Catalans of all stripes go to the polls today to vote in a new parliament, following the imposition of direct rule from Madrid, and the scrapping of a unilateral declaration of independence for Catalonia by members of the former parliament.
The latest voter surveys – five were published last week – show clearly that no party can achieve a majority, and all indicate a very close race between the three parties that have promised independence, and the three that favor continued unity with the rest of Spain.
In the middle lies the anti-capitalist / hard left coalition that holds power in Barcelona, and could be the kingmaker. This group has made equivocal pronouncements about independence, one of the latest being “yes we support independence, but not now.” What that means to voters is anyone's guess.
The pro-independence parties say that if, together, they gain a majority and can form a government, they will immediately declare independence, contravening the Spanish Constitution, which declares the nation to be “indissoluble.” This would result in a political and constitutional crisis of a kind unseen since Spain's return to democracy in 1978.
There would be a great deal of negotiation and threats back and forth between Barcelona and Madrid, but if Catalonia – seven million people and the fourth richest region of Spain by per capita GDP –were to be severed from the rest of the country, what would that Independent Catalan Republic look like?
The region already has many of its own political, social, economic and even diplomatic institutions, which it would undoubtedly keep and strengthen. Catalonia currently has:
- Its own parliament – roughly equivalent to a state legislature in the US;
- Its own police force, with most members hand-picked to ensure a pro-independence stance and their chiefs selected by pro-independence politicians;
- Its own intelligence service – which has spied and compiled dossiers on Spanish politicians and Catalan pro-unity politicos;
- Its own fiscal policy and budgeting apparatus;
- Its own education system, operating almost entirely in the Catalan language and which teaches Catalan, rather than Spanish, history;
- Its own diplomatic representation abroad, with 16 “embassies” set up as permanent trade missions but which have functioned as part of the pro-independence propaganda machine;
- Its own television and radio – again, broadcasting a heavily pro-independence message which in many cases means anti-Spain.
What else would an independent Catalonia seek?
Several Catalan leaders -- including the former president of the Catalan Parliament, Carles Puigdemont -- have advocated leaving the European Union as well as the European currency, the Euro. Puigdemont has derided the EU as “a club of obsolete, decadent countries, where minorities rule and which are linked to increasingly debatable economic interests.”
The first phase of this departure would be easy – EU leaders including Jean-Claude Junker, the President of the European Commission and Donald Tusk, the President of the European Council, have both said that if Catalonia were to become independent, it would automatically be out of the European Union. Moreover, if Catalans changed their minds, the newly independent nation-state would have to apply for admission – a process that takes years, not months --and a single negative vote from a member (Spain?) would be enough to derail the process.
If Catalonia is not part of the EU, it cannot be a member of the Euro Group and would not enjoy the backing of the European Central Bank. But, this does not mean that Catalonia could not continue to use the Euro as its currency, as others outside the EU – Montenegro, Andorra, Kosovo, others – are doing.
Following the model of the United Kingdom's exit from the EU, there would likely be hard borders set up between Catalonia and Spain, Catalonia and France, and possibly between Catalonia and Andorra, adding greatly to the cost of shipping goods, increasing the possibilities of tariffs, etc. There would no longer be visa- and passport-free travel for Catalan citizens crossing to other European countries.
And what would happen to Catalonia's famed tourism industry? The region is Spain's #1 tourism destination, with more than 18 million visitors a year. If Europeans can no longer arrive without border controls and a passport, will they go elsewhere?
Moreover, the economy of an independent Catalonia will almost certainly suffer in another way: Driven by the possibility of Catalexit, more than 2000 companies – including all the region's largest banks and many industrial firms – have moved their fiscal headquarters (read: tax obligations) out of Catalonia to other parts of Spain. The full effects of this upheaval have yet to be felt, but they do not bode well for the standard of living of some of Iberia's richest citizens.
And it is not just Spanish firms that are worried about the uncertainty of independence. This week the Spanish Ministry of the Economy announced that foreign direct investment in Catalonia had fallen 75% in the third quarter, compared to the same period one year earlier. Very few companies are intrepid enough to invest where future laws and conditions governing their operations are unknown.
As we are seeing with Brexit, there would clearly be many other questions to clear up if Catalonia were to split from Spain: who pays the pensions of Catalan workers who have contributed to the central social security fund in Madrid? Who assumes Catalonia's debt (at €75 billion one of the highest of any of Spain's autonomous regions)? And, will other European countries – and countries around the world – formally recognize Catalonia as a sovereign nation?
Before any of these questions can be answered – or even asked seriously – the Catalan vote must be counted, and Madrid must react. We won't have to wait long.