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The British And Its Impact On The Scottish Economy

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The recent Scottish referendum played a pivotal role in the Scottish economy, while many people believed the 300-year old union is no longer fit for purpose and is holding Scotland back others believed that Scotland cannot thrive without the UK and the economic and social problems caused by Independence would be disastrous. In this essay I will explore Scotland’s position in Europe and how whether obtaining independence would have been an advantage or disadvantage to Scotland. Traditionally, Scotland’s economy has always been dominated by heavy manufacturing; coal mining and its steel industries however in the recent years the extraction of North Sea oil has led to the rise of many petroleum industries this played a major factor in …show more content…

The EU operates as a single market and provides the member states with the opportunity to trade freely between each other. Currently the EU is facing a serious economic crisis; it is trapped in a cycle of low growth, falling income levels and rising unemployment. However, if Scotland achieved its independence they would have played a key role in ensuring the EU obtained some form of recovery. If Scotland was a member of the EU they would benefit from free movement of goods and services allowing Scotland to trade with other member states. As a result other member states would have access to Scotland’s oil reserves and would be able to reduce its dependency on importing oil from countries such as Russia, Kazakhstan, Azerbaijan who are all non- members and would be selling oil barrels at marginally higher prices. A fall in the level of imports would create a positive impact on the EU as it would help them reduce their trade deficits. Since the EU is Scotland’s main destination for international exports, the more trade taking place within the EU would also stimulate economic growth in Scotland, the below graph shows a possible outcome of what would happen to Scotland’s real GDP with the increase in trade between EU member states. AGGREGATE DEMAND= C+I+G+(X-M) Considering this formula suppose Scotland was an independent economy and a member of the EU the increase in trade of goods such as oil

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