Eurozone crisis 1

Finance Secretary John Swinney told MSPs there would undoubtedly be a wider effect if the Euro was to collapse or the Eurozone was jeopardised as 45% of Scottish exports go to the Euro area.

Mr Swinney said an "open economy like Scotland" could not be immune from the pressures gathering in the Euro area.

The finance secretary was leading a debate on the impact of the Eurozone crisis on Scotland on 30 May 2012.

He said Scotland needed a positive response to calls for an expansion of capital investment, adding cutting capital budgets by 33% "cannot be the right economic medicine at this time".

Mr Swinney said "simple austerity measures" are depressing economic growth and economic recovery.

Scottish Labour leader Johann Lamont said Scotland was not immune from the Euro crisis and must prepare for the impact.

Ms Lamont said the last UK Labour government had saved the banks during the banking crisis and as part of the UK Scotland shared the risks and the rewards of the union.

She said Alex Salmond was the only leader who wanted separation between fiscal and monetary policies in an independent Scotland and after the Euro crisis was over there would almost certainly be much tighter fiscal coordination between the Eurozone countries, with the first minister wanting to "go in the opposite direction."

Gavin Brown, the finance spokesperson for the Scottish Conservatives, said while he approved of a number of the measures John Swinney had mentioned in his speech, there was still "a bit of a sense of complacency" in the Scottish government's response to the crisis and it was "not being treated as seriously" as it should be.

The risk of a Greek exit from the Euro looms large, ahead of another Greek election on 17 June. Contingency plans are being made in some EU capitals.

Greece has been in recession for five years, crippled by a debt mountain, high unemployment and labour unrest.

There are fears that a Greek exit could trigger a run on the banks - not only there but in other Eurozone countries.

The second part of the debate can be viewed below: