Scotland is debating if the country should claim independence from the United Kingdom. As the Scots and the U.K. continue to grapple over the ending of their union, a breakup may not be healthy for the United Kingdom’s economy and exchange traded funds.

“Unless the U.K. does a much better job of making a case that the Scots can have the kind of union that they want to have, we are on the path to independence,”Alan Trench, senior research fellow at University College London, said. [Using Single-Country ETFs to Invest in Sectors, Diversify]

Scotland has been a member of the United Kingdom since the 1707 Act of Union, however, there is some autonomy as Scotland has its own parliament with various powers, reports Ainsley Thomson and Cassell Bryan-Low for Scots would like to have the choice to either be free from the U.K. or to have more powers within the current United Kingdom, which also includes Northern Ireland and Wales.

Alex Salmond would like to vote for the fate of Scotland by the year 2014, as tension has been boiling between himself, and the U.K. Prime Minister David Cameron. [UK ETF Affected by Austerity Measures]

The $1.3 billion  iShares MSCI United Kingdom Index Fund (NYSEArca: EWU) holds about 20% of assets in oil, and related industries. The greatest debate for the independence of Scotland rests on the North Sea resources that are found in Scottish waters.