The logic of George Osborne leading the charge against Alex Salmond is slowly revealing itself. The government's trump card is that an independent Scotland could be forced to join the euro, and the Chancellor is the man to play it. He told ITV News last night: "Alex Salmond has said he'd want Scotland to join the euro and you have to ask yourself is that the currency you want to be joining at the moment."
In fact, Salmond's stance on the euro is considerably more nuanced than Osborne suggests. True, in 2009, the First Minister quipped that sterling was "sinking like a stone" and argued that euro membership was becoming increasingly attractive ("the parlous state of the UK economy has caused many people in the business community and elsewhere to view membership favourably"). But that, to put it mildly, is no longer the case and, consequently, Salmond has changed tact. Like Gordon Brown circa 2003, he now states that Scotland will retain the pound until it is in the country's "economic interests" to join the euro.
But last night Osborne refused to guarantee that Scotland could keep sterling. In truth, this was a bit of mischievous politicking by the Chancellor (no one believes that the UK would stop Scotland using the pound) but the Treasury has warned that it could ban Scotland from printing Scottish bank notes (just as the eurozone requires all members to use identical bank notes) and ensure that it has no say over valuation decisions, a situation comparable to Kosovo's membership of the euro.
The SNP has since come out fighting, declaring that "the more a Tory chancellor tries to lay down the law to Scotland, the stronger support for independence will become" but this is uncomfortable territory for the party. A spokesman for John Swinney, the Scottish finance secretary, insisted that the currency situation was "crystal clear" but in reality it is several shades of grey.
EU law currently requires all new member states to join the euro area once the necessary conditions are fulfilled. As a briefing note by the House of Commons library states:
EU Member States, with the exception of Denmark and the UK, are expected to join the single currency if and when they meet the criteria. Five of the twelve states joining the EU since 2004 have gone on to join the euro. Whether Scotland joined the euro would have implications for its post-independence monetary policy, and the size of its liability for loans provided to countries facing sovereign debt problems.
Whether or not Scotland kept the UK's derogation from the euro would be dependent on the will of other EU member states. There is no precedent for a devolved part of an EU country becoming independent. For once, we really would be in uncharted territory.
Thus, there is sufficient legal uncertainty for Osborne to speculate that Scotland could be forced to join the euro. And that is the most devastating weapon in the No campaign's arsenal.
Update: I should have added that Sweden, of course, has no official opt-out from the euro but has not joined the single currency after voting no in the 2003 referendum. The country is not party to the ERM II Central Bank Agreement (part of the criteria for euro membership) giving it a de facto opt-out.
Should this precedent apply to an independent Scotland, it would similarly not be forced to join. But this is hardly the cast-iron guarantee that many Scottish voters will want.