Catalonia and Spain - Separation or Divorce. TraugottL-libre

Catalonia and Spain Separation or Divorce?
By Leopold Traugott
Maastricht University
CATALONIA AND SPAIN SEPARATION OR DIVORCE?
Table of Contents
1. Introduction
p. 3
2. The Catalan Claim to Independence
p. 8
3. Revisiting the Statute of Autonomy
p. 13
4. Catalan Independence
p. 17
5. Conclusions
p. 34
6. Bibliography
p. 39
1. Introduction
It was chosen to be 9 November 2014 the day on which the Catalan people should be
able to finally seal their own faith. The history of political dispute between the Catalonia
and Spain is a long one it basically is as old as the two nations' union. It was already
with the annexation of Catalonia by the Castilian Kingdom in 1711, that the struggles
about political, cultural and economic powers and rights should begin and they are still
present today. Yet, even though these struggles run like a golden thread through the two
nations' common history, they took a sudden leap in the 21st century. There has always
been a power play between the powerful Spanish centre of Madrid and the Catalan
capitol Barcelona, marked by the constant endeavour of the latter to extract promises of
further autonomy and self-determination from the Madrilenian elites. However, the
solutions and wishes proposed had always seen the two nations in a unit, and had focused
rather on the decentralization and federalisation of Spain than on a complete separation of
their political ties. It was therefore not until the last two decades, that the Catalan claim
for more autonomy and economic freedom had finally transformed in a claim for fullfledged independence and a complete secession from the Spanish state (Guibernau, 2002,
p. 21). Yet, as soon as the Catalan government around President Artur Mas had made its
plan for a referendum on the secession from Spain public, similar to the Scottish
referendum planned for September 2014, Madrid stepped in and announced said
referendum illegitimate (Spain says no, 2013). The young dream of an independent
Catalan state, so it seemed at least to outsiders, was meant to stay a dream. Yet, although
Madrid put a legal stop to the Catalan demand for independence, the real impact was
rather low. While it made Catalonia once again aware of the fact that Madrid was not
willing to negotiate independence for its separatist region, the Catalan fight for
independence still goes on.
As the power play between Barcelona and Madrid can be assumed to go on, and
with no final solution being in sight so far, this paper sets out to examine what actually
constitutes the best solution for the small nation of Catalonia. Is it really and only the
complete secession from Spain that would solve the Spanish-Catalan problems? Or is it
3

rather a fair renegotiation of the statute of autonomy with numerous models possible
that would improve the situation the most? In order to find a sufficient answer, this paper
looks into several scenarios possible for the future of Catalonia, orienting itself by current
models which were and still are used by countries all over the world. Furthermore it will
take into account numerous important factors, and explore as well as present the
previously mentioned possibilities under the light of broader economic and political
issues, such as possible solutions for currency problems, national debt, European Union
membership and international recognition. Therefore, this paper uses an analytical
framework to assess current political and economic realities. It examines the current
economic situation based on published quantitative data and comparable developments in
the past, and draws conclusions for each possible scenario. Furthermore it analyses the
political situation based on national and international legal frameworks and the results of
public elections as well as surveys. This analytical approach was chosen in order to
eliminate the risk of an ideological assessment of the situation, and to guarantee that the
final conclusions are based on economic and legal facts instead of political and
sentimental claims from either side. Due to language limitations, it was merely possible
to work with English and German sources on the topic, preventing the usage of an
extensive body of Spanish material.
So far, there exists only little literature about the latest Spanish-Catalan problems
in the English language, with most of it being focused on specific parts of their
relationship, rather than giving a more general overview and outlook. There has great
work been done from scholars such as Eric Guntermann (2013) on the relationship
between the rise in Catalan independence and the economic situation in Spain, from
Bardo Fassbender (2013) and Emmanuel Dalle Mulle (2013) on the implications of a
possible Catalan independence on its standing with the European Union, and from
Giacomo Delledonne (2011) on the last failed negotiations between Madrid and
Barcelona. Yet, although these works give great accounts of different problems of the
Catalan situation, the scholarly debate lacks a comprehensive and analytical account of
the general situation, which does not only pay attention towards the detailed implications
of different scenarios, but also keeps in mind possible solutions for on-going and
increasing tensions between Madrid and Barcelona. Although Montserrat Guibernau
4

(1999, 2002, 2004, 2012) has proven herself a great scholar on this topic, and has
delivered a great array of works on the origins of Spanish-Catalan tensions, on Catalan
national identity and also the quest for Catalan self-determination, her latest works
neglect a concrete account of the implications of Catalan independence. This paper uses
selected primary sources, as well as a wide array of secondary sources. The primary
sources consist mainly of government releases, treaty provisions, constitutional chapters
and public statements of government officials, and as such serve as a foundation for
further research and interpretation. For secondary sources, the paper makes use of several
books on the topics of Catalan history, federalist theory and practice, as well as on the
broader topic of independence movements in the twentieth and twenty-first century.
Furthermore, it is based on numerous scholarly journal articles, such as from the authors
mentioned above, which concern themselves in detail with parts of the debate about the
Catalan situation within Spain. Lastly, this paper takes into account several newspaper
articles from renowned sources, mainly in order to deal with the most current events on
the topic. Although scholarly sources are preferable, the currentness of certain events
prevents the availability of an abundant pool of high-class work on the latter. In addition,
for some topics, such as the detailed economic consequences of a possible Catalan
independence, there are only very few English sources available, creating difficulties in
the presentation of a diverse body of sources.
During the last century, the number of countries worldwide has been constantly
growing. Whereas merely 53 countries did exist in 1900, this number nearly quadrupled
until today - reaching a number of 193 states currently recognized by the United Nations.
While those numbers can never be completely precise, facing the difficulties of changing
and ambiguous definitions of statehood and independence, a clear trend towards a strong
increase in the number of states can not be denied. Yet, how and why did this change
come about? Scientists have offered different explanations for different sets of time,
mostly focusing on specific 'waves' of state and nation building. This approach does
history justice in so far, as the rise of new states indeed was not a fluent and consistent
development, but instead characterized by several distinct events and changes in history.
If we set the beginning of the relevant timeframe for this paper with the start of the 20 th
century, the first big event which should lead up the creation of numerous new states,
5

