The probable outcomes of Catalan independenceMuch of the economic probabilities depend on Spain’s response to Catalonia’s exit. If Spain agrees succession there would be little economic change for Catalonia. They would remain as part of the EU and continue dealing in the Euro currency. The only change is that they would no longer have to pay taxes to Spain.
However, if Spain continues to deny Catalonia independence, Catalonia could be forced to change currency, pay tariff, and start new trade agreements. Selfish NationalismCatalonia receives billions from European Union structural funds, and the regional government is in debt of approximately €42 billion. This creates the possibility of an independent Catalonia being forced to apply to the European Union’s bail-out mechanism. If Catalonia is refusing to finically support less prosperous regions of Spain, then why should the rest of Europe help Catalonia? This help includes financing the money to save their banks; pay their growing pension bill, added to the costs of armed forces, diplomatic service and whatever else that is needed that comes with state independence. Not to mention that Catalonia will have to cope with economic chaos and lost foreign investors’ trust while they wait to re-apply for membership of the EU, the euro currency and the EU single market.
According to Spain’s economy minister Luis de Guindos claims that the Catalan independence crisis has already cost the country a billion euro. This is due to a slowdown in growth in Catalonia. De Guindos stated that approximately 3,100 businesses, including major banks, such as Banco Sabadell, energy firms and retail firms have moved their headquarters from the Catalonia region. This creates big problems for Spain as Catalonia; attracts one third of inward investment into Spain; produces one third of Spain’s imports; and represents one fifth (20%) of Spain’s GDP. This is in comparison to Scotland representing 7.
5% of Britain’s GDP, which shows how dependant Spain is on Catalonia. The effect on other countriesCatalonia’s fight for independence comes very soon after Brexit. This creates a situation for other nations, as well as the European Union where other member states may too start demanding independence.This can be seen in the secessionist movement attempt of Scotland.
Following the Catalonia vote, The National newspaper, had a front page spread celebrating Catalonia events with the Catalonian flag in the masthead. Although it is no longer part of the EU it is a great example of ‘lead by example and others will follow’. In Western Europe alone there are several nationalists in Padania, Madeira, Bavaria, Flanders, and Scania seeking independence. This increasingly popular nationalism growth could potentially cause dangerous conflict between countries. Considering the long history of Spain’s Basque region seeking independence, this may restart the violent separatist movement there. Or the Kurdish push for independence may restart difficulties in the Middle East. There could even be a risk of reigniting secessionist movement in Northern Ireland which is delicate at the best of times. For the past seventy years there has been peace in Europe since the EU was drawn up, and there is no coincidence that the violence has started now that a now a single country is seeking independence.
No know can know what kind of dominos effect this will have on other countries. The potential of civil warThe EU budget Commissioner Gunther Oettinger, has previously warned the risk of civil war in Catalonia’s pursuit of independence, following the violent attacks that broke out during the referendum which saw police officers use batons and rubber bullets to prevent Catalan’s from voting. Nine hundred people were injured in the violence. This Government crackdown has created widespread protests across the region.
The Catalan’s have shown that they will not go down quietly and the Spanish has shown that they will do everything they can to prevent independence, including threatening