Scotland’s Independence may Cause Economic Downturn

September 12, 2014

Unlocking Word Meanings

Read the following words/expressions found in today’s article. 

1. asset /ˈæs ɛt/ (n.) – a property owned by an individual or institution
Example: The company sold all its assets after filing bankruptcy.

2. plea /pli/ (n.) – an appeal or request usually made in an emotional manner
Example: The organization made a plea to the government to support their charitable activities.

3. meltdown /ˈmɛltˌdaʊn/ (n.) – refers to a fall or a breakdown of something
Example: The economic meltdown forced the country to borrow money from wealthy nations.

4. sector /ˈsɛk tər/ (n.) – an area or aspect that serves a distinct function
Example: The government’s new policy will greatly affect the business sector.

5. referendum /ˌrɛf əˈrɛn dəm/ (n.) – a vote asking qualified voters to agree or disagree with a specific issue
Example: The results of the referendum will be announced on national television.


Read the text below.
According to a study published by The Banker magazine, Scotland’s plea for independence may impose risks to its economy.

The study found that Scotland’s banking assets will be 12 times greater than its gross domestic product (GDP). This, according to experts, can cause financial crisis in Scotland should it separate from the rest of the United Kingdom (UK).

According to the study, the combined assets of The Royal Bank of Scotland, HBOS, and Clydesdale amount to $2.6 trillion as opposed to Scotland’s GDP of $219 billion. The UK, on the other hand, has $9.9 trillion banking assets, about four times the size of its GDP.

Iceland’s assets were 10 times its GDP when it faced economic meltdown. Scotland could have been in the same scenario had it become independent during the financial downturn, said the Banker editor Brian Caplen. He added that Scotland would, no doubt, be forced to seek help from the International Monetary Fund (IMF). 

The IMF was a great aid in saving the economy of small countries, including Iceland and Ireland, especially during the 2007-2008 financial crisis.

In defense, a government spokesperson in Scotland stated that the figures released were outdated and do not apply to the actual situation of Scotland’s financial sector. He also added that the analysis of the study was wrong when it included bank investments in London and failed to mention the reforms done in Scotland’s banking sector since the crisis.

Scotland’s independence will be determined by means of a referendum. Scotland voters will be asked whether or not they want the nation to become separated from the UK.

Viewpoint Discussion

Enjoy a discussion with your tutor.  

Discussion A

·         In your opinion should Scotland still aim for independence despite threats to its economy? Why or why not?
·         How do you think Scotland can strengthen its economy?

Discussion B

·         What is the importance of being an independent country? Please explain.
·         What can people do to help the government during a financial crisis?

September 12, 2014