Home > Uncategorized > On Spain, Catalunya and former Yugoslavia

On Spain, Catalunya and former Yugoslavia

Update 29-10-2017: in 2014 this important Voxeu post from Andrés Rodríguez-Pose and Marko Stermšek about the countries formerly called Yugoslavia was published. The data fully endorse the view I express: secession is economic folly but trajectories matter a lot. Their conclusions are, considering the data, imo too positive. In 2011 only one country, Slovenia, had significantly surpassed the 1985 level of production. But even Slovenia, which had a relatively very peaceful transition, experienced a 25% drop of GDP during the years of secession (others had drops of about 50% or even more). Many others in 2011 still had levels of production way below what was reached in 1985: 25 years of stagnation (and remember: economic growth is also better healthcare, better housing and more years of education).

  1. What I did not expect: In my lifetime I’ve seem countries in and around Europe disintegrate. The Soviet Union. Yugoslavia. Czechoslovakia. Iraq. Syria. And, work in progress, the UK. Spain seems to be next in line. In many fo these countries this process was accompanied by war.
  2. Vaclav Havel was the last president of Czechoslovakia and strongly opposed splitting up. Being a wise man, he resigned instead of using violence when he saw that it had become inevitable. Thanks to him we know that splitting up a country can be a relatively orderly and, especially, peaceful process.
  3. Spain and Catalunya are heading the other way.
  4. At this moment, provoking the opponent is a winning strategy for radicals at both sides which means that the radicals have all reasons to ‘cooperate’ with the other side when it comes to this.
  5. Many Catalunyan companies have already moved their headquarters out of Catalunya
  6. Soon, the despised tourists will tay away. Yes, the number of overnight stays of tourists in hotels in Barcelona quadrupled in a few decades and such increases do change cities into theme parks. Not funny. But what if they stay away? Even despite Multi year double-digit growth of tourism, unemployment in Catalunya is still high.
  7. Foreign companies will move away, too.
  8. Don’t forget that in an economic sense, Catalunya is a city-state, centered on Barcelona! Romantic ideas about small scale organic family farms and grocery shops which will save the day are wacky – these won’t buy you modern healthcare, let alone a Volkswagen and can’t sustain a city economy.
  9. Spain, backed by the EU and the USA, has every incentive to increase such economic havoc, for instance by reducing flows of government money. Catalunya may be a net contributor to the Spanish government but that does not mean that there are no gross flows which can be halted. Brussels will follow suite.
  10. Mind that as Catalunya won’t be a member of the EU its citizens will not have free rights of entree into the EU labor market.
  11. Even if Catalunya is a net contributor, it still profits from the 4,5% budget deficit of Madrid.
  12. Mind that after Yugoslavia split up its constituent parts experienced rates of inflation of 30, 40 and even almost 50% (Kosovo). Brussels did not come to the rescue (and citizens of these states are basically not allowed to work inside the EU). If companies move away, tourists stay away and money from Brussels and Madrid is halted such rates of unemployment are not inconceivable. Brussels won’t come to the rescue.
  13. Catalunya will, for a time, probably still use the Euro. But its banks will be cut short from the Target2 system which enables international payments. International payments will be, ahem, difficult. It does not have to be this way, but Rajoy does hold all the cards. All of them. Catalunya is at his mercy.

I can go on. Nothing good will come of this. Rajoy will have to ponder about the wisdom of Vaclav Havel. Catalunyans will however have to ponder about the possibilitiy of 40% unemployment. And the relative merit of being a paid guardian of a themepark instead of an unemployed citizen of Catalunya.

  1. October 28, 2017 at 11:43 am

    The multi-ethnic countries suffer integration. India will also join the list because of Modi’s penchant on narrow religious policies.

  2. Nick
    October 28, 2017 at 1:14 pm

    so capital and democracy are contradictory – Money is King and we are alive ONLY to serve the Sovereign…a good life defined as material comfort…yup we are truly fucked xx

    (but actually the state and capital co-evolved – they could not exist without each other, to attack one (the Spanish ‘national’ state) is to attack the other (international capital) – see Arrighi The Long 20th Century 2010)

  3. Julian Wells
    October 28, 2017 at 1:20 pm

    It’s true; the post-fascists in Madrid, and their facilitators in the EU, have many ways to punish Catalonia — if we let them.

    Especially disappointing in this is the spineless attitude of the European Parliament, which has nothing to say about the Commission’s collusion in Spain’s flouting of Article 1 of the UN Charter (“To develop friendly relations among nations based on respect for the principle of equal rights and self-determination of peoples”).