especially in Europe, was World War I. As an aftermath of this international conflict old
and multi-ethnic empires were destroyed, and new states took their places. The
dissolution of the Russian, Ottoman and Austro-Hungarian empires led to the creation of
a whole wave of new states ranging from clear cut nation states in Finland and the
Baltic up to new multinational entities such as Yugoslavia, Czechoslovakia, and Syria.
Yet, this development was mainly, although not exclusively, taking place in Europe and
its closer periphery. Whereas the losing states of the war where often forcefully broken up
and reorganized, none of the winning states thought about voluntarily changing its own
structures even the colonies of the Central Powers were merely transferred instead of
freed. It was therefore only after World War II, from the late 40s until the 60s, that the
time of decolonization began, and the possibility of self-determination and independence
was brought to the continents of Africa and Asia. During this time the world saw over
thirty new countries coming into existence; most of them emerging from former colonies
who either had their independence granted peacefully by their colonial power, or had
fought with military power in order to obtain it. The third wave then again did to some
extent resemble the first one the fall of a huge multinational construct gave place to
numerous smaller nation-states. When the Soviet Union and its communist power bloc
started to disintegrate in the beginning of the 1990's, over a dozen of smaller and bigger
national groups saw this as a chance. This third wave saw Kazakhs, Uzbeks, Ukrainians,
Latvians, Armenians and many more national and ethnic groups breaking free and
reorganizing in their newly created borders. Even though the political elite of the Soviet
era had tried for decades to erase nationalist ideas and identities from among its
population, ethnic and cultural groups were suddenly fighting to set up their own nationstates in this vacuum of power and where there was one unitary state before, fifteen
new ones were created to replace it (Bishai, 2006).
Today many political scientists believe to be in a time where this development has
stopped the time of multinational empires is over, and the model of the nation-state
seems to have established itself in most places of the world. Yet, this appearance is
deceptive; the Western model of the neatly organized nation-state is under threat. While
the repercussions of globalization are diminishing the importance of the nation-state on
an economic and political level from above, the demand for autonomy and self6

determination by minorities and smaller nations is threatening the nation-states' moral
support from below (Guibernau, 1999, p. 16). Numerous ethnic and national groups all
over the world are trying to get their recognition as distinct nations or even states. Instead
of having their fate dictated by a parent state dominated by the national majority, they
demand the freedom to decide for themselves not least because this is what the western
tantra of democracy and self-determination has told them to be their right. Experts on the
topic of secessionism, such as Lea Brilmayer, even go as far as comparing the current
development to a second wave of decolonization (Brilmayer, 2000, p. 283). However,
whereas the real decolonization took place mainly on the continents of Africa and Asia,
liberating the natives from their European conquerors, the new wave is represented
equally on all continents not least in Europe. Instead of fighting a foreign colonial
power, current secessionist movements, or such with a strong strive for autonomy, are
trying to claim their right for self-determination from a majority with which they often
lived together for centuries. Nations that were once conquered by a powerful neighbour
and consequently assimilated are now trying to fight their way back to the independent
status of their ancestors. Most of the times, these abstract theories and claims, based on
often by-gone eras, attract little attention in public debates they are topics which seem
to be reserved for minorities, populists and political scientists. However, during the last
decade the world has seen two cases in which such cases managed to stir up international
discussion, namely when Kosovo and South Sudan declared their independence. Both
countries split off from their previous parent state Kosovo from Serbia in 2008, and
South Sudan from Sudan in 2011 and are now considered independent and sovereign
countries by the UN. And while those two cases took place in what Western critics may
dub conflict areas, a third case might soon happen in the very centre of the Western
hemisphere. Scotland, until now a part of the United Kingdom, is the first European
country after Norway in 1905 which has the chance to secede from its parent state via a
public referendum. Should the Scottish people decide in this referendum to become
independent and have success with it an even stronger surge of separatist tendencies
in Europe can be taken for granted.
These cases are the shining examples of an enormous, but often neglected,
movement. All over the world, there are more than fifty different groups fighting for
7

more independence from their current state. Quebeckers are demanding independence
from Canada, Kurds from Iraq, Syria, Iran and Turkey, Tamils from Sri Lanka and India,
and Chechens from Russia. Yet, they are also numerous in Europe, where they exist not
only the Basque Country, Flanders or Corsica, but also in Southern Tyrol, Wales and
Northern Italy (Beary, 2011). And even though most of these movements are merely
aiming for a higher level of autonomy, the number of groups favouring the solution of
complete secession is not to be neglected and the possibility of it never to be
completely excluded (Bishai, 2006). With the case of Catalonia, the final trend is not
really clear yet. An age old demand for more autonomy and internal reformation has,
under the influence of economic instability and perceived Spanish oppression, led to a
situation in which now the complete separation from the Spanish state is the goal for a
majority of the Catalan population. However, with the stakes as well as the goals being
more than unclear, it is hard to say what is really going to happen. The only thing that is
clear is that the current status quo is no longer acceptable to the Catalan people
negotiations between Catalonia and Spain have gone through many stages, and have
hardly ever led to a satisfying result for Catalans in the long run. So while Spain might
think that their constitution and their laws might be able to force Catalonia to accept this
situation, they would be naive in relying on this. For even though their constitution might
legally oblige Catalonia to rest with Spain, the region's president Artur Mas already stated
that the will of Catalonia cannot be stopped by a vote in congress (Hedgecoe, 2014).
2. The Catalan claim to independence

