Why Scotland’s future is important to the UK and the rest of Europe

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Nov. 26 2019, Updated 10:39 a.m. ET

Scotland’s economy

The Scottish economy stands firmly on four pillars:

  1. Financial services
  2. Tourism
  3. Whisky
  4. Oil

Financial services

Scotland is one of Europe’s leading financial centers and the second financial hub in the United Kingdom outside of London. The strength of Scotland’s financial services industry lies in its diversity. It’s a leading centre for pensions, investment, banking, professional services, and asset servicing.

Financial services contribute more than 8% of Scottish onshore economic activity. The sector employs around 7% of total Scottish employment. The United Kingdom is widely recognized as a global leader in financial services. Scotland’s vibrant financial sector is an important contributor to this strong position.

Tourism

The tourism sector is of vital importance to the Scottish economy. Tourists’ spending represents almost 5% of the total Scottish GDP. Employment in the tourism-related industries sector accounts for around 7% of employment in Scotland.

In 2014, tourism in Scotland has taken center stage in global terms for hosting two of the world’s biggest sporting events, the Commonwealth Games and the Ryder Cup.

Whisky

Whisky is probably the best-known of Scotland’s manufactured products. Exports have increased by 87% in the past decade.

Whisky has contributed increasingly to the UK economy, making up a quarter of all its food and drink revenues. It’s also one of the UK’s overall top five manufacturing export earners.

Oil

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With Scottish waters consisting of a large sector of the North Atlantic and the North Sea that contain the largest oil resources in the European Union (or EU), Scotland is the EU’s largest petroleum producer. The North Sea has always been seen as crucial—not only to employment (6% of the working population of Scotland) and tax revenues, but also to the whole viability of Scotland as a thriving and independent nation-state.

With claims over North Sea oil revenues under deliberation as the results of the Scottish referendum draw close, those investing in European equities through exchange-traded funds like the Vanguard FTSE Europe ETF (VGK), the iShares MSCI EMU Index Fund (EZU), the SPDR DJ EURO STOXX 50 ETF (FEZ), the iShares MSCI EAFE ETF (EFA), and the iShares MSCI Germany Index Fund (EWG) have become wary of their holdings.

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