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Catalonia: Tiger in a cage

When the days of the fall of the Berlin Wall gave birth to democracy in the countries of Eastern Europe, the West cheered the people who rose for their freedom. From the ruins of the Soviet Union, Yugoslavia or Czechoslovakia, the ancient nations like Estonians, Latvians, Lithuanians, Croats, Slovenians, Montenegrins and Slovaks emerged.

Catalonia's autonomy, however, is in a different position. The EU is indifferent and the EU summit claimed that Madrid must solve the Catalan rebellion itself. Spanish Prime Minister Mariano Rajoy chose guns of the heaviest caliber. Catalonia, headed by Carles Puigdemon, has first been given the ultimatum and then Madrid launched the procedure of administrative control of the region without any sign of hesitation.

In this respect, Rajoy is lucky in a sense. He heads the minority government, but the majority of the parliament in Madrid will back Rajoy and vote for triggering the Article 155 of the Spanish Constitution on the issue of the Catalan separatism on Thursday, October 26. This will allow Madrid to make administrative control over Catalonia. All because Spain without Catalonia is like FC Barcelona without Messi and Suarez at the same time.

Speaking in numbers, Spain would lose 18 percent of the population and a quarter of the country's GDP. The Catalan economy is the engine of Spain, and people from all over the country, but also from South America and other EU countries benefit from Barcelona. It does not matter whether companies have moved their headquarters outside Catalonia under the influence of uncertainty because a large part of them will come back home after the picture gets clearer.

If Puigdemont wants to be the father of the nation, he must be at the forefront of civil resistance against the control of Catalonia by Madrid. So far, he has called for dialogue and used the unilateral declaration of Catalan independence only as a threat. In cosmopolitan Barcelona, the situation is less clear. Judging by the size of the crowd in the squares, the partisans of separatism form majority. But it is always like that. If the callers for the change really mean it with their victory, they have to be more active than adherents of status quo. This is why Puigdemont is aware of the risk of the unilateral declaration of independence.

Moreover, Catalan independence is subject to recognition by the international community, and it is unlikely that any of the politicians in the EU countries will support independent Catalonia. Even the policies of the countries of the new-born democracies do not.

Since the referendum on independence, uncertainty persists in Barcelona. Reservations of tourists in hotels have fallen by 20% compared to the previous year, which means 1.2 billion euros less for local business. To balance the desire for the Catalans' independence with an economic downturn or a loss of revenue would, however, make us a Pharisee. Our own prosperity is the result of the same desire that we do not dare to provide for Catalans by denying their independence.
 

Author

Mario Blascak, PhD

Mario Blascak, PhD

Independent Analyst

Dr. Mário Blaščák worked in professional finance and banking for 15 years before moving to journalism. While working for Austrian and German banks, he specialized in covering markets and macroeconomics.

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