Matt Qvortrup
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Shake your money maker
The economics of becoming a new country
in I want to break free
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To establish a new state is not just about international law; it is also about making money. How can a new country start paying its own bills? What have other countries done? Do they have to settle the score with its erstwhile parent state? (The answer will surprise you! Basically, the new country can walk away from the partnership without paying a penny. Ireland graciously granted the United Kingdom one pound when the two countries split up in 1922.) The international community has, so far in vain, tried to develop rules that lead to a sharing of debt. But is it prudent to simply walk away? What have new countries done? And why? Another economic issue is that of the currency. The British government warned that Scotland could not use the pound after independence. In reality, the Scots can use whatever they like. (Several countries use the US dollar without asking Washington for permission.) But the new state does not sit at the table and will not be able to set interest rates. So, simply using another currency can be tricky. And this is putting it mildly.

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I want to break free

A practical guide to making a new country

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