After the Habsburg loss of the War of Spanish Succession, the region of Catalonia, which
previously had belonged to the Crown of Aragon, became officially part of Spain, and as
such was since then subject to the rulings of the Spanish monarchy in Madrid. Over the
course of time, the relationship between the old Spain and Catalonia went through many
different stages from subtle attempts to Spanish nation-building in the eighteenth and
nineteenth century, to complete suppression of Catalan culture under the Franco regime,
and to the heated-up disputes over mostly financial and political issues since the end of
the 1970s. During most of this time, there has always been the feeling of a certain
8

disctinctivess and resentment on the side of Catalonia (Hoffmann, 2014). Partially
because of the situation of Catalonia as a cultural and national minority in the Spanish
nation-state, but also because of the decisive will of the Catalans to insist on their special
status. This part of the paper assesses and presents the three key reasons for the difficult
relationship between Madrid and Barcelona, and sheds a light on the recent developments
which led to an even further split between these two actors.
The roots of the Spanish-Catalan problems can be traced back to the Middle Ages,
and partially lie with the independent history of Catalonia itself. Whereas many people
perceive Catalonia as an integral part of Castilian Spain, this argumentation neglects
important aspects of history. Over several centuries, the region of Catalonia, first
established as a province in the Frankish Empire in the ninth century, was known as the
mainstay of the Crown of Aragon. With Barcelona as one of the main ports of this empire
encompassing not only parts of Spain and Greece, but also Sicily, Corsica, Sardinia and
the Balearic Islands the city as well as the whole region surrounding it profited greatly
from its cultural and financial wealth (Greer, 2007, p. 16). With the modern concepts of
nation-states and territoriality being non-existent in Middle Ages, the County of
Barcelona, encompassing the Catalan counties, was free in its cultural development and
its domestic affairs. During this time, Catalonia developed not only an extensive cultural
life of its own, but also experienced the creation and spread of its own language, which
was used extensively in the whole region of Catalonia (Etherington, 2010). To this day,
the history of Catalonia is regularly adduced as a reason for Catalan autonomy and
independence, and has so far gone through several periods of revival. The renaixenca of
the nineteenth century, the Catalan equivalent of the European-wide renaissance
movement, reinvigorated the identification of Catalonia's inhabitants with their perceived
common past, and led to a vivid revival of the regional culture. It modernized the Catalan
language, making it widely used in all spheres from literature over theatre to music, and
therewith placed it at the very centre of Catalan daily life (Hoffmann, 2014, p. 52). This
was also the time during which the notion of Catalan history was finally deeply
entrenched with the notion of Catalan self-determination. In this time of romanticism
Catalans created themselves as a distinct national group, and discovered and emphasized
what they thought to be their common heritage, and the basis on which they would create
9

their common future. Next to an emerging feeling of belonging together and sharing the
same past, Catalan identity soon started to base itself on the idea of Catalonia's claim to
be politically autonomous (Greer, 2007, p. 17f.).
Yet, as soon as Catalonia and Castilian Spain were united, Madrid tried to erase
the notion of an independent Catalan national and cultural identity. Already early into the
union, the Castilian crown started to spread its own culture into the periphery, and to ban
regional traditions in favour of a large-scale Castilianization of the territory, as part of a
greater effort to centralize the state, and to spread the idea of a common Spanish identity
(Hoffmann, 2014, p. 50). While this nation-building on the side of Madrid was, and still
is, an object of dispute in the Spanish-Catalan relationship, its intensity has varied over
the years. Only several years after Catalonia was granted its first Statute of Autonomy in
1932, leading to more cultural and political freedom, the situation in Spain began to
change rapidly to the worse. The Spanish Civil War, which took place from 1936 until
1939, saw the rise of a new nationalist and autocratic regime in Spain, led by General
Francisco Franco. Franco's troops had fought for the old image of a centralized and
united Spain, opposing the planned and partially already realized plans of devolution of
power in the country (Guibernau, 2002, p. 11). Following the cleansing of former
opponents and political enemies after the war, Franco soon aimed at the rescission of
most progressive and power devolving measures that were taken during the time of
Second Republic. Not only did the Franco regime abolish all previously established
regional institutions, laws and powers, but it also went as far as prohibiting all regional
languages and identity-establishing symbols, in a clear cut attempt to finally solve the
perceived problem of Spain's diversity through forceful homogenization (Guibernau,
2002, p.11/49). One of the main victims of these policies was Catalonia. During the time
of the Franco dictatorship, from 1939 to 1975, the use of the Catalan language was
forbidden among all parts of society, was banned from the sphere of education, and
forcefully replaced by Castilian (Vila, 2013, p. 35). The Francoist notion of a united
Spain, driven forward by conservative Catholicism and deeply reactionary in its nature,
forbid any diversity, and therefore especially targeted regions with a strong local identity.
Every harmful cultural influence was to be annihilated, and the superiority of the Spanish
nation, defined by the values of Franco's regime, to be reasserted (Grugel & Rees, 1997,
10

p. 133). When Franco died in 1975 however, Spain decided to use this possibility to
change. One of the most important issues the new government had to tackle, and which
was actively pushed forward by the respective interest groups, was the question of how a
democratic Spain should deal with the different regional, cultural and linguistic identities
it had inherited. Whereas the representatives of the minorities were doing their best to
make sure that their rights would be safeguarded in the new constitution, Spanish
conservatives and Unitarians were uncompromisingly emphasizing the unity of the
Spanish nation (Guibernau, 2002, p. 14). However, the problematic situation after the fall
of the Franco regime, and the memories of the devastating civil war only forty years
earlier had made the Spanish population aware of the need to compromise. In order to
give the new constitution and therefore the new state the highest level of legitimization,
the political elite of Spain tried to bring as many political parties behind it as possible.
Yet, while this guaranteed a peaceful and democratic process of decision-making, it also
ensured that the final solution would be a middle way between all political groups
involved. Instead of defining a clear-cut separation between the different cultural groups
inhabiting Spain, the new constitution was drafted purposely ambiguous (ibid. p. 13).
While it set down the fact that there was one Spanish nation which was indissoluble, it
simultaneously acknowledged the existence of several nationalities inside this nation
leaving doubts about the exact differences between said nations and nationalities, and
thus their further relationship. This is still a problem today, as Madrid continues to deny
Catalans the acknowledgment as a distinct nation, which many see as the basis for a
Catalan right to self-determination. Therefore, in the Declaration of Barcelona in 1998,
nationalist parties from Catalonia, Galicia and the Basque Country demanded that Spain
would define itself as a multilingual, multicultural, and multinational state (ibid., p.
17). Furthermore, the use of the Catalan language is still a political issue these days. The
question in how far Catalan can or has to replace or complement Spanish in the spheres
of education and general public life is not yet finally solved, and continues to promote
discontent among Catalan nationalists, who perceive the current situation as
discrimination coming from Madrid (ibid., p. 19).
Whereas the first two reasons are directly related to Catalonia's history and its
distinct national identity, the third one is due to monetary struggles only. The Spanish
11

