No Campaign's Arguments About Scottish Independence 'Based On Fear', Economist Joseph Stiglitz Says

Alex Salmond has found an ally in the bitter argument about his "plan B" for an independent Scotland's currency, with a leading economist saying the issue is "a lot to do about nothing" and intended to promote "fear".

Professor Joseph Stiglitz, an American Nobel Prize winner, said a currency union between an independent Scotland and the rest of the UK could work, as he dismissed the refusal of the main Westminster parties to agree to such a deal as "bluffs".

The expert, who is a member of the Scottish Government's council of economic advisers and its Fiscal Commission Working Group which has studied the economics of independence, spoke out as First Minister Alex Salmond and former chancellor Alistair Darling, the leader of the pro-UK Better Together campaign, prepare for tonight's live television debate.

Prof Stiglitz said: "One of the things as an outsider I've looked at the debate, particularly from the No side, I've been a little bit shocked how much of it is based on fear, trying to get anxiety levels up and how little of it has been based on vision.

"There is a vision on the Yes side that I see - what would an independent Scotland be like, what could it do that it can't do now."

Joseph Stiglitz

Regarding the rejection of a currency union by the Conservatives, Labour and the Liberal Democrats, he said: "For the most part these are bluffs."

The economics expert told the Edinburgh International Book festival that if there was a Yes vote on September 18, there would have to be talks between Scotland and the rest of the UK.

"People are going to be looking at what is in the best interests of the each of the two parties and there will be a negotiation," he said

"I think inevitably they are bluffing."

He argued currency union could work, saying: "Panama and Ecuador have adopted the dollar - it's worked for Panama for over 100 years. So the argument that England could decide I think is a little bit short-sighted."

He went on to state that countries such as Canada and some of the Northern European states used their own currency, saying: "There are many currency arrangements that can work, I think this is a lot of to do about nothing."

He argued more fiscal stimulation was needed to boost the economy after recession, as he condemned the austerity politics of governments such as Westminster.

Prof Stiglitz said: "The austerity policies in Europe and in England have been an utter disaster. I have done a calculation of the cost of these policies, and we're talking about for Europe as a whole, trillions of dollars and the costs going forward are even larger because the young generation, who should be having productive jobs, are spending time in unemployment, not building up their skills, getting disaffected.

"That's the vision of Cameron, the vision of more unemployment."

He said: "There are risks always in any economic course, there's risks of doing something and risks of not doing something.

"So the risks of staying together is you could have a Conservative government that cuts back on government spending and that would force inevitably cutbacks here in areas of health and education.

"So there are risks either way. The difficult part is to assess those relative risks and there is no easy way of doing that. That's one of the judgments people as they go to the polls will have to make."

Tonight's debate is a rematch of the August 5 debate, after which both sides claimed victory but Mr Darling exceeded expectations with his performance, as Mr Salmond had been regarded as the better debater.

This time, the debate will be seen across the UK. The last debate was shown only in Scotland and broadcaster STV's online service crashed under the weight of people trying to stream it.

Before that debate, The Huffington Post UK posed five questions for each side to ask the other. As a primer for tonight, here they are again:

Salmond To Darling:

Cameron agrees that Scotland can be a "successful, independent country", so why are you doing us down?

5 Questions Salmond Should Ask Darling In Tonight's STV Debate

Darling To Salmond:

How can an independent Scotland stay in the EU and keep the pound?

5 Questions Darling Should Ask Salmond In Tonight's STV Debate