Radical nationalism and political recklessness are creating unneeded instability and uncertainty in one of Europe’s richest regions.
The Kingdom of Spain is one of the oldest european nations. Known by the Romans as «Hispania», it emerged as a modern nation state in the XV century when the medieval kingdoms of Aragon and Castile willingly united their fates under a common Crown. The Princedom of Catalonia, in the northeast of the Iberian peninsula, was part of the Crown of Aragon.
In 1978 the Spanish citizens voted the national Constitution. The Constitution established a democratic political system and proposed a highly decentralized model, organizing Spain in 17 autonomous regions with wide and relevant powers. The Constitution was voted in a nationwide referendum: 68% of catalans voted, of which more than 90% in favour of it, a higher percentage than other regions.
Since 1980 the autonomous Catalan government -the Generalitat- has been held by nationalist parties. Mr Jordi Pujol (CiU party, center), governed from 1980 to 2003, the best part of those years with absolute majority. A leftist nationalist coalition governed from 2003 to 2010, before CiU returned to power by the end of 2010 until today, under Mr Artur Mas.
During this 34 years Catalonia evolved, with the acquiescence and collaboration of the national Spanish government, into an almost completely autonomous region. Parallel to this increasing autonomy, the grip of the Generalitat on the political, legal, economical and social life of Catalonia expanded dramatically. The regional administration owns an almighty communications conglomerate (the CCRTV with 9 TV channels and 4 radio stations), subsidizes and controls all the regional press (including the local leader, La Vanguardia), manages its own regional police corps with 21,000 officers, has full powers over the Education (altough 55% of catalans have Spanish as mother tongue, early year´s kids only receive education in Catalan, Spanish being treated as a foreign language), manages the Health system, sets income tax rates, creates new taxes, issues sovereign bonds and manages a budget of €36 billion (half of Ireland´s and 40% of Israel´s). In 2006 a new highest rank regional law, the Estatut, replaced the one from 1979 and secured greater powers to the Generalitat, even though it was voted only by 36% of Catalans entitled to vote. Catalan regional powers are unparalleled in other decentralized countries.
Despite Catalonia being one of the richest regions in Spain (19% of Spanish GDP, per capita income index 125 vs Spain´s average), since 2011 the autonomous catalan government is broke. Today regional debt is above €62.000 millions, up from €30.000 millions in 2010. The Generalitat´s sovereign bonds are rated as junk. All the regional financial institutions except Caixabanc and BancoSabadell have been nationalised and bailed out by the national government. Pharmacists and other local administration suppliers do not get paid. Thanks to the regional taxes and tax rates, Catalan taxpayers suffer the highest fiscal pressure in Spain. The Generalitat is financially kept afloat thanks to a special credit line from the national government (the FLA).
Nationalist politicians blame the financial situation on the «fiscal deficit», ie Catalonia gives more money to the rest of Spain than what it gets back. Independent estimates set this deficit at 5-6% of the regional GDP (Madrid has 10.8% and Valencia 2%), similar to what happens to the richest regions in other countries such as USA, Germany or Australia. Catalan nationalists from CiU voted in favour of the current Spanish financial redistribution system between regions in 2009.
Nationalists have relied on this alleged fiscal deficit as a rational motive to push for separation («Spain robs us»). Thousands have been mobilised by separatist parties in awkward demonstrations and disturbing happenings like night torch marches. The once moderated Mr Mas adopted a radical approach and lost 20% of the seats in the 2012 election. His goal for the last 2 years has been to hold a referendum on the separation from Spain, no alternatives accepted. Mr Mas unilaterally decided the date -November 9th 2014- and the questions to be voted -they are two and have been described by Stéphane Dion, a quebecois expert as «manipulative«-. However, like in most countries (USA, France, Germany…), the Spanish Constitution does not grant regional governments the power to hold a secession vote. Therefore the nationalist referendum has been suspended by the Constitutional Court and any step towards its preparation declared illegal. Mr Mas statement that (nationalists politicians) «must cheat on the Spanish State» made it to the headlines in october. Non nationalist catalans deride the nationalist referendum as a «butifarrendum» (a joke relating it to a family gathering to eat sausages).
Significantly, the governing catalan politicians have been immersed in corruption scandals during the last decades. In 2005 Mr Pasqual Maragall, then president of the Generalitat, accused in the regional parliament CiU politicians of bribing 3% of all the civil works. A judge ordered years ago the seizure of CiU´s headquarters building. The nationalist political icon, Mr Jordi Pujol, confessed last summer to have kept milions in tax heavens since 1980, allegedly inherited from his father, a statement he has been unable to prove; his seven children are millionaires and three of them are indicted in corruption cases. Recent estimations set the Pujols as the 6th richest family in Spain.
In last May´s European election, Catalan nationalist parties (CiU + ERC) did not reach 45% of the votes, a similar outcome to the 2012 regional election, when they gathered 47% of votes, surely not all of them separatists. Surveys by the Generalitat show that 71% of catalans also feel naturally spanish. Another local government poll from last week shows only 12% of catalans consider the «relationship with [the rest of] Spain» as the main Catalan issue: 40% think it to be «unemployment», 17% «the politicians» and 17% «the economy», very similar to what worries the rest of Spain.
What shall happen in the coming months? A lot of political noise, some uncertainty and instability. True, not the best environment for business to thrive. Surely, the famous catalan seny (common sense) shall prevail at last, hopefully before it seriously hurts the prospects of the Catalan people to live a decent, normal life together and pursue our happiness…just as we were doing until three years ago.
Sweet and misgoverned Catalonia…