Referendum in Europe

The referendum held in northern Iraq garnered widespread negative reactions from the international community, while it was supported by few players, with one of them being Catalonia. In fact, another debate regarding independency that the world is watching is rising in the West. As you know, Catalonia wants to separate from the Spanish administration with a referendum this Sunday.

The autonomous government of Catalonia, centered around the favorite capital city of Barcelona, with a population of 7.5 million, has critical significance for the 17-region Spain. So, Madrid is experiencing a war of nerves which could exceed normal tensions. While the Constitutional Court of Spain has ruled that this vote is “illegal and invalid,” the government is shaking its finger at Catalonia’s administrators, warning them about going to polls. In fact, raids, arrests and detentions are already taking place. However, despite all that has happened, Catalonia, which is patrolled by security forces, was still very much determined when I was writing this article on Thursday afternoon.

"I am calmly and strictly saying that this referendum will not happen," Spanish Prime Minister Mariana Rajoy said.

Independent of EU as well

On the other hand, the rising tension in Madrid is troubling the EU too. Although Brussels avoids making harsh statements, it obviously supports unity and stability in Spain. This is within the bounds of expectations given that similar feelings are rising in the continent.

To explain with a few sentences, while the European Parliament speaker said “it is their own business, they can start from scratch," Juncker noted that "independence will accompany the necessity to apply to the EU again like every new candidate."

Therefore, if Catalonia declares its independence in some way, it will have an odd status independent of the EU, in other words, not only of Spain but also of its region. This includes building borders with EU countries and being deprived of trade relations and the euro. Even if it decides to enter the EU later, obviously, the process will not work positively while Spain is an EU member.

From this point of view, a possible case of independence will neither benefit Catalonia nor Spain in an economic sense.

Económico

We are talking about a large economy that constitutes nearly one-fifth of Spain’s GDP. Catalonia is also a prosperous region in the country, with one of the highest incomes per capita. In addition to the Mediterranean, it has flourished in various sectors, from tourism to industry and is interested in R&D and technology.

Therefore, Catalans who support independence believe that they are strong and large enough to survive as an independent country. But it is impossible that a secession will be painless. Indeed, an independent Catalonia will be waking up to an environment where its economic relations will sever both with Spain and the EU. In this case, Barcelona will inevitably face sanctions from Spain and push the great companies, banks and potential investors it hosts to scruples. Also, institutional structures and regulations that will be needed in this context will lead to another loss in the medium and long run.

Undoubtedly, independence that might rise from Sunday’s referendum will economically affect not only Catalans, but also Spain. After all, Madrid has close ties with Barcelona in a wide range of areas, from exports to taxes.

Caótico

Surveys have been trying to predict the result of this chaotic situation for a while. Assumptions of various companies have not revealed a strong independence decision or a clear outlook. Also, a considerable number of Catalans think that they need to at least vote. It is not known how the Spanish government’s pressure of the referendum in the recent period will incite national feelings. If independence is accepted, Catalans plan to declare independence within 48 hours, while Spain says that it reserves the right to axe the referendum or a possible independence which will follow. In short, Spain is undergoing hard times in terms of its unity and independence.

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