Image: Wikipedia / Màrius Montón

Keeping up with the Catalonians

An ‘illegal’ referendum vote, a deposed president in rebellion and hundreds of thousands of defiant protesters in Catalonia; these are the current events unfolding in Spanish politics, that often seem to resemble fiction rather than reality.

Mr. Puigdemont now faces a possible arrest warrant and jail sentence on the grounds of rebellion…

The whirlwind of international media news covering the events make it difficult to keep up with the exact order of developments. The latest twist in the crisis was the invoking of Article 155 of the Spanish constitution by the country’s president, Mariano Rajoy, on October 27th. The Article grants the Spanish government direct rule over the autonomous region of Catalonia, a result of Catalan President Carles Puigdemont’s reluctance to agree deals that Mr. Rajoy’s government put forth. Officials in Madrid, Spain’s capital, have labelled the informal vote on the independence of Catalonia (where 90% voted in favour of independence, albeit with a 43% turnout) “illegal”. As a result, Mr. Puigdemont now faces a possible arrest warrant and jail sentence on the grounds of rebellion, while still campaigning to “continue working to create a free country”.

Following the dismissal of the Catalan government, Mr. Rajoy proposed an unconventional regional election for December 21st. Mr. Puigdemont and his supporters are left with two options: fight the direct rule and run for election or cede to the demands of the Spanish government. The calls of “viva la republica Catalana” from passionate separatists on the streets of Barcelona suggest certain parts of the Catalan population have not given up hope for Mr. Puigdemont to return.

There could be significant economic backlash of Catalan independence on the region…

Arguably, Mr. Rajoy could have tamed the situation by not responding to ‘bait’ of the separatists’ claim for independence. Instead, Madrid sent the ‘Guardia Civil’, a military force, to Catalonia. This lead to wide-reported clashes between the military police and pro-independence protesters. The forceful nature of Mr. Rajoy’s approach only fuelled pro-independence sentiment.

The Catalan Crisis continues to confirm fears within the European Union (EU). At the centre of this fear are referendums on independence. After the possibility of ‘Grexit’ grew in prominence following the Financial Crash, ‘Brexit’ became a reality. Then, the resurgence of far right parties, who in most cases ran on euro-sceptic ideologies in elections, threatened to severely impact countries like France and the Netherlands. In that light, the EU faces two threats to its continued existence; not only are committed members displaying internal signs of doubt of their membership in the EU, regions too are weighing up the options of claiming independence from their respective countries. Some regions with recent strife include Bavaria, home to 15.6% of the German population, and Lombardy, one of Italy’s richest regions and home to 17% of the country’s population.

The Catalan Crisis is by no means over, and the uncertainty on both sides adds to the difficulty of achieving progress…

There could be significant economic backlash of Catalan independence on the region. Catalonia has a significant contribution towards Spanish Gross Domestic Product, a measure of wealth, owing to its prowess in tourism and industrial exports. However, its establishment as a Republic would evoke its separation from the European Customs Union. In fact, over 1,700 companies, including Spanish banking giants CaixaBank and Sabadell, have relocated headquarters to other regions of Spain over the past month with the threat of an immediate forced exit from the Eurozone looming over the wealthy Spanish region. The prospective ‘Catalan Republic’ would face great challenges and uncertainty if they were to abruptly separate from the rest of Spain, as the prospect of operating a central bank infrastructure outside of the EU Customs Union is difficult. Moreover, there would be significant doubt about whether the new Republic would remain in the European Currency.

The Catalan Crisis is by no means over, and the uncertainty on both sides adds to the difficulty of achieving progress. One outcome would find Catalonia under the strict rules of Madrid, whereas another would distinguish a Spain suffering from the loss of its economic ‘crown jewel’ and a newly formed republic at economic odds. Whatever the case, both sides stand to lose.

 

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