constitutional system, which is based on seventeen autonomous communities, uses a
model of fiscal redistribution among its regions, in order to equalize differences in their
economic strength. Except for the Basque Country and Navarre, which have their own
fiscal agreements with Madrid and enjoy full fiscal autonomy, all other regions are
obliged to participate in the Spanish redistribution system (Paluzi, 2013). While
redistributive mechanisms are neither unusual nor unmoral per se, Catalans complain
about having to bear a burden way heavier than those of other regions. They claim that
while they contribute disproportionally much to the Spanish budget, the federal
investments into their region are too low, leading to a lack of infrastructure investments
and an insufficient funding for public institutions such as school and hospitals. Over the
period of 2002 until 2009, Catalonia received merely 52% of its contributions to the
Spanish central government and social security back via public investments (Paluzi,
2013, p. 26). While these imbalances did not carry too much weight in times of good
economic climate, they developed into a major point of concern for Catalans over the last
years, and as such became one of the most important political issues in the SpanishCatalan relation (Bosch, 2013, p. 117).
The existence and perseverance of these reasons, together with the unwillingness
of Spain's conservative parties to solve them, has led to increasing tensions between
Catalonia and the rest of Spain. Whereas for most of their common history the Catalan
strive for self-determination was merely focused on the demand for increased autonomy
within Spain, the recent years have seen a strong rise in demands for complete
independence among Catalan citizens (Guntermann, 2013, p. 2). The reasons for this are
twofold. Firstly, the economic difficulties caused by the financial crisis of 2008 have
increased the distribution battles among Spain's mostly rather economically weak
regions, and have strengthened Catalonia's focus on their overwhelmingly large fiscal
deficit. Since Catalonia is now in a situation where it even had to request own loans from
the Spanish rescue funds, its regional government is even more focused on abolishing its
current fiscal deficit, and on finding a way to leave the redistributive Spanish tax system.
Furthermore, empirical research has shown that although Catalan secessionism is
partially caused by the feeling of distinct nationhood and feelings of cultural oppression,
the recent surge in support for it is mainly due to the increasing economic crisis that hit
12

Spain (Guntermann, 2013). Secondly, Catalans are frustrated by the intransigent position
Madrid is taking with regards to most negotiations about Catalan autonomy and
independence. Barcelona's last attempt to renegotiate their terms of autonomy with
Madrid was struck down by the constitutional court, after having been ratified by the
Catalan as well as the Spanish parliament before (Delledonne, 2011). With the
perspective of a fair negotiation on equal terms missing, more and more Catalans are
publically expressing their discontent with the current situation, and are finding
themselves supportive of more extreme solutions, with even the possibility of a
unilaterally declared independence becoming a topic of discussion.
3. Revisiting the Statute of Autonomy

An effective and politically little fraught way to solve current problems between Madrid
and Barcelona would be to rethink and implement the new Statute of Autonomy
(Estatuto) which was proposed by the Catalan regional government in 2006. The new
statute was brought forward by the governing Partit dels Socialistes de Catalunya, and
supported by other leftist parties as well as the moderate nationalists in Catalonia's
regional parliament (Autonomy plan, 2006). While the proposal was aimed on increasing
Catalonia's autonomous rights in many different fields, such as immigration, judiciary
and education, its thematic priority lay with the acknowledgement of Catalonia as a
distinct nation within Spain, and the right for the affluent region to establish an own fiscal
system (Parlament de Catalunya, 2006). After being drafted and published by the Catalan
regional parliament, the new statute was also agreed on by the Spanish parliament, and
finally legitimized by a domestic referendum in Catalonia, in which a majority of 73%
voted in favour of the new statute of autonomy (Pericay, 2010). Yet, even though the
statute had passed all democratic obstacles, the conservative Spanish Partido Popular,
the only party in the Spanish parliament which had publically opposed the statute,
invoked the Spanish constitutional court on this matter, claiming that out of the statute's
221 articles, 113 were unconstitutional. After four years of legal proceedings, the court
struck down several provisions on Catalan autonomy. Most importantly, it declared
Catalonia's definition as a nation non-binding, denied the region a reorganization of its
13

fiscal agreements with Madrid, and curtailed provisions which were put forward to
promote the Catalan language (Delledonne, 2011). In the wake of this verdict, resentment
grew in Catalonia, leading to an even further split between Catalanists demanding
independence on the one hand, and the Spanish government on the other hand (Juberias,
2013, p. 210). A Spanish agreement to this statute, which only failed due to the
intervention of the constitutional court, would have alleviated the current SpanishCatalan problems strongly. Yet, whereas Catalan nationalists will not easily give in on
their demands, it is equally difficult to bring around a change in the Spanish constitution,
in order to allow a passing of the Catalan demands. However, it would be possible to find
certain agreements which would on the one hand satisfy at least parts of the Catalan
demands on their main points, while on the other hand also be in accordance with the
Spanish constitution. While a full assessment of all articles refuted in the verdict would
exceed the scope of this paper, and instead deserves an independent assessment on its
own, it will focus on the two parts of the proposed statute of autonomy which have
caused the biggest concerns, and for which a solution would be most crucial.
Already in the preamble of the original statute, Catalan law-makers had
incorporated the declaration of Catalonia as a distinct nation, in reflection of the feelings
and the wishes of the citizens of Catalonia (Delledonne, 2011, p. 8). While the Spanish
constitution grants to Catalonia and other cultural minority groups, such as the Basques
and Galicians, the deliberately ambivalent status of nationalities, it only officially
recognizes the 'indissoluble' Spanish nation as such (Guibernau, 2002, p. 13). In
accordance with this excerpt of the constitution, the court ruled that while the Catalans
have the right to call themselves a nation for the purposes of political and cultural
debate, there are no legal rights established by this. On the contrary, the only nation
officially existing in Spain continues to be the Spanish one. The importance of this legal
distinction stems from the fact that the legitimacy of the Spanish legal system is derived
from popular sovereignty, which is exerted by the Spanish people (Delledonne, 2011, p.
8). For the case of an acknowledgment of Catalans as a nation, Spanish conservatives and
nationalists feared the emergence of further claims towards Catalan self-determination
(Govan, 2010). Yet, it is questionable in how far these fears are justified. In 2006, the
regional parliament of Quebec sent a motion to the federal Canadian government, and
14

