The Crisis in Catalonia: Positive and Negative Effects of a Possible Catalan Secession

By Kathy Wang

Spain is made up of seventeen autonomous communities. One such community, Catalonia, has been engaged in a fight for independence. Since the 12th century, when Catalonia was conquered by the Kingdom of Aragon, the Catalans feel as if they have continued to be suppressed, whether it be through Franco’s regime in the 1930s to 1970s or the current day situation in which Catalonia is contributing more in taxes to Spain than any benefits that they are receiving. On October 1, 2017, the Catalans held an illegal referendum asking the citizens of Catalonia whether they supported the independence of Catalonia or not. There was 40% voter turnout, with 90% supporting independence. However, since this referendum violated Article 2 of the constitution which refers to the “indissoluble unity of the Spanish nation,” the referendum was deemed illegal by the Spanish government and police came into the polls to disperse the voters. The police faced a lot of backlash, with people deeming this as police brutality, as 844 people were injured when police threw tear gas at the citizens. With the gravity of this situation, what would be the benefits or consequences of granting Catalonia its secession?

 

Benefits

  • Puigdemont, the deposed Catalan president, “vowed to prolong the fight for independence from Spain.” With Catalonia committed to fight for its independence, Spain could be facing potential civil war with its wealthiest region, thus it could better if Catalonia were to be granted secession now.
  • Tensions and violence between Spain and Catalonia since the independence referendum has already caused a 15% drop in Catalan tourism, a major part of Catalonia’s economy. With further violence down the road as Catalonia prepares to fight for its independence, and possible civil war, it would be detrimental to Spain and Catalonia’s economies if they were to prolong the fight and Catalan secession could be better for both nations. Additionally, Catalonia would be able to regain control of the 16 million euros that it contributes to the Spanish government in taxes each year.
  • Following the illegal referendum, the Spanish government has enacted Article 155 which would allow it to “take all measures necessary” to ensure compliance with the law, including suspending the self- government of Catalonia. Some people have expressed that this use of Article 155 severely oppresses Catalonia and impedes upon their right to self-determination under international law. Aidan Hehir of the University of Westminster states that “Article 1.2 of the UN Charter recognises the principle of self-determination – making this a right which transcends any state’s domestic laws. A fundamental principle of international law is that the provisions of a state’s constitution cannot be deemed inherently legal – they must equate with international law”. Thus, in using Article 155 to justify the prevention of Catalonia’s secession, Spain is violating international law and should grant Catalonia independence to prevent potential punishments.

 

Consequences

  • There could be many economic consequences if Catalonia were to gain their independence. First, Spain would face a loss in its exports. Catalonia accounts for 25% of total exports from Spain. Granting Catalonia independence would result in a detriment to these revenues. Second, Catalonia comprises around 20% of Spain’s GDP. Maria Ortega of the Daily Express Newspaper finds that “Spain’s debt-laden economy is still vulnerable to shocks [and] would be significantly damaged by the independence process. [Catalonia’s] independence would mean that the weight of the national debt would rise up to 120 percent of GDP…[and] it would be inevitable that Spain would take over the Catalan portion of debt, [while losing] the production that Catalonia contributes to the national GDP as a whole.” Third, CNN states that “Catalonia has a proven record of attracting investment, with nearly a third of all foreign companies in Spain choosing the regional capital of Barcelona as their base”. Beyond the evident loss of this foreign investment for Spain if Catalonia were to gain independence, such actions would also provide detrimental effects for Catalonia. According to the Financial Times, “Businesses in Catalonia have warned that political instability, violence and legal uncertainty could deter investment and hurt the economy.” Many of these effects have already started to take place due to the threat of Catalonian independence. The New York Times finds that “Investors have been withdrawing funds and significantly raising the risk premium they demand for holding Spanish and Catalan debt. In October, the government reduced its forecast for national economic growth in 2018 to 2.3 percent from 2.6 percent. Since the referendum, more than 2000 companies have moved their legal headquarters outside Catalonia.”
  • An independent Catalonia would not be allowed to join the European Union. Many EU states and non-EU states have already refused to acknowledge Catalonia as a country, if it were to secede, including the US, UK, France, Germany, and Mexico. Not being a part of the EU would result in many detriments for Catalonia. CNBC finds that Catalonia would not have access to the Euro, it would face increased tariffs, and “large transition costs, as the EU accounts for 65.8% of Catalan exports.” Other than these economic detriments, Catalonia would also lose access to many benefits of the EU, such as tourism and control of human trafficking.
  • If Catalonia were to be granted its independence or secede, then this could also strengthen the force of other secessionist movements and threaten political stability. For example, Basque Country in Spain also has a separatist movement that actually has been more violent than the movement in Catalonia. After seeing that Catalonia seceded or was granted independence, the Basque secessionist movement could get more violent and push further for their independence.

What do you think? Should Catalonia get its independence?