Two days before Scotland considers a referendum to leave the U.K., polling remains too close to call, according to analysts. Three of four polls published over the weekend show most Scots oppose secession, while one pointed to a slight edge for those favoring independence.
"There is now a very real possibility that Scotland might vote for independence from the U.K. this week," said SG Global analyst Albert Edwards in a research note.
The outcome of Thursday's vote has huge political, economic and social implications not only for Scotland, but also for Britain, with talk that Scottish independence could even spur the U.K.'s exit from the European Union. For now, however, investors are still betting that Scotland will reject full autonomy. Here are three reasons why financial markets think Scots will vote "no" to independence.
In the short-term, Scots would suffer. In time, Scotland could well flourish after gaining independence. In the near-term -- and that could extend for a period of several years -- exiting the U.K. would almost certainly damage the Scottish economy because of concerns of the country's prospects among consumers, businesses and investors.
"Undoubtedly money would flow out of the country (there is already evidence of this ahead of the vote), while businesses would likely immediately hold fire on investment and employment plans as they waited for a clear picture of exactly what form an independent Scotland would take," Howard Archer, chief U.K. and European economist with research firm IHS, said in a client note.
That picture could take a long time to take shape. For Scotland, winning its independence would entail a host of major decisions, ranging from what currency to use, to issues of national defense and NATO membership, to questions over foreign, energy, immigration and other policies.
Gaining admission to the European Union wouldn't be easy. Scottish leaders favoring independence have vowed to re-enter the trading bloc, which the U.K. already belongs to, by 2016. That pledge looks unrealistically optimistic. Analysts with political risk consultancy Eurasia Group note that other European countries with independence movements -- notably Spain, France, Italy and Cyprus -- would be wary of encouraging secessionists by signaling that breakaway regions could quickly re-join the EU.
Scots themselves could be an ever harder sell. Entering the EU might mean adopting the euro as Scotland's currency, linking the country's fiscal and monetary fate to that of the ailing currency union. Meanwhile, German Chancellor Angela Merkel has made it clear she wants tighter national integration in the EU and opposes any widening of regional cracks. EU membership requires a unanimous vote of support by all 28 countries in the union, and as its largest economy Germany holds a powerful trump card.
The pound may not be an option. Pro-independence supporters less enamored of the euro insist they can continue using the pound sterling even after leaving the U.K. But that would leave Scotland as a "very junior partner" to the British government, Edwards of SG Global said in a research note, shackling the newly independent state to the U.K.'s fiscal and monetary policy. That would also likely cause Scotland's deficit to rise, which would require painful spending cuts. Scotland could peg its currency to the pound, as some countries do with the U.S. dollar. But that, too, would require Edinburgh to couple its economic policies to London, weakening the rationale for independence.
Of course, the wild-card is that for Scots the debate over independence isn't only, or even chiefly, about the country's economic future. It may not even hinge on the long historical and cultural divide between Scotland and England. Rather, as economist Joseph Stiglitz notes, the current battle is animated as much by basic differences over what kind of nation each wants to be, especially as long as Britain's Conservative Party controls government.
"It is clear that there is, within Scotland, more of a shared vision and values -- a vision of the country, the society, politics, the role of the state; values like fairness, equity and opportunity," he wrote in The Scotsman. "Of course, not everyone in the country agrees on the precise policies, on the delicate balancing of complicated trade-offs. But the Scottish vision and values are different from those that have become dominant south of the Border."