It doesn’t matter whether Scotland votes to stay in the U.K. or cut ties with the Union. Economist and Harvard professor Kenneth Rogoff says that either way, the Scottish independence referendum is already a disaster. He also warns that it sets a precedent for other economies in Europe that wish to split from the eurozone currency unions.
In an interview with CNBC, the former director of research at the International Monetary Fund said that Scotland would feel the sting first. Even though the Scottish government has said that the independence vote is a “once-in-a-generation opportunity,” it doesn’t mean that independence is off the table.
“Even if it doesn’t pass people are not going to want to invest there because they might do it again. People will migrate out of there,” Rogoff told CNBC.
Scotland could also serve as a catalyst for other incorporated regions to demand independence, said Rogoff. That would be bad for the European Union.
“Other places in Europe will say, ‘Hey, we can do that too’. So it’s certainly quite a wild card there,” he said.
The Yes and No camps are nearly neck-in-neck at the moment, with those in support of independence gaining a surprising lead in the polls late in the game.
British Prime Minister David Cameron is currently in Scotland making a last-minute appeal to keep the union intact. Bank of England Governor Mark Carney also warned about the economic implications of independence, dismissing pro-independence leader Alex Salmond’s plan for a currency union.
The independence referendum will be held on Thursday, Sept. 18 and the results should be released the next day.