Treasury written question – answered at on 7 January 2014.
To ask the Chancellor of the Exchequer what veto powers the Welsh Government have in respect of which territorial entities are able to use sterling.
No territorial entity has the right to insist that the UK enters into a currency union with it. It is up to the United Kingdom, to decide whether or not to form a currency union with other territorial entities, including any part of the UK that becomes independent. Currency unions do not work without close political and fiscal integration: the lesson of the eurozone crisis is that clear-currency unions are very difficult without fiscal or political integration, and can expose all their members to significant risks.
Any territorial entity could unilaterally adopt sterling in the same way that Montenegro uses the euro and Panama uses the US dollar. But they would then have no control over the currency and its monetary policy, and no central bank to act as lender of last resort and to protect individuals' savings and mortgages.
Yes2 people think so
No1 person thinks not
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