Independent Scotland’s only plan B would be the Euro says Ed Balls
With Alex Salmond evading questions on a plan B for an alternative to keeping the pound in the event of a "Yes" vote, Ed Balls has decided to outline a backup for him.
According to the shadow chancellor, the "least worst" option for a post-yes-vote Scotland would be to lobby for membership of the single currency.
Balls will say today:
It's not what I would choose for Scotland. And I am not surprised at all that Alex Salmond doesn't want to admit it now, but joining the euro would likely be his only realistic plan B.
Salmond, the charismatic Scottish First Minister, has insisted repeatedly that Scotland will keep the pound; with or without Westminster's blessing.
All three main parties have gone to lengths to make clear their blessing will not be forthcoming.
Scotland's currency options include the unilateral maintenance of the Sterling, the creation of a floated Scottish currency, a Scottish currency pegged to either the Sterling or the dollar, or applying to join the Euro.
While everyone from Osborne to Balls has said Scotland will not be allowed to keep the pound, there is relatively little politicians could do to prevent Salmond having his way. Mark Carney, the governor of the Bank of England, has indicated that the Bank would not abandon Scotland immediately in the event of a yes vote.
Fears range from capital flight south across the border to the problems Scotland would face if deprived of the Bank of England as a lender of last resort. Opinions are varied on the risks associated with each alleged issue.
Panama and Ecuador both use the dollar have stable economies, but the differences between the three economies are too great to cite the South American countries as models.
An unpegged currency would likely face uncertainty from global markets, higher interest rates and possibly a loss of trade.
Today's statement will not be the first high-stakes commentary from Balls: back in June he said he would not be able to be part of a Labour government that sanctioned Scottish use of the pound:
I could not imagine being part of the start of that negotiation, let alone the end.
Recent polls have suggested the gap between the "No" and "Yes" campaigns is narrowing, with "No" still in the lead.