It's just possible that if independent Scotland started life on day one as "the nation that repudiated all its sovereign debt outright", then it may have rather more trouble accessing the capital market than, say, Argentina in the last thirteen years and Greece from 2010-14. (This is one of the points made in the Citi report IIRC. It is not a credible threat for Scotland to make.)
Scotland has no sovereign debt to repudiate. Responsibility for the entirety of the UK's sovereign debt post-independence has already been accepted and guaranteed by England+. Presumably that means the actual debt will neither be repudiated nor defaulted on.
This has a lot to do with England+'s desire to be seen as the continuing state after Scottish independence. It's not the outcome many people in Scotland want, as they see the UK as having been formed by two equal partners, and they want to see that equal partnership reflected in the dissolutino process. However my reading of the tea-leaves suggests that the Scottish government is prepared to sell that pass in the interests of the wider picture.
If England+ is the continuing state, then of course it is liable for all the debt which has been run up in its name. Scotland's name is on none of that. (And in fact Scotland isn't responsible for running it up either, as Scotland has been in surplus every one of the past 30 years.) Westminster has staked its claim to continuing state status by accepting 100% responsibility for the debt.
England+ is hoping to come to an agreement with iScotland for iScotland to accept the responsibility for servicing a due propostion of that debt. The Scottish government has already, up-front and before any negotiations start, expressed its complete willingness to do just that.
That is not repudiating any debt, by any possible way of describing the situation.
What it is, is a private agreement between the two parts of the dividing state, as to how the division should be accomplished. It is of course implicit in the offer to accept responsibility for a proportion of the sovereign debt (in a sub-contractor sense that is - England+ has the
actual primary liability) that this is contingent on mutual assets also being shared.
The Scottish government points out, quite reasonably, that if England+ intends to retain ownership of all the mutual assets, it can keep all the debt as well.
This isn't reneging, in any sense. As I pointed out above, the actual creditors will not find themselves short-changed, because England+ has pledged to service 100% of the debt. So the debt as such will not be defaulted or reneged upon by anyone. Unless England+ goes back on its undertaking. But at the subcontractor level, it's not reneging either. Nobody in their right mind can possibly expect Scotland to meekly accept a proportional share of the debt in a private agreement, if there is to be no proportional share of the assets.
And if that is in the end the outcome, there is no particular reason for international creditors to look with disfavour on Scotland, since no debt will have been defaulted on, and all that will have happened is that England+ will have failed to get iScotland to come to a private agreement to share responsibility for some repayments, because of its own intransigence in refusing to apportion assets.
And in that situation, iScotland will have very little need of borrowing anyway, since it will be debt-free and in possession of the assets in its own geographical territory. Quite a tasty prospect, some suggest.
Rolfe.