Catalunya is making moves to set itself up for a vote on independence from Spain. Independence is by no means a guarantee and the situation is a mix of history, economics and politics the implications of which will ripple through the European Union. (More)

On November 26 Catalunya’s elections resulted in President Mas and his CiU pro-independence party winning 50 seats, down from 62 previously. The pro-independence Esquerra party moved into second place with 21 seats. The Socialists and the People’s parties, both opposed to independence hold 39 seats between them. 68 votes are required to call for a referenda vote. The potential for Catalunya’s independence from Spain raises all sorts of issues for the European Union and the rest of Spain. To understand the desire for independence, one needs to understand a bit of history.

A Brief History:

Living with history is not something most Americans experience or appreciate. At 236 years old with a penchant for tearing down ‘old’ buildings we tend to favor the new and improved. Understanding Catalunya and their struggle for autonomy and independence from Spain which goes back centuries stresses the American imagination.

The city of Barcelona was founded in the third century B.C.E. It has a great harbor surrounded by a plain and then mountains. It’s geographical setting was perfect for both trade by sea and the protection of the mountains. It became the capitol of Catalunya. Through the centuries Catalunya was either ruled by or visited by Greeks, Romans, Visigoths, Aragons, Habsburgs, Bourbons, the Holy Roman Empire and the Spanish. They have fought for their independence several times throughout their history. The Catalan language emerged sometime between the “11th and 14th centuries.” Only Francisco Franco tried to abolish the Catalan language which obviously didn’t go over well with Catalans.

Catalans are a scrappy and often progressive people. Labor in Barcelona led the way.

In 1919 in Barcelona, after a 44-day general strike with over 100,000 participants had effectively crippled the Catalan economy, the Government in Barcelona settled the strike by granting all the striking workers demands that included an eight-hour day, union recognition, and the rehiring of fired workers. Spain was the first country to pass a national eight-hour day law.

The recent political history gives us a hint of the struggle for autonomy and independence.

After Franco’s death in 1975 and the adoption of a democratic constitution in Spain in 1978, Catalunya recovered and extended the powers that it had gained in the Statute of Autonomy of 1932 but lost with the fall of the Second Spanish Republic at the end of the Spanish Civil War in 1939. The region has gradually achieved more autonomy since the approval of the Spanish Constitution of 1978. The Generalitat holds exclusive jurisdiction in culture, environment, communications, transportation, commerce, public safety and local government, and shares jurisdiction with the Spanish government in education, health and justice. In all, the current system grants Catalunya with “more self-government than almost any other corner in Europe.”

Before we leave the history we need to imagine walking through Empuries on 3/4″ square ceramic tile floors laid by the Roman conquerers and exposed to the elements for a couple of thousand years. The tiles and the grout are still perfect. We need to imagine a 60 meter tall statue of Cristobal Colon (Columbus to us) arm pointing out to sea standing watch over the harbor in Barcelona. If America is free, why not them? We need to imagine La Sagrada Familia started in 1882 by Antonio Gaudi and not expected to be finished for another 30 to 80 years. Ah patience. We need to imagine an ATM inserted into the street facing wall of a building from the 14th century. History just feels different in Barcelona and Catalunya than most Americans can grasp. Independence or the desire for it is woven throughout their history.

The Economics of Catalunya and Spain:

Here’s a summary:

They cite, first, the stats: Catalonia represents 8% of Spain’s territory, 16% of its population, 20% of its GDP, 25% of its tax revenues, and 35% of its exports (and 45% of high-tech exports). In return, it receives (in theory; the real figure may be much less) 11% of government investment.

Beyond the figures, says Cabanas, “the real problem is that our economic model is so different to Spain’s. Catalonia’s companies tend to be small, innovative, export-oriented. Spain’s model is big, listed companies, often once state-owned, and still with strong connections to the state. So Madrid’s economic policies are just not suited to us.”

Some Statistics:

GDP in euros for ’08 shows Catalunya with 212.953 and Spain with 1.087.749. GDP in Euros for ’11 shows Catalunya with 210.150 and Spain with 1.073.383. The year end unemployment for ’07 in Catalunya was 6.5% and in Spain, 8.3%. The 12/12 unemployment estimates are 22.56% for Catalunya and 25.02% for Spain. Youth unemployment is estimated to be as high as 50%.

Over the past 10 years, the businessmen claim, Catalonia has paid nearly twice as much into Spanish coffers as the EU. “It’s not that we don’t want to contribute,” says Canadell. “But we don’t want to contribute to a model that doesn’t work, and that is counter-productive to our model.”

The argument for independence says that Catalunya has a modern, more hi-tech and more agile business community and that Spain has a more old fashioned and inefficient model. Separatists argue that the rest of Spain won’t modernize until forced to by the exit of Catalunya. An American can almost see the blue states telling the red states that they will only get back from the Federal government what they contribute in taxes so they learn to get things right.

The business argument for staying with Spain speaks to the uncertainty of or the low probability of a smooth transition and the interdependence of many businesses with the rest of Spain. The rest of Spain is Catalunya’s biggest trading partner. Since Madrid is totally opposed to letting Catalunya go, it is unlikely to be an amicable split.

The Implications of Independence:

* To the extent that the desire for independence is a desire to escape austerity, more protests can be expected. Remember the general strike in 1918? September 11th is Catalunya’s La Diada or national day. The Catalan police say 1.5 million people took to the streets of Barcelona to demonstrate for independence. The Spanish civil police estimated 600,000. One wonders if the demonstrators can be contained. Heck, in Barcelona the locals take to Las Ramblas every night for a stroll and to visit with their friends and neighbors. Considering the high unemployment of young people and their frustration with their job prospects, it’s not hard to imagine them taking to the streets.

* Austerity as a solution to the European fiscal crisis becomes less popular every day. The IMF calls time on austerity says this:

The move came after IMF Chief Economist Olivier Blanchard admitted the Fund’s calculations of the impact of austerity had been seriously wrong.
The Fund’s World Economic Outlook, published on Monday, contained a serious revision of the way its experts calculate the so-called “fiscal multipliers”.

If Europe saves its financial systems by wrecking the social fabric and harming individuals, it risks more independence moves like the Catalans.

* Scotland’s Independence from England will be voted on in late 2014. British Prime Minister David Cameron and Alex Salmond, first minister of Scotland signed The Edinburgh Agreement on October 15, 2012. Catalans may look to this agreement as a path for their future independence. Other now states, formerly countries may also see independence as a possibility.

* There are implications for the future of the European Union. There are no current provisions for handling Catalan independence other than asking them to get in line behind other countries seeking to join the union. If Spain is in need of a bailout now, a weaker Spain minus Catalunya would likely need a bigger bailout.

In Summary:

The Catalan government and President Mas have until late 2014 to make their case for independence or to use the threat of independence to leverage better economic agreements with Madrid. The outcomes are uncertain. For a nation that has been both independent and oppressed throughout its history, independence lives in the heart of most Catalans. It bears watching.