Checkmate: The Political and Economic Consequences of Catalonia's Independence
Drivers of the pro-independence movement
Secession movements have been present in Catalonia since 1922 but have grown in intensity since 2010. Three driving factors, encompassing the political, economic and social aspects of the pro-independence movement, can be attributed to this recent rise.
One of the first triggers for the current pro-independence movement came with the Spanish Constitutional Court’s decision in 2010 to reject the 2005 Catalan Statute. This verdict limited the region’s autonomous reach by affecting the regional language, immigration policies, taxes and right to referendums. In response to the verdict, non-binding symbolic referendums were held in 2011 and more prominently in 2014. An estimated 37 percent of eligible voters participated in this vote, with the outcome 80.72 percent in favour of independence. Although the 2014 referendum concluded peacefully, it led to the barring of former President Artus Mas from office, because it was held against Madrid’s orders.
There have also been economic drivers for the surge in pro-independence movements over the past decade. Notably, the region is currently the most profitable area of Spain; in 2015, Catalonia contributed 20.1 percent to Spain’s overall GDP valued at EUR 215.36 billion and 25.6 percent to Spain’s total exports valued at EUR 65.2 billion. However, following the 2008 economic crisis, the regional unemployment rate increased by 10.75 percent between 2010 and 2014. The lack of economic opportunity reportedly resulted in a 133.5 percent increase in the support for independence over the same timeframe. While the economic situation has since stabilised in the country, many ordinary residents are still feeling the effects of the crisis.
The final social aspect of the pro-independence movement further explains its resurgence. Two factors become apparent: Catalonian nationalism and former Catalonian President Carles Puigdemont. Pro-secessionists have claimed that a cultural divide exists between Catalonia and the larger body of Spain. Catalan identity is at the core of the independence movement, partially attributed to a perceived oppression during the Francisco Franco dictatorship (1939-1975). This sentiment has been stirred up most recently under Puigdemont who played a central role in the lead up to the 1 October referendum. While not a formal candidate during the 2015 regional elections, the “accidental President” and former mayor of Girona has always been driven by secessionist ideology. Determined to highlight the Catalonian cause to the international community, Puigdemont published a book as early as 1994 providing insight into the proindependence movement, and founded Catalonia Today, a free English newspaper in 2004 further maximising exposure. Under his leadership, the movement has reached the historic momentum witnessed today.
Political impact
The referendum has highlighted the Spanish government’s zero tolerance approach to Catalonian independence under Prime Minister Mariano Rajoy. In addition to the shutting down of voting stations on the day, confrontations between referendum participants and riot police in the days following the vote resulted in injuries to 844 civilians and 33 security officials. While violence has since subsided amid a global public outcry, the Spanish government has now opted for legal measures of control.
Following a Catalonian parliamentary vote to declare independence from Spain on 27 October, an emergency Madrid plenary session was held to vote in favour of enacting Article 155 of the Spanish Constitution. The implementation of Article 155 has been deemed a Madrid-ordered requirement to reinstate “constitutional order”. Article 155, previously described as an “atomic bomb” by José Manuel García-Margallo, former Spanish Foreign Secretary, has never been implemented before. The Article has now frozen Catalonian autonomy, granting full control to Madrid, including of the media, and has since dissolved the current regional government.
New regional elections have been announced for 21 December 2017, but initial reports fear the potential for a new hung parliament particularly as the elections are likely to be symbolic and Puigdemont is expected to face similar consequences to his predecessor. Moreover, Madrid may also choose to invoke Article 116 of the Constitution, permitting the implementation of martial law in a state of emergency for a total of 30 days. Amid growing anger among secessionists, a political stalemate has ensued and the threat of violent unrest is elevated.
Secession movements have been present in Catalonia since 1922 but have grown in intensity since 2010.
Commercial impact
The political maneuvers between Madrid and Barcelona have also had a knock-on effect on businesses in Catalonia. Given the region’s importance to Spain’s economy, the question of secession has created much economic uncertainty to which businesses have already responded. On 19 October, for example, a reported 268 companies moved their offices out of Catalonia leading up to Prime Minister Rajoy’s announcement to trigger Article 155. A further 1,300 small and medium businesses (SMEs), or one percent of the total number of SMEs, have also reportedly announced their intentions to exit Catalonia. Likewise, Caixabank, Catalonia’s largest and Spain’s third-largest bank has announced its transfer to Valencia, as has Cellnex, Spain’s telecommunications firm, which plans to relocate to Madrid. In addition, there was a 22 percent decrease in tourism to Catalonia in October 2017 alone. The swift response by business suggest that a continued stalemate - possibly punctuated by a Spanish government clampdown and further violent unrest - is only likely to prompt further commercial downturn in the country.