The Catalan independence movement has created an illusion of economic viability based on a foundation of deceitful statements, half-truths and risky suppositions that the facts are dismantling day by day. The basic pillars of the secessionists’ economic fantasy cannot be sustained any longer: Brussels cannot accept the integration of an independent Catalonia in the euro zone – if secession does take place, the region will be a country outside the EU with the subsequent rise in prices of its products in the European markets. At the same time, it will be unable to participate in the European Economic Area without the unanimous approval of all EU member states; nor will it be capable of sustaining satisfactory public financing with its credit rating currently at junk status and no expectations that this will improve after secession.
The basic pillars of the secessionists’ economic fantasy cannot be sustained any longer
It is very difficult to avoid the impression that independence leaders are significantly sweetening the reality of Catalonia to keep up, in the eyes of Catalan voters, the shameless delusion of a prosperous independent republic happily unburdened by the dead weight of Spain. The recent report by the Generalitat (The situation of the economy in a Catalan state) is a compendium of economic distortions and a priori presumptions that deny reality. Catalan GDP is not equivalent to Denmark’s, and does not exceed the European average by 14.5% (only by 7%), nor will an independent tax office be able to collect €24 billion more. In fact, it is clear that tax collection will probably drop dramatically because of business flight and the economic slowdown caused by a fall in consumption and economic activity in a scenario of uncertainty.
On the other hand, the proven facts (the impossibility of remaining part of the EU; headquarter changes by over 1,300 Catalan businesses, often in a definitive way, as is the case with the bank La Caixa) should be enough for separatist politicians to drop the talk about a phantasmagorical economic viability. A likely HQ switch by the carmaker Seat would additionally have serious consequences on employment. Even if we admit that any European region would be viable in the long term as an independent entity, what matters is not viability as an abstract concept, but the volume of the transition costs – which the Catalan economy cannot handle – and what people’s incomes would look like in an independent republic. Considering the effects of secession on the Catalan trade balance and on its financial capabilities, it seems clear that per capita GDP would contract sharply and rapidly.
What matters is not viability as an abstract concept, but the volume of the transition costs
The deception that’s been created around a wealthier Catalonia freed from Spain (a derogatory, supremacist rhetoric aimed at the entire country) has intellectual authors who sit in the Catalan government and institutions: and who also live within the support groups that disseminate the economic narcotic that fuels visions of a Catalan Arcadia, independent and free to “newly design the institutions and the rules of the game,” now happily rid of an inadequate Spanish institutional system and able to generate wealth “based on productive activity.” These and other falsehoods are being used to deceive Catalan citizens. And the deceit will go on for as long as the secessionists’ economic lies are not held up to the implacable realities of Europe and business.