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Catalonia – The Cost of Independence

On Wednesday October 3rd, you maybe had the chance to attend Carles Puigdemont’s interview held by Room for Discussion. Talking with the two interviewers, he explained that it was undoubtedly difficult to live away from his native country and his family, but he made one thing clear: he still feels at home in Belgium, because for him, Europe is home. The implications of Catalonia’s independence with Europe have been highly discussed since last year. In this article, we will analyse Puigdemont’s interview and the situation of Catalonia and Europe.

The interview

“I have always believed in the independence of Catalonia, but I have also worked with the idea that Spain can be Catalonia’s state if the country accepts Catalonia’s identity”. What Catalonia is demanding to the Spanish government, Mr. Puigdemont explained, is the right to ask, the right to explain their project, and the right to be independent. In a debate like this, he continues, no one is ever completely right, that is just a part of democracy. But no solution can be reached if Spain does not agree to talk. He argues that the Central government’s response to the Catalan aim to reach a solution had resulted in people going to jail without trial. At present, with Pedro Sanchez’s neww government, the climate has changed in politics, but the politicians, he argues, are still the same.

Puigdemont has been traveling around some key European countries since he left Spain last year. His aim? “I must explain the risk”. He clearly stated that he is not worried about the lack of support he faced for the Catalan referendum – “I believe in Europe” – but he is disappointed about the silence that other countries showed about the violation of fundamental rights in Catalonia. The former president rejects the idea of the union of Spain, seen as a religion – “all borders are artificial” – but rather believes in a politically unified Europe. A more federal Europe, he explains, will recognise more diversity, its own diversity. If living in small states makes European citizens better off, then, why not consider it?

But for now, the situation does not seem to have changed much, and an agreement with Spain has not yet been reached. Thus, when the Room for Discussion interviewers asked him if he will ever be able to go back to Spain, his answer was: “To Spain, I don’t know, but to Catalonia yes.”

The cost of independence

Puigdemont has titled his new book The Catalan Crisis, an opportunity for Europe. The implications of this separatist movement will certainly have an impact on Europe, but what about the impact on Catalonia?

Catalonia already has some features that give the region certain autonomy – their own parliament, police, flag, and control over some of their public services such as health and education. However, the costs of being an independent state are not to be underestimated; border control, defence, a central bank, inland revenue. These are just a few of all the added expenses that the state would have to face since they would not be covered by the Spanish central government anymore. Plus, it is not clear still how international companies established in the region as part of Spain would react to the formation of a new government.

Catalonia already saw the negative impacts in their economy after the referendum last year (more than 3000 companies moved their headquarters away from the region). However, Puigdemont made it clear that Catalonia is still comparatively powerful in its economy inside Spain. But we should ask ourselves, is this enough to bear the costs of independence? We must not forget that Catalonia had a public debt of €77 billion in 2017, which accounted for  34,5% of Catalonia’s GDP. Of this amount, €54 billion are owed to the Spanish government.

But returning to the central question of our article, what are the implications when it comes to Europe? Around two-thirds of Catalonia’s foreign exports go to the EU. If it seceded from Spain, the region would need to reapply to become a member – a petition that would require all EU members to agree, including Spain. The question of currency arises as well; theoretically, Catalonia would lose access to the Central European Bank and to the eurozone, and to get access back they would need to meet certain requirements.

In practice, we cannot predict what will happen. Puigdemont made it clear – they do not want to exit the European Union. But this is the first time that a member of the Eurozone has declared independence aiming to rejoin as a new country. European Commission President Jean-Claude Juncker stated that he won’t back up the Catalan Independence, fearing that other secessionist movements within the EU may follow the same path. “I wouldn’t like a European Union in 15 years that consists of some 90 states.”

For more information about Europe’s current situation and implications, make sure not to miss Room for Discussion’s next interview: Former European Commissioner Neelie Kroes will be at Roeterseiland campus on Monday 8th of October (and yes, Rostra will be there to make sure we can inform you all!).


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