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Scottish independence: Ex-diplomat issues warning from the past

First Minister Alex Salmond
First Minister Alex Salmond

A retired British diplomat has suggested there are parallels between Alex Salmond and the man behind a disastrous attempt to establish a Scottish colony in South America more than 300 years ago.

James Malcolm, a former ambassador to Panama, said the first minister – who has been campaigning for independence all his political life – reminded him of William Paterson who led the ill-fated Darien expedition in the late 1690s.

The venture nearly bankrupted Scotland and was one of the reasons behind the 1707 Act of Union with England.

Mr Malcolm, 68, who was a diplomat for 41 years and also served in Jamaica and Indonesia, said: “William Paterson, one of the founders of the Bank of England, was a promoter, he was a man who had a vision, I think very much like Alex Salmond.

“I think Alex Salmond does genuinely have a vision but it is not very well thought out.

“Asking the Scottish population to jump over a cliff and everything is going to be fine without knowing what is at the bottom of that cliff frankly is nonsensical.”

Mr Malcolm, who retired in 2006 and lives in Edinburgh, also warned against an independent Scotland using the pound without a formal currency union with the rest of the UK.

Panama has informally used the US dollar as its currency since 1903.

Mr Malcolm said: “Panama has no control over its interest rates because it has no central bank because it has no currency.

“The biggest thing you cannot do, and I believe you would not be able to do in Scotland after a yes vote, is devalue the pound.

“So you have a situation like you have in Greece today where you have a currency which is too highly valued for your exports and imports and that would cause real economic pain.”

But SNP MSP Kenneth Gibson said economics expert Professor Anton Muscaltelli of Glasgow University said it would be “economic vandalism” for any UK Government to fail to agree a currency union with a new state.

“The position of the No camp parties is nothing more than a campaign tactic – and has been derided as a “bluff” by Nobel Prize winning economist Joseph Stiglitz,” added the MSP.

“The Yes campaign is proposing a common-sense currency union which is in the interests of Scotland and the rest of the UK – which is exactly why one will be agreed after a Yes vote.”