Documente Academic
Documente Profesional
Documente Cultură
Ainsley Duke
Phillips
13 December 2017
corner of the country. A vibrant province with its own distinct culture and language, Catalonia
accounts for more than 20% of Spains economy, 25% of its exports, and 25% of its foreign
investment, despite only containing 16% of the nations population (Henley). Due to their
advanced economy, different language, and separate culture, the Catalan people have been
pushing for independence from Spain since the 19th century. However, regional elections and
referendums since 2015 show increasing Catalan support for separatist politicians and ideas.
Reflecting these views, separatist tensions culminated in October of this year when Catalonia
held an illegal referendum for independence, which terminated in a 90.9% vote for secession
(Stone). Due to differences in tax collection and debt allocation after a split, as well as political
consequences like boycotts of Catalan goods and rejection from European Union membership,
the economic ramifications of a Catalan secession would majorly impact both Spain and a new
Catalan state.
The diplomatic allocation of public debt is one issue Spain and Catalonia would face
upon separation. Along with its own minimal budget deficit, the new Catalan state would likely
need to absorb its own proportional share of Spains current national debt during separation
negotiations (Banal-Estonal et. al). However, the amount of debt Catalonia takes on during its
secession affects its future success as a sovereign nation. Sofia Bosch, a CNBC fiscal reporter,
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reports that although Catalonia is responsible for 16.34% of Spains national debt, there is no
foreseen amount that it would have to assume after the split. Catalonias future economic success
hinges on whether or not it could pay back its debt. If Catalonia must assume an amount of debt
that is larger than it could feasibly pay back, the future economic success of the new country
could be in jeopardy. The political compromises made during the possible split between
Catalonia and Spain could make variable, but certainly large, impacts on the future economies of
both states.
Political grudges are another issue that would face a new Catalan state in the conception
and preservation of its economy. About 35% of Catalonias exports go to other parts of Spain
(Bosch). In the past, other regions of Spain have boycotted Catalan goods during times of
political turmoil between the two. For example, an extremely popular Catalan wine called Cava
was boycotted across Spain in 2004 in response to communist, socialist, and separatist coalitions
forming in Catalonia (Banal-Estonal et. al). Catalan-Spanish history has shown that boycotts
occur when there is turmoil between the two regions. If more than one third of Catalonias
exports were blocked due to political boycotts from the rest of Spain, the region would
In addition, Catalonia may not be able to rejoin the European Union (EU) as a sovereign
nation. Catalonia currently reaps many benefits from its EU membership under Spain. For
example, Spain uses the Euro as its currency, just like 19 other EU member states. Spain is also a
Schengen state, meaning that tourists, business people, and many others are able to travel
between the borders of Spain and other Schengen states as if they are travelling in one country
(Countries). This common currency and lack of borders within the EU give Catalonia many
different benefits, such as a boosted tourism industry. However, if Catalonia secedes, it will not
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be likely to join the EU as an independent nation. Due to official EU rules, there must be a
However, Spain and many of its allies would likely block Catalonia from becoming a member
after its secession (Bosch). Catalonias occlusion from the EU would be detrimental to its
economy for several reasons. First, about 65% of Catalan exports go to member countries of the
EU. By no longer being involved in the unified economic system under the Euro, trading with
foreign countries becomes much more complicated (Martin). Additionally, travelling from
Catalonia to Schengen states would become more difficult as one would have to undergo
customs to enter or exit. By being blocked from many of its largest export markets through
political boycotts and exclusions, the new Catalan state would face economic hardship in its first
few years.
Spain, involves the collection and distribution of tax money. Catalonia currently holds only 16%
of Spains population, but pays for 20% of its publically-garnered funds and only receives 14%
of that money back for its own public works . Consequently, 8% of Catalonias GDP is
transferred to the rest of Spain (Benavides). Catalonia would retain more money through taxes as
and Albert Banal-Estonal, the new Catalan state would likely use the saved money to repair its
own infrastructure and create new Catalan national institutions. However, Spain would lose the
Catalan tax money, which is a large beneficiary of the national government and infrastructure.
In the case of a Catalan secession, both regions would experience initial economic
downcline. Due to protests, riots, illegal referendums, and police violence within Catalonia
surrounding the secession debate, the legal headquarters of nearly 3,000 businesses moved away
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from the region. In addition, the Spanish administration saw its projected economic growth for
the 2018 year drop from 2.8% to 2.3% (Euronews). These statistics portray the economic pains
of political turmoil. Additionally, one of Spains largest industries would take a serious hit in the
event of a split. Tourism has worked to pull Spain out of an economic recession over the last five
years and currently accounts for 14% of its GDP (Catalonian Crisis). Containing tourist
attractions like La Sagrada Familia, the Gothic Quarter, Mediterranean beaches, and mountain
ranges like the Montserrat, Catalonia is one of the most concentrated Spanish regions for tourism
(Catalonian Crisis). Since the beginning of this years political crisis in Catalonia, Spains
tourism industry dropped 4.7%, and if the crisis continues, both regions will be sure to see
declined tourism (Euronews). If combined with restricted ease of travel between countries in the
case of Catalonias rejection from the EU, this could seriously restrict travel and tourism within
On the other hand, Catalonia could experience economic success in the long-term. Its
location on the Mediterranean and its proximity to commercially vibrant countries like France
and Germany make Catalonia likely to succeed economically in the future. Hamish McRae, one
of the United Kingdoms most highly respected financial journalists, asserts that when countries
are located next to other or in areas of great commercial activity like the mediterranean, they are
apt to be pulled along by the economic success of these countries to experience prosperity of
their own. This is because these countries are likely to trade with each other and take part in
forecast major economic changes. The political consequences of boycotts on Catalan goods and
blockage form the European Union would harm the Catalan economy. In the context of public
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taxation and spending, however, Catalonia would greatly benefit because more of the money it
makes from taxes would go back into its own economy. Although there are many probable
economic outcomes of a Catalan secession, there are no certainties. Until an actually secession
happens, no economist, professor, or public official can be sure of any denouement. Peter
Altmaier, the finance minister of Germany who is in favor of Catalonia remaining a part of
Spain, said a resolution to the crisis based on the constitution and the rule of law will help limit
the economic consequences. (Brunsden). On the other hand, the growing separatist movement
believes secession is the best thing for Catalonia culturally, politically, and economically (Fabre
et. al). Whatever political separations happen, the economies of Spain and Catalonia have
already been largely impacted. Within the uncertainty surrounding the Catalan crisis, the
economy will assuredly experience further change if Catalonia secedes, portraying the effect that
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Consequences of a Split. The Conversation, The Conversation US, Inc., 12 Dec. 2017,
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Benavides, Lucia. The Big Reason Catalonia Wants to Secede May Be Economic: It's One of
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