Barça-loners: Will breakaway Catalonia fracture Spain? (THE GUARDIAN 19-11-2012)

The red and yellow striped flags of Catalonia bobbed about giddily as Lluis Recoder delivered his message: despite the crisis gripping Spain, Catalans could be as rich as Scandinavians. "If we were a European state we would be seventh in Europe in per capita income, after Denmark and Sweden," the Catalan nationalist and regional government minister declared, to an enthusiastic response. His figures are based on wealth calculations that can look skewed. (Struggling Ireland is, for example, richer on a per capita basis than thriving Germany). But they are seen here at least as proof that Catalonia – a region of almost eight million people – could be not just viable but also wealthy if it were to separate from Spain. "It is very viable," said Artur Mas, the Catalan president, in an interview with the Guardian. "What is not viable is the current situation." The Catalan separatist campaign will come to a head this weekend in an election that will in effect serve as a plebiscite on the region's future in Spain. It is a long-running affair, borne of historical and cultural factors that have persisted for centuries. But you do not have to scratch too hard before you get to the principal bone of contention in crisis-ridden Spain: money. Spain is suffering its most agonising economic decline in decades. Catalonia has not been spared. But it still claims it subsidises the rest of Spain to the tune of €16bn a year. This money, equivalent to 8% of regional GDP, would dig Catalonia out of a debt and deficit hole and provide greater investment and a better welfare state, many believe. "Obviously there would be transition costs, but in a few years Catalonia would be able to develop its potential," said Elisenda Paluzie, an economist and separatist supporter at the University of Barcelona. "Catalonia is completely feasible as an independent state with regard to its treasury," said Núria Bosch and Marta Espasa in a study that looks at how the figures would work if Catalonia simply assumed its share of Spanish government spending, and if independence brought no extra costs or damage to the economy. Others are not convinced. "There would be an exodus of companies to Madrid and other European capitals," said Juan Rubio-Ramírez, a Catalan-born economist at Duke University in the US, in La Vanguardia newspaper. Some even foresee a consumer backlash against Catalan products, like the damaging boycott of cava sparkling wine in 2004 sparked by separatist opposition to Madrid's attempts to host the Olympics. Benefits there might be, but there would be costs too. Confecciones Joti, a small textile company that makes work clothing in Vilanova d'Escornalbou, reported last month that a client company had already cancelled an order because of Catalan politicians' "contempt" for the north-western region of Galicia. As Catalonia prepares to vote in an election that could determine not just its future, but the shape of Spain, people in Madrid give their views Link to this video Millions of Spaniards view the increasingly strident calls for self-determination in Catalonia with alarm. This is a country with form. When the region last declared its own state in 1934, Madrid answered by declaring a state of war. Separation would provide an ominous precedent in a nation where the increasingly weak centre has spent decades handing new powers to its headstrong regions. "We have had four civil wars in the past 150 years, so this is no joking matter," Socialist party senator Marcelino Iglesias told a rally in Girona. Mas has said that his current drive towards independence, even if it fails, will be peaceful. "It will either be done peacefully, or it won't be done," he told the Guardian. But Mas has pledged to hold a referendum and the foreign minister, José Manuel García-Margallo, has warned that the government would get the constitutional court to ban it in advance. "That would be illegal. In legal terms, it would be a coup d'état," he said in a recent interview when asked what would happen if Mas ignored a ban. "There is no right to self-determination and no right to secession." Members of the Mariano Rajoy's governing conservative People's party worry that Catalan independence will signal the end of Spain. "People talk about Catalonia as if it was a limb that could be amputated and the rest of Spain would survive," the justice minister, Alberto Ruiz-Gallardón, told the ABC daily in an interview. "But what the independence of Catalonia really means is the disappearance of Spain as a nation." The problem is not just Catalonia. Elections were held in October in the northern Basque country, where the blood spilt by Eta over four decades kept separatism in the headlines but stopped many peaceful Basques supporting it. The vote produced a landslide victory for nationalist and separatist parties, who jointly took two-thirds of the seats. They included EH Bildu, a separatist coalition including Eta's former political front, which took a quarter of the votes, and the Basque Nationalist party (PNV) – divided between a separatist wing and a part that wants to remain Spanish – which won one third. One in five Basques are unwavering separatists, according to a recent poll by the state's Centre for Sociological Investigation. But another one in five say they would be inclined to support independence. That may grow on the back of referendums in Scotland and Catalonia, said a PNV senator, Iñaki Anasagasti. "Catalonia is smoothing the way," said the senator, who sees his own party's long-term aim as independence. If Catalonia and the Basque country left, Spain's economy would shrink by 25% and per capita wealth by 5%. Motorway and rail routes into Europe would also pass through the new states. "That is why they could not block our future membership of the European Union," said separatist writer and columnist Isabel-Clara Simó. "The problem for Spain, which is what limits the ability of the prime minister to be flexible, is the dynamics of the breakdown. Once Catalonia is out, the burden on the other rich regions increases, and they will want out," says Luis Garicano of the London School of Economics. "So for Spain the prospect, without Catalonia, is complete disintegration of the country." This would be a tough moment to try independence. Catalonia's economy is shrinking at 1.1% a year, unemployment is 23% and the local government's debt has been given junk status by ratings agencies, obliging it to ask for a humiliating bailout of its own from central government. It already has the highest regional debt in Spain. But ironically it is this privation that is fanning separatist urges. As fierce austerity measures hit health and school services, anger has helped tip a majority of Catalans quizzed by pollsters into backing independence, with support leaping from 43% to 57% in 15 months. "More than 80% think Catalonia is underfunded," said Jordi Sauret of Feedback pollsters. "That idea is now deeply entrenched." Anger at the financial situation comes on top of popular fury generated by a 2010 constitutional court ruling that struck out key parts of an autonomy charter approved by Catalans at referendum. "The key moment for me was the constitutional court ruling," said Mas. "When I saw how they humiliated us with that sentence I said: 'This has no future.'" But a separate Catalonia would have much work to do to create the institutions of state. Catalonia lacks its own inland revenue – something that Mas unsuccessfully tried to demand from Madrid this year. That would complicate tax collection, with economists predicting a loss of up to €1.7bn. "If you have your own treasury then the costs are much less," said Paluzie. But a state is not just money. Catalonia, which already has its own police force, would need a central bank, a diplomatic service and a dizzying number of other agencies, regulators and institutions. Then there are more nuanced questions. What league would Barcelona football club play in? And would the new country get EU and UN membership? And what about an army? Mas says it does not need one, but would still want to be in Nato. "We don't want armed services," he said. "Our best scheme is to pay for our defence." That assumes Nato would be prepared to protect a Catalonia that was not prepared to spill the blood of its own soldiers. For now, Catalan separatists are eagerly awaiting Sunday's vote, after which Mas has promised to build a wide consensus of support for a referendum to be held by 2016.