CATALAN INDEPENDENCE UPDATE

Remember the Catalonia province of Spain?  Up in the Northeast corner, and containing, among other significant locations, the city of Barcelona?

Remember how there was an illegal vote for independence from Spain, and a majority said we’re outta here?  And how Spain stopped the secession in its tracks and caused the vote’s progenitor, Carles Puigdemont, to flee the country and operate from Brussels, Belgium?

Well, it’s back.  In a big way.

From Jacob Bojesson’s article at dailycaller.com:

The Catalonian independence movement looks set to secure a big victory in a key election for the region’s push to secede from Spain.

The Spanish government called a snap parliamentary election in the region after Catalonian leaders held a banned independence referendum. Left-wing parties ERC and CUP are on track to win 70 seats, an absolute majority in the 135-member parliament. Centrist pro-unity party Ciudadanos received the most votes, but fell short of being able to form an administration.

“The Spanish state has been defeated,” ousted Catalan President Carles Puigdemont said as he claimed victory. “(Prime Minister) Mariano Rajoy has received a slap in the face from Catalonia.” 

Puigdemont has campaigned from Brussels, where he fled after Spanish authorities took legal action against Catalan leaders. Local politicians face charges of rebellion, sedition and embezzlement, crimes that could land them in prison for up to 30 years.

This attempt to secede by tearing the country apart, is succeeding in a way.   The article goes on to point out that, in the wake of the original vote, something like 3,000 companies have moved their headquarters elsewhere and foreign investments are down 75%.

How important is Catalonia to Spain – and Spain to Catalonia?  Here’s some insight from Sofia Bosch’s article at CNBC:

While Catalans only account for about 16 percent of the Spanish population, Catalonia makes a hefty contribution to the overall Spanish economy, making 223.6 billion euros ($262.96 billion) a year, according to the regional government. This is around 20 percent of its total gross domestic product (GDP). Larger than the contribution that California makes to the whole United States.

Using figures from official European and Catalonian organizations,Business Insider claimed earlier this year that the region would quickly gain about 16 billion euros yearly in the case of a split, as they would no longer have to pay taxes to Spain. This would then result in a loss of about 2 percent to the Spanish GDP (gross domestic product) yearly.

At the same time, Catalonia could take a potential hit, as 35.5 percent of Catalan exports are to the Spanish market. Catalonia would also have pay to create new state structures (embassies, central banks, etc.) which carry a large price tag.

 

Look, neither I nor anyone else knows how this is ultimately going to play out.  But, whatever happens, I don’t see any good result for Spain.   It either loses what arguably is the most important part of the country, or keeps it and very well might have a civil war on its hands.

Tell me:  if you were a business owner or a foreign investor would you be interested in  casting your lot with Spain now?  I doubt it.

Of course there’s always that big country across the Atlantic which just made corporate activity and foreign investment significantly more beneficial…….

…..just saying.

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