All to play for

September 12, 2014

A "No" campaign poster is seen in a field after being vandalised by a "Yes" supporter on the outskirts of Edinburgh

The latest Scottish opinion poll puts the unionist camp ahead by 52 points to 48 – still way too close to call given the statistical margin for error.

The last two polls have given the “No” campaign clinging to a narrow lead following a dramatic narrowing of the gap and one survey giving the separatists a lead. So has the “Yes” momentum stalled? If you chart the numbers over the past two weeks you might think so but if you did so over the past two months you would say emphatically not.

YouGov, purveyors of the latest poll, noted that on their figures the “No” camp has gained ground for the first time since early August. The last two surveys were the first to have been conducted since it became clear that the nationalist vote was on the charge. Has that concentrated minds? Who knows.

Scottish Nationalist leader Alex Salmond is taking no chances and will conduct a whistle-stop tour of seven cities today. Some have argued that the debate for and against has already been played out but that looks wrongheaded. There is everything to play for in the last week with those yet to make up their mind amounting to 10 percent or more of the electorate and some who thought they had decided maybe thinking again.

Bill Clinton’s maxim of campaigning was that when he said something for the 100th time and was so sick of it he could barely get the words out, that was the moment that it resonated with the public for the first time.
So no one can judge whether the repeated warnings about banks moving south, Scots not having the pound etc etc will only really hit home now. So far, Salmond’s counter that London is trying to bully Scots into voting no and orchestrating a scaremongering campaign has got traction.

The European Union has put its latest sanctions against Russia into effect. Washington will row in behind later, limiting the access of major Russian banks, including Sberbank <SBER.MM>, to U.S. debt and equity markets, according to our sources. Russia’s foreign ministry said  the EU had “made its choice against” the current peace road map. It said it would respond.

Russia’s central bank holds a monetary policy meeting. Having unexpectedly raise rates by a half point in late July to defend the tumbling rouble, it is expected to hold rates at a heady 8 percent into next year as a ban on Western food prices – a tit-for-tat response to EU/U.S. sanctions – pushes inflation up. Analysts said there was a small chance of another hike.

French President Francois Hollande is in Iraq to prepare for a Paris-hosted international conference on Iraq’s security crisis on Monday as the United States tries to build an international coalition to take on Islamic State militants. Hollande is the first Western head of state to visit Iraq since Islamic State seized swathes of Iraqi territory this year. France says it would take part in military air action against IS in Iraq if necessary.

Euro zone and EU finance ministers meet in Milan for the first time since their summer break with new life breathed into the debate about the role of fiscal policy.

Having played what could be his final cards to drag the euro zone out of its malaise, European Central Bank President Mario Draghi has put the ball firmly in governments’ court. Draghi does not advocate the EU abandoning its debt limits (which, by the way, already have built-in leeway which can be exploited) but sees scope for public investment programmes and lower taxes.

The French government’s admission that it will take until 2017 to get its budget deficit back to 3 percent of GDP may not be what he had in mind. Germany’s refusal to countenance any more public spending despite a record budget surplus in the first six months of the year probably isn’t either.

Dutch Finance Minister Jeroen Dijsselbloem, who heads the Eurogroup, echoed Draghi’s playbook last week, saying euro governments had to increase competitiveness and that could go hand in hand with a bit of Keynesian-style stimulus.

German Finance Minister Wolfgang Schaeuble and his French counterpart, Michel Sapin, have promised they will bring joint proposals for increasing investment in Europe to the meeting in Milan. But Schaeuble has rebuffed calls for more public spending and focused on private investment – “user-finance projects” – although Germany has its own pressing need for infrastructure investment.

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