  4. patrick newman
    October 28, 2017 at 1:33 pm

    The declaration of independence is basically meaningless without the cooperation of the Spanish government. The latter could give it meaning if it over reacted and precipitated support even from those in Catalunya who wish to remain with Spain. Madrid should tread carefully and think out of the box!

  5. lobdillj
    October 28, 2017 at 4:23 pm

    I have wondered how Catalunya would have a healthy economy as an independent nation. I also wonder what motivates Spain to prevent secession.

  6. October 28, 2017 at 6:04 pm

    All that demonstrate the ignorance of the problem out of Spain. First, is not a rational problem, of costs & profits. It is an emotional one, very emotional. Second, separatist is an (ample) minority. The majority of Catalans have no problem been Spaniards. They will rest in Spain.
    Third, The independence would be at a high economist cost to Catalonia, as the post author explain.
    Fourth, Government cannot permit the independence of Catalonia because the democratic state born in 1978 after Franco’s death will crumble, and what about the catalans that will rest in Spain – the vast majority?

  7. October 31, 2017 at 10:32 pm

    Sorry, but No. 2 is not accurate (and Alexander Dubček also strongly opposed the breakup of Czechoslovakia). Václav Havel had little or nothing to do with the peacefulness of the split. There was a “velvet divorce” because Czechs and Slovaks wished that; it did not occur to people in either nation to fire shots. For that matter, a majority of both arguably might have been opposed to the split, which was forced by a handful of Slovak nationalists who had gained power in Bratislava.

  8. November 1, 2017 at 11:52 am

    Economist is nearly right. It is not so much multi-ethnic countries “suffer integration”, as those on the periphery of [human-scale] large countries governed from the capital. Not only Scotland but Wales and the north of England “suffer” from investment being London-centred to the tune in terms of current railway investment of c.£300 billion compared with c.£87 billion for the rest of Britain, most of this earmarked for HS2 communication with London. With more financial freedom Scotland is living more sensibly if not more comfortably than the rest of the UK, but the same will only be true of the UK outside the EU if the London political elite wake up to the truth of Nick’s comment, to which Julian and Patrick’s are mere corollaries.

    Lobdillj might reflect on whether the world’s economy as a whole is healthy, and whether Catalunya’s retaining its relative sanity might depend on a degree of financial as against human isolation. I agree with Miguel, the problem is an emotional one, but not with Merijn’s interpretation of that as fear of discomfort: this is about Gaude expressing the desire to think outside the box. What happens when belligerent financial or religious bigots are permitted to control the likes of the EU and India hardly bears thinking about, so the hopeful example of Systemic Disorder’s “velvet divorce” in Czechoslovakia, and Julian’s reminding us of Article 1 of the UN Charter, represent lines of thought which need to go viral.

    • robert locke
      November 1, 2017 at 4:35 pm

      The problem is nineteenth century nationalism, when in their drives for national statehood, dominant nations incorporated minority elements in the political entities they created and they do not want to give them up. There are lots of examples, Bismarck’s united Germany forced Danes, Poles, and others to live in a German state, France, celtic peoples (e.g. Britanny) were forced into France. I remember a Breton, who studied at the Institute britanique in Paris, telling me he wasn’t French, which somewhat startled me. If the various nation states would melt into the European union, various groups could easily join the union.

  9. November 2, 2017 at 10:48 am

    Should Spain approve a referendum like in Scotland, they probably had won. As in Scotland

    But we are governed by PP party which continues the ideology of Franco (you’ll know that there is a giant grave in Valle de los caidos filled with stolen cadavers, and constructed with slave republican prisonners) and all the imperial ideology. As of today 114.000 “missing” people lie in unknown graves through all Spain. Spain is not responding to International law (UN) in this matter.

    They (PP) “trimmed” in 2010 sentence by the Constitutional court (with previously manipulated composition: not renewal of members,…), important aspects of the current new Catalan estatute already approved (2006) by the Spanish and Catalan parliaments and already approved also in referendum in Catalonia.

    No proposal have been offered to Catalans since then, no matter how important numerically were the seven last demonstrations in the National day of Catalonia (11th september) You may call Catalans everything except impatients.

    Our national day remembers the fall of Barcelona in 1714 and the suppression of sovereign Catalan govenment together with Catalan language forbidden.

    Let Catalan people maintain peacefully, its own culture.

    We are no going to retreat and will protest for a justice which is not fully independent: menacing with 30 years in prison to our legitimate president, today in Belgium

    TCargol (alias)

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