a larger country or to form a new one. It’s even less often that this country is part of the United Kingdom, especially when the U.K. has existed for over 300 years.
The Scottish people will vote in a referendum today, Sept. 18 for independence from Great Britain in order to form their own country.
If the outcome leads to Scotland as an independent nation, leading experts and academics expect a short-term financial hit for both Scotland and England.
Academic opinions estimate that, conservatively, administrative costs for the new country will reach £200 million pounds. These costs include the creation of a new tax system, defense system and more. Other opinions estimate up to £2.4 billion in administrative costs alone.
Scotland would also need to settle on which currency they’d use. Those in favor of Scotland’s independence say that Scotland would continue to use British pounds. But, England has stated that Scotland would not officially be allowed to do so.
While switching to the Euro is an option, it would take time, something that the Scottish people may not be able to provide immediately out of a need for a currency.
Additional debates question Scotland’s share of the United Kingdom’s debt, which is estimated at £100 billion. Not only would Scotland immediately inherit a large debt, but experts have raised the question if foreign lenders would even be willing to assist such a new country.
There would also be costs and actions taken in regards to banking. The Royal Bank of Scotland and Lloyds Banking Group, two of the United Kingdom’s largest banks, have already said that if the referendum favored independence, they would transfer their bases to England.
While this transition of bases would not change job opportunities or banking operations in Scotland, there would be a void for the Scottish people lacking a Scottish bank to back financial institutions.
These potential problems may only be short-term in nature, but the amount of risks associated with breaking from the United Kingdom has been pushed through the media as Great Britain’s Parliament prepares for a possible break.
Editor’s Note: Information from CNN, New York Times and The Telegraph were used in this article.