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Just because something makes perfect sense doesn’t mean it’s possible. But Catalan leaders have massive economic powers at their disposal and a Spanish government that is weaker than it would like to be.
Albert Macia is on the board of an IT multinational. Joan Cabanas is an industrial engineer doing project management in the electrical insulation sector.
After a long career working for assorted multinationals, Joan Canadell is now a consultant. And Ramir de Porrate runs a successful radio frequency systems startup.
The four are leading lights in the Catalan Business Circle, an employers organisation uniting 700 small and medium-sized firms who argue – with figures to back it up – that independence is now the region’s best and only option.
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.”
Worse, says Amacia, central government policies are not suited to Spain either. “They don’t know about competitiveness, they don’t know about profitability,” he says. “They don’t invest productively or sensibly. For 35 years we’ve been waiting for a freight rail link from Valencia and Tarragona up to the rest of Europe. Instead they build high-speed trains to Galicia.”
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 Catalan economy, says De Porrate, is “compressed – cramped by the fiscal deficit with Spain, the lack of infrastructure, the fact that everything Madrid spends is invested politically, like bailing out Bankia, rather than economically. Profitability is not a word Madrid understands.”
Freed of these shackles, the men argue, an independent Catalonia could afford to promote economic growth by investing properly in infrastructure, cutting corporate taxes (and high company social security contributions) and kick-starting currently non-existent lending to small and medium-sized businesses.
The credit ratings agencies would see it meant business. What’s more, says De Porrete, it should attract a high score from the outset: with a GDP of €200bn and a total debt (combining the autonomous Catalan government’s own debt with a proportional chunk of the Spanish state’s, which realistically an independent Catalonia would have to assume) of €160bn, its debt ratio would be around 80%: below the EU average.
“An independent Catalonia would have a reasonable debt level, and with income higher than debt it would have the capacity to repay,” he says. “Who would not lend to it?”
Perhaps more controversially, the group believes independence would be good not only for Catalonia but, longer term, for Spain and for the EU. “As soon as Spain doesn’t have the Catalonian powerhouse, it will have to change,” says De Porrete. “It will have to set about serious reforms, become efficient, think about productivity and profitability. You can’t build an economy on tourism and the construction sector.”
And a more efficient and competitive Spain, they continue, is clearly good for Europe and the euro. “An independent Catalonia is a huge opportunity, for Catalonia of course, but also for Spain, for Europe – for London,” says Cabanas.
Nor do they believe that when it comes to it, Spain will block independence or veto an independent Catalonia’s entry into the EU. Catalonia, they say, has two vital bargaining chips: “Some 70% of the rest of Spain’s exports pass through Catalonia,” says De Porrete. “Once we leave, the first country who’s served by us being in Europe is Spain.”
And as long as Spain does not recognise Catalonia, “Catalonia will not assume any of Spain’s debts,” says Cabanas. “With 20% of its GDP gone, how else can Spain repay its debts? Madrid will have to recognise us.”
In fact Catalonian independence, these men argue, could and should be the EU’s solution to part of its southern Europe problem. They have no doubts – none whatsoever – that it will come. “It’s unstoppable now,” says Canadell. “I think in one or two years, max. And within a year we’ll have a declaration that we are heading for independence. You wait.”