proposed an acknowledgment of Quebeckers as an own nation. In contrast to the Spanish,
the Canadian federal government managed to find a solution which on the one hand
satisfied the Quebecois demands for national acknowledgment, while on the other hand
still preventing an undermining of Canadian national unity. Firstly, the Canadian Prime
Minister at that time, Stephen Harper, added the words within a united Canada behind the
acknowledgment of the Quebecers as a nation, and therewith constituted that their status
as a nation would not be related to any new rights of separatism or independence.
Secondly, he replaced the English expression Quebecer with the French Qubcois, based
on the self-identification emanating from the Quebecers (McIlroy, 2006). Spain could use
a similar manner in order to alleviate its current tensions with Catalonia, while still
honouring its constitution. As the Spanish constitution's part on nationhood is phrased
ambiguously, it would be possible for the constitutional court to interpret it in such a way
to allow Catalonia the status as a nation. The use of the word nationalities in the
constitution could be interpreted as also carrying the meaning of nation, while in return
demanding that every proclamation of Catalan nationhood would depend on the condition
that the acknowledgment of such a nation is only possible within a united Spain. In the
Canadian case, the secessionist Parti Qubcois did not only not receive any particular
gains in support after the acknowledgment of Catalonia as a nation, but has recently even
experienced its worst general election results since 1970 in 2014 (Hamilton, 2014).
Therefore, if Spain should take similar steps and acknowledge Catalan nationhood, it is
unlikely that separatist tendencies in Catalonia will increase simply because Catalans win
the right to be a legally acknowledged nation. Already now the Catalan CiU manages to
define Catalonia as a distinct nation on the one hand, while nevertheless adhering to
Spanish unity (Guibernau, 2002, p. 16). While Spain would thus lose little by making
concessions on this point, it could regain a lot of lost trust with Catalan citizens.
The second crucial point of the Estatuto concerned a change in the current fiscal
agreement between Barcelona and Madrid, an issue which regularly causes discontent
among Catalan citizens. Catalonia has the highest differences in Spain between the
amount of money it contributes to the redistribution system, and the amount of money it
receives back from it. In 2010 for example, Catalonia transferred 62bn Euros in taxes to
the Spanish central government, but only received 45bn Euros back in public expenses
15

for the region (Departamento de Economa y Conocimiento, 2014). In its new statute of
autonomy, Catalonia therefore demanded a complete fiscal autonomy, according to which
the region would have full powers in the levying and spending of its taxes. The current
system, in which Catalan taxes are first transferred to Madrid and then flow partially back
to Catalonia, would thereby be circumvented (Parlament de Catalunya, 2006, p. 113ff.).
Instead, the Catalan regional government would negotiate with the Spanish central
government each year the amount Catalonia has to pay for shared federal services, as
well as a certain amount to be paid for redistribution among the regions, and keep all
further tax revenues directly in the region. With these powers, Catalonia could prevent its
annual fiscal deficit either completely, or at least decrease it decisively. Yet, whereas this
would benefit Catalonia strongly, as the region would have up to eightteen billion Euros
per year extra to spend on public investments, tax reductions and social benefits, it would
at the same time be difficult for the Spanish state and weaker regions dependent on the
fiscal redistribution mechanism (Cala, 2012). It would render many of Madrid's reform
packages and investment plans unfeasible, and especially the ability to support weaker
regions through structural funds would be decisively curtailed. However, once again
Catalonia will not give up its claim for further fiscal independence. Quite on the opposite,
the current fiscal situation is one of the most critical issues between Madrid and
Barcelona, and a main cause for the intensification of the Spanish-Catalan tensions
during the last years (Guntermann, 2013). Furthermore, the situation is aggravated due to
the fact that both, the Basque Country and Navarre, already have a special fiscal
agreement with Madrid, which is enshrined in the constitution. Yet, even if Madrid is not
willing to grant similar rights to Barcelona, it could still move towards Catalan demands
in such a way that it would quell further dispute about the fiscal system. Firstly, it would
be possible to introduce a strict ceiling to the fiscal deficit a region is allowed to suffer
due to the redistribution of taxes. This could mean that the current Catalan deficit could
be permanently limited to an amount which would be acceptable to both Madrid and
Barcelona. This would solve the fiscal question at least partially, while still leaving a
certain amount of fiscal leeway to Madrid. Secondly, it would be possible to increase the
amount of taxes which Catalonia can not only levy, but also directly spend itself. This
would mean that the amount of money which has to be send to Madrid would be reduced
16

in the first place, irrespective of how much money will afterwards be reinvested into
Catalonia. So far, as negotiated in 1997, Barcelona can keep and directly spend up to
thirty percent of its levied taxes (Guibernau, 2002, p. 16). An increase of this percentage
could mean several billion Euros more for Catalonia, and could consequently help to
fulfil the Catalan demands at least partially.
In the long run, a revisiting of Catalonia's statute of autonomy, this time including
the amended parts about nationality and fiscal structures, will not solve the problem of
Catalan and Spanish cohabitation completely and forever. Nevertheless, while
secessionist tendencies will most likely prevail among small parts of the Catalan
population, it is certain that Spanish concessions on these points will at least take away
the current majority for such separatist policies in Catalonia. For many Catalans
supporting independence at the moment, the question is less about identity, and rather
about the economic situation and their standard of living. Therefore, in the case of a new
fiscal agreement for Catalonia, which would consequently alleviate economic problems
in the region and lessen the fiscal pressure on Catalan tax payers, a huge part of current
supporters of Catalan independence might rethink their choice (Guntermann, 2013, p.
25). It will furthermore raise the awareness that a third choice between the status quo and
secession, namely a renegotiation of Catalonia's terms of autonomy, does indeed exist.
4. Catalan Independence
From a modest point of view, a Catalan independence during the next couple of years
seems rather unrealistic. Not only does the Spanish legal framework clearly prohibit any
political act which would harm the unity of the Spanish state, but Madrid's political elite
has also made clear at several occasions that they would not accept a unilateral
declaration of independence by Catalonia (Buck, 2014). Yet, the question arises in how
far such legal and normative arguments can hold back a sub-territorial entity which has a
decisive will to split away from its current parent state. Assuming a successful Catalan
secession from the Spanish state however, either through unilateral action or through a
mutually agreed on separation, several issues concerning the viability and status of an
independent Catalan state would become apparent. This part of the paper will therefore
17

focus on examining the issues and problems an independent Catalonia would have to face
after reaching independence, and assess in how far these obstacles could be overcome. In
order to do so, this paper will consider Catalonia's relationship with the European Union
as well as with other international organizations and institutions, and the ways in which
an independent Catalan state could interact with these stakeholders. Furthermore, the
issue of territorial claims between Catalonia and Spain will be explored, as opposing
historical and administrative definitions of Catalonia could lead to further problems in the
process of a Catalan secession. In the end, the economic reality of a independent
Catalonia is examined closely, and claims as to how far a Catalan state would overcome
economic obstacles and risks will be assessed.
The European Union
When Spain joined the European Union in 1986, Catalonia, in its role as a sub-territorial
entity of Spain, became member of the European Union, too. Consequently, Catalan
citizens enjoy the full benefits of the European Union; free movement of persons and
goods, democratic participation, European structural funds, and of course the right to
European citizenship, to just name a few. While these and many more benefits are
guaranteed to all Catalan citizens so long as Catalonia remains part of Spain, things will
drastically change once Catalonia chooses to secede. Whereas Catalan politicians try to
frame the future of Catalonia as part of the European Union, taking their continuing
membership for granted even in the case of a secession from Spain, the current tone
coming from Brussels seems to oppose their view (Sinkkonen, 2012). In late 2012,
speaking on the issue of a possible Scottish secession from the United Kingdom, the
Commission President Jos Manuel Barroso stated that indeed a country seceding from a
current member state of the European Union would lose its membership in the latter,
including rights and duties stemming from it. Due to the nature of the country's newly
found independence, Barosso argued, it would not be regarded as a part of the European
Union anymore, but would be treated as a third country. As a consequence of this,
Scotland as well as Catalonia would, equal to all other third countries, need to apply for
EU membership again through the normal procedure (Fassbender, 2013, p. 3). In
18

addition, Herman Van Rompuy declared that should a part of a current EU member state
secede as an independent state, the treaties of the European Union will no longer apply to
said territory (Van Rompuy, 2013).
Yet, there has neither been a precedent in the past, nor any clear provision in the
treaties, which would give absolute certainty to Barroso's claim (Crawford & Boyle,
2012, p.103). Regularly new proposals and ideas are brought forward, some appealing to
the European Court of Justice to protect Scottish citizens' rights by granting them
continuing EU membership, others demanding a change in the EU treaty system in order
to establish privileges for seceding territories (Fassbender, 2013, p. 3). Nevertheless, the
realization of none of these proposals can be taken for granted. Indeed, the most likely
outcome predicted by officials of the European Union is the automatic exit of an
independent Catalonia from the European Union, as there is no legal statute which would
guarantee them a right to remain as a member, and neither can there be expected a quick
agreement of the current twenty-eight member states to change European law in favour of
Catalonia (Crawford & Boyle, 2012, p. 103).
If one therefore follows the logically consistent conclusion that Catalonia would
have to apply for EU membership under Art. 49 TEU, or associate membership under
Art. 217 TFEU, the focus shifts to the issue of how such negotiations would be dealt
with, and what the possible outcomes could be. Dalle Mulle proposed a set of three
different scenarios for the case of Catalonia's application for EU membership. A first
scenario would see Catalonia keep some sort of passive EU membership for a certain
transition period, most likely consisting of access to the European market, the Schengen
Area, and membership of the common currency, giving all stakeholders enough time to
negotiate a possible accession of Catalonia to the European Union as a full member
(Dalle Mulle, 2013, p. 36). Under this model however, Catalonia would have no voting
rights or seats in the European institutions, and would be merely a passive member. Yet,
this timeframe of passive membership could constitute a useful transition period for
Catalonia, during which it can sort out details of its independence and new status not only
vis--vis Madrid, but also with Brussels. A similar transition period of around eighteen
month is planned for Scotland, in the case of a successful independence vote in
September 2014 (Campbell, 2013). While this seems a viable option with reference to the
19

EU's practice for finding pragmatic solutions, its likelihood will depend on the terms
under which Catalonia seceds from Spain, and whether all EU member states would
directly grant recognition to an independent Catalan state. Such a model is mostly
realistic in case of a mutually agreed on split of Spain and Catalonia, in which Madrid
gave its consent to Catalan independence. Yet, should Catalonia decide to declare
independence unilaterally presenting Madrid with a fait accompli it is to assume that
Spain would punish such a move by preventing any further affiliation of Catalonia with
the EU, at least in the short run. A second option would be a clear break between
Catalonia and the European Union directly after Catalonia's secession, resulting in
Catalonia fully leaving the EU, and having to negotiate over its accession as a third
country (Dalle Mulle, 2013, p. 36). In this scenario, Catalonia would lose its EU
membership completely, but would be able to apply under normal conditions. However,
while Catalonia would probably have little difficulties to fulfil most formal criteria for
EU accession, an application could still take a long time. The fastest accession of member
state so far has been Sweden's, and even in this case it took four years. Catalonia would
therefore need to deal with a not neglect able time outside of the EU framework. While
the first two scenarios both assume a Catalan accession to the EU soon after
independence, a third and rather critical approach also exists. Due to the unanimity
required for the accession of a new member state to the European Union, and to Spain's
strict prohibition of a Catalan secession, critics warn that Spain might unilaterally block a
possible Catalan EU accession. The Spanish Partido Popular, one of the country's two
major political parties, is heavily opposed to any form of Catalan independence. The
majority of its conservative base, as well as many of its leading politicians, are firm
believers in the unity and indissolubility of the Spanish nation, and might feel the need to
punish an attempt to destroy said unity (Red light from Madrid, 2014). Furthermore, this
view is also borne by a perceived Spanish fear of even further division, should Catalonia
establish a successful model for independence. Even though Basque secessionism has,
latest since the end of ETA, been less active and extreme than in earlier times, Madrid
still fears a resurgence in Basque separatism in the case of a successful Catalan secession.
Furthermore, other autonomy-seeking regions in Spain, such as Navarre, Galicia or
Valencia, could also use the pretext of Catalonia to demand further rights from the
20

Spanish central government. In the eyes of Spanish politicians the only way to prevent
this development is to make sure that a Catalan state, should it come into existence, will
face severe difficulties. In 2008, this perceived fear seemed to be confirmed by the
Spanish denial to recognize the independence of the Kosovo, which unilaterally declared
its independence from Serbia (De Quetteville, 2008). While the original refusal to
recognize Kosovo was officially based on the fact that the unilateral declaration of
independence ran contradictory to international law, Rajoy later stated that a recognition
of Kosovar independence would also run contrary to Spanish interests (Rajoy se opone a
reconcer Kosovo, 2012). Yet, recent developments show that indeed the Spanish
opposition to Kosovo might not be directed against separatist movements in general, but
might rather be caused by the unilateral declaration of independence in Kosovo, which
left Serbia no say in this affair. Concerning the case of Scotland, Spanish foreign minister
Garcia-Margallo announced in February 2014 that his country would neither interfere in
the Scottish run for independence, nor would it necessarily block a Scottish EU
candidacy (Buck & Dickie, 2014). Whether or not Spain, or any other EU country, might
block a Catalan accession to the European Union, will therefore most likely depend on
the way in which Catalonia and Spain separate. As long as both states split apart in
mutual agreement and in an orderly way, little opposition to the Catalan project can be
expected on EU level. Should Catalonia however decide to declare its independence
unilaterally, it might have to face severe consequences. Other EU member states, such as
Italy, which still faces difficulties with the traditionally German-speaking region of
Southern Tyrol, could in this case oppose Catalan independence and henceforth their
accession to the European Union, in an attempt to prevent the creation of a successful
precedent for other separatist movements.
Schengen and Citizenship
Another problem which is relevant with regards to the topic of Catalan independence, is
the question of how this would affect the right of Catalan citizens to freely move around
Europe. As citizens of the European Union, Catalans can currently freely work, travel and
live in all EU member states, without having the need for any further formalities.
21

Furthermore, they are guaranteed political rights, such as the important right to vote in
European elections, to rely on the European Ombudsman, and the right to consular
protection in third countries (Art. 16, 21, 22, 24 TFEU). In addition, with Spain being a
Schengen state, its citizens can also cross the borders of all other Schengen states,
without being subject to border controls (Schengen Area, 2014). However, if Catalonia
was to secede from Spain, it would be unclear whether or not Catalan citizens could
continue to rely on these rights.
The right to European Citizenship, would most likely be lost if Catalonia was to
exit the the European Union. As some rights, such as the participation in the European
democratic process, can hardly be granted to the citizens of non-EU members, it is
inconceivable that Catalan citizens would be able keep their full citizenship rights. This is
also mentioned in the TFEU, which clearly binds the European Citizenship to the
citizenship of a member state (Art. 20 (1) TFEU). Yet, one decisive factor in this question
has so far not been put on the table the question of how Spain and Catalonia are going
to solve the issue of citizenship among them. According to current Spanish law each
Spaniard by origin, which would include all native Catalans, has the right to keep the
Spanish nationality when adopting another one next to it. If this law would remain in
force, a majority of the citizens of a future independent Catalonia would have a right to
Spanish citizenship next to their Catalan one and therewith consequently to a European
citizenship. For Spanish citizens who are not of Spanish descent, a multiple citizenship is
in most cases not possible (Tener la doble nacionalidad, 2014). Theoretically, it would
therefore be possible for a majority of Catalan citizens to keep their EU citizenship,
simply by keeping their Spanish citizenship next to their new Catalan one. Yet, it is
unclear how this will play out in practice. Spain could change its laws on citizenship, and
force inhabitants of Catalonia to decide for either one of them. An important case related
to this topic is the situation of the Faroe Islands. While they belong to Denmark, and
citizens of the islands have Danish citizenship, they do not have European Citizenship
(Folketinget, 2012). A similar approach could be taken with regards to Catalonia, where
Spanish citizens residing in Catalonia could be excluded from European Citizenship.
How the situation is going to turn out is therefore hard to predict. While it is clear that in
the case of leaving the EU Catalan citizenship will not guarantee European Citizenship, it
22

is still open whether or not Catalans will be able to access the rights of European
Citizenship via the Spanish one. On a related note however, a citizenship light, at least
for a transition period, might constitute a viable solution. With the rights to democratic
participation and usage of EU institutions being off the table, the EU could still decide to
grant Catalan citizens the right to freely reside, work and travel in other EU states, at least
until a new and durable solution can be established.
The question of an accession of Catalonia to the Schengen Convention is less
complicated than the issue about citizenship, but so far also unclear. While membership
in the Schengen Area is not directly related to membership in the European Union, it has
by now become a fixed part of the EU legal system. According to the guidelines of the
Schengen Convention, membership for non-EU members is possible, and has already
been put into practice by the accession of Norway, Switzerland, Iceland and Liechtenstein
(Schengen Area, 2014). Yet, a politically possible accession of Catalonia to the
convention could, at least in the time shortly after the independence, be constrained by
the high demands towards new member states. First of all, Catalonia would have to prove
that it is able to sufficiently control its borders, inclusive air and sea, and to establish a
functioning and effective agency for law enforcement. Only after these conditions are
met, an accession to the Schengen Area could be realistically approached, and Catalonia
could be subjected to several rounds of Schengen Evaluations, in order to examine their
readiness to join.
International organizations
Whereas the relation between an independent Catalonia and the European Union has
already been subject to various discussions, the topic of Catalonia's membership in other
international organizations has received only little attention so far. Yet, even though the
EU membership might be the most crucial aspect concerning the international standing of
an independent Catalonia, the issue of membership in organizations such as the United
Nations (UN), the World Trade Organization (WTO), the World Bank (WB), or the
International Monetary Fund (IMF) are not to be neglected. While certain rules exist
which guide the debate about the role of successor states in international organizations
23

and treaties, these are neither universally acknowledged, nor ultimately binding
(Crawford & Boyle, 2012, p. 93).
Concerning a membership of Catalonia in the United Nations, the legal
framework as well as several precedents have set out that Catalonia, if it would want to
become a member of the UN, would have to apply again. The possibility for a breakaway
region to inherit UN membership through its former state has been ruled out by the UN's
Sixth Committee, with reference to the unclear willingness of new states to subject
themselves to UN guidelines and cooperate peacefully. A membership in the UN is
always bound to the acceptance of and compliance with specific principles and rules, and
it can not be relied upon that a newly created state will automatically take over all
commitments of its predecessor in this regard (Scharf, 1995, p. 42). If Catalonia therefore
was to become independent, it would have to formally submit an application to the UN,
which would then be subject to a first voting round in the Security Council, and a second
voting round in the General Assembly. Whereas in the first round Catalonia would merely
need 9 out of 15 affirmative votes, a two-thirds majority is necessary in the General
Assembly. The only way Catalonia could be blocked, would be through a veto by one of
the five permanent members of the UN Security Council (UN Membership, 2014).
Whether or not such a veto might take place is up for the debate, and can not be finally
answered at this point. However, similar situations in the past have delivered concrete
precedents for such situations, and can therefore help us to assess the probability of
certain reactions on the side of the permanent members. Since Kosovo's declaration of
independence in 2008, China and Russia deny the country official recognition, and
therewith have so far prevented the country from joining the United Nations. However,
both countries referred their reactions to the unilateral nature of the Kosovar declaration
of independence, brand marking it as unlawful separatism (The Ministry of Foreign
Affairs of the Russian Federation, 2008; Ministry of Foreign Affairs of the PRC, 2008).
In the cases of Southern Sudanese secession from Sudan, Montenegrin secession from
Serbia, and East Timorese secession from Indonesia however, neither Russia nor China
opposed the UN membership of said countries. The difference lies with the fact that the
latter secessions were all agreed on under international law, and did therefore not violate
the constitution of the predecessor state. It can therefore be expected that, as long as a
24

Catalan independence from Spain takes place according to international law, and is not
declared unilaterally, a veto against a Catalan membership in the United Nations is
unlikely.
Regarding the Council of Europe and the European Convention Of Human Rights
(ECHR), precedents created by the cases of Serbia-Montenegro and Czechoslovakia
established that while Spain would keep its membership in both institutions, Catalonia
would have to reapply. While the Council of Europe and the ECHR are legally separate,
their close connection makes an accession to one without acceding to the other
impossible. Catalonia would have to formally reapply to the Council of Europe, and go
through the normal accession procedure. However, the ECHR would most likely still
apply to Catalonia, as the European Court of Human Rights stated that the rights are
belonging to the people, and can therefore not be taken away by a change in state
formation (Crawford & Boyle, 2012, pp. 95-98).
Another important organization Catalonia would have to join, for reasons of
practical concern as well as in order to gain further international recognition, is the
International Monetary Fund (Andrews & Davis, 2009). As the precedent of Kosovo and
Serbia has shown, in the case of a Catalan secession, Spain would rest a full member of
the IMF, and would keep all of its voting rights and quotas, as well as assets and
liabilities. Catalonia on the other hand would have to reapply as a new member. It would
first be subject to an investigation by the IMF's Executive Board, and later on by the
Board of Governors (International Monetary Fund, 2008). However, the weightedmajority voting rules of the IMF would make it comparatively hard for Catalonia to be
blocked from accession, as long as it gets a sufficient number of influential countries
behind its cause. The Kosovo managed to join the IMF against strong opposition by
Russia, Serbia and other countries, even though at the time of its application less than a
third of all UN members had acknowledged Kosovo as an independent state (Andrews &
Davis, 2009). Chances are therefore high that Catalonia could join the IMF even against
the opposition of Spain and its allies.
25

Territorial Claims
Whereas the main engine behind the Catalan thrive for self-determination is to be found
in the Autonomous Community of Catalonia, the Catalan culture and feeling of
nationhood radiates further. First brought up in the late nineteenth century, the term of the
Paisos Catalans has taken hold in the debate about Catalan nationalism and
independence today. The Paisos Catalans or Catalan Countries, are a concept which
refers to both, the concept of a linguistic and cultural unity of the region, and the idea of a
possible political unity between its current actors. It encompasses the Spanish areas of
Catalonia, Aragon, Valencia, and the Balearic Islands, the sovereign state of Andorra,
Northern Catalonia in France, and the Italian city of Alghero in Sardinia (Vilalta, 2006).
While the concept was regularly brought up by Catalan intellectuals in the past, it has so
far not been part of the current Catalan campaign for independence. This might also be
caused by the fact that the concept of the Catalan Countries proves little popular outside
of Catalonia proper, and that most parts of it are de facto indifferent to it. Some, such as
the Balearic Islands, have even outright denied the existence of the Paisos Catalans, as
well as their membership in it (Els Pasos Catalans no existeixen, 2013). On the same
note, it can not be expected that either France, Andorra or Italy are willing to grant any
independence. Furthermore, it is thinkable that the neighbouring countries of Catalonia
will link their recognition for a new Catalan state to the relinquishment of any territorial
demands by Catalonia. The concept