Although separatist movements are as old as typical of our times, the world has been shocked by the Catalan case over the last few weeks. In an earlier article, we explored the causes and potential consequences of this situation, and of a possible separation of Catalonia from Spain. But in the meantime, the tension continues to increase. This political crisis between Spain and Catalonia has no precedent. Intergovernmental organizations, countries, political leaders from all over the world, scholars, and activists take strong positions on this controversy.
Analysts say the current situation was already predictable in 2014. Rajoy did everything he could to avoid the referendum. Catalonia did everything it could to carry it out. Even after being Spain announced the referendum was illegal, (some) Catalans decided to go ahead and vote without the legal framework.
It is important to remember that this situation did not get to this point from one day to another; Catalans, despite the refusal of the Spanish federal government, had decided that, on the first day of October of this year, a new referendum would be held to determine if Catalonia had to continue to be a part of Spain or not.
The Mariano Rajoy administration took, according to analysts, somewhat controversial measures: The Spanish justice canceled the referendum and its promoters were arrested. Police officers carried out numerous searches and detained a dozen activists.
Catalans got ready to carry out the consultation in any way and it took place on the very first of October, as they had originally planned. Around half the population of Catalonia decided to go and vote (90% voted for the “Yes”, with 2.2 million votes and a 42% participation, according to the Catalan government). The Guardia Nacional intervened and chaos took over.
The day of the referendum, the situation became out of control in several areas of Catalonia. The police evacuated many of the spots that would serve as voting stations while human chains protected the buildings. Protesters clashed with security agents. Officially, about 1000 people had to be seen by medical services. Mariano Rajoy said: “We have done what we had to do, acting with the law and only with the law.”
What happened after?
Surprisingly or not, the situation continued to get worse and the tension to increase. On October 3, after a massive strike in Catalonia, the debate began to revolve around the article 155 of the constitution. A political-judicial debate began while the number of detainees and wounded during the voting day was still unknown.
This debate about Article 155 seemed to be a never-ending one. Like most laws, it has multiple interpretations and ways of being applied. However, on the same day, article 155 was activated; this allowed the Spanish government to temporarily assume the faculties that the Catalan government originally had. Confusion reigned.
At the same time, King Felipe VI was addressing the country in a message broadcasted on television, stating that Spain was going through “very serious moments” for “democratic life”. The words of the monarch had wide repercussions, support, and rejection.
During the days that followed, there were massive demonstrations, both in Madrid and in Barcelona, for and against unity. One of the protests ended in chaos, with detainees, wounded, and widespread confusion. In all Spain, there are those who are in favor of the Spanish union, which of course includes Catalonia. But there are also those who are sympathetic to the separatist movements. Finally, there are those who are indifferent. Sides seem to be irreconcilable.
Meanwhile, in Catalonia, the group that seems the most identified with the separation from Spain seems to be that of students (who show up in large groups whenever there is a demonstration in favor of independence). It is also known that many Catalans are in favor of staying in Spain; they are proud to be Catalan citizens but do not feel identified with separatist movements at all.
Less and less clear
Spanish ministers agreed to give the first Catalan leader, Puigdemont, until Monday, October 16, to decide whether he wanted to declare independence or remain within the legality. Puigdemont clarified, but no one really understood what he said. The leader assumed the results of the referendum in his speech, but at the same time declared the suspension of independence.
Among his most controversial phrases, the Catalonian president said that on October 1 had been an “election day” – which, having been declared illegal in advance, is questionable. Puigdemont also said that “Catalonia is a European issue”, although leaders of the euro zone have clarified time and again that this is a Spanish internal conflict.
The role of the EU
In the middle of all this, it’s the question of the European Union. Eurozone leaders have spoken out against attempts by Catalonia to break away from Spain (which, by the way, would it also mean separating from the European Union?). It is not only Rajoy who tries to stop this process, but Europe as a whole (or, at least, its political leadership). Meanwhile, the Catalan government seems convinced that even separating from Spain, Catalonia could remain in the European Union. This idea does not seem to match the feelings of some of the main leaders in the euro zone.
Companies leaving Catalonia
This is one of the many immediate consequences of this crisis between Spain and Catalonia. The unilateral declaration of independence by Catalonia has aroused fear among executives of large companies, who in many cases have already decided to close their headquarters in the Autonomous Community of Catalonia.
Six of the seven Catalan companies of the Ibex have already informed the National Securities Commission about their decision to leave Catalan territory. Among the largest companies that have already confirmed that they are leaving Catalonia are Caixabank, with a market capitalization of 24.3 billion euros and almost 35,000 employees, which moves its headquarters to Valencia. Gas Natural, with a market capitalization of 18,500 million euros and 20,000 employees, is going to Madrid. Baertis, also moves to Madrid.
The company has a net profit of 796 million euros (2016) and 15,000 employees. The Sadabell bank moves to Alicante. The latter has a market capitalization of 9,407 million and more than 25,000 employees. Cellnex, whose stock market capitalization amounts to about 4,690 million euros, is another one that will move its headquarters to the City of Madrid. Inmobiliaria Colonial, with a net profit of 274 million euros, will also move to the Spanish capital.
Other companies that are already abandoning their headquarters in Catalonia are Lleida.net, Eurona, Catalana Occidente, eDreams Odigeo, Applus, Dogi, Oryzon, Service Point, Naturhouse, Grupo Planeta, Bimbo, Idilia Foods, Aguas de Barcelona, Axa, Torraspapel, Grupo Indukern, Criteria Caixa, CaixaBank Asset Management, Banco Mediolanum, Arquia Banca, GVC Gaesco Beka, Trea Asset Management, EDM Fund Manager, Gesiuris, SegurCaixa Adeslas, VidaCaixa, MGS Seguros, Proclinic Expert, Dental DVD, Klockner, Sanantur, MRW , Ballenoil, Industrias Ponsa and Cémoi Electricité, among others.
Meanwhile, a significant number of companies is analyzing the situation and seriously considering joining the group of companies that leave Catalonia. As if this were not enough and at the same time, tourism in Catalonia (one of its main sources of income) and specifically in Barcelona, is being affected by the events of the recent days. Flight tickets and hotel reservations have been massively canceled over the past week.
Regardless of what has happened because of this political crisis, Catalonia has already been economically harmed.
Coup to the Catalan economy
It is important to bear in mind that, at least until this conflict began, the economic activity of the region of Catalonia constituted 20% of the economy of Spain. The GDP of the region was well above the average of the European Union. But this information should now be updated. The events of the last 20 days seem to have overwhelmingly affected the Catalan economy. As well as the credibility of its leaders and its international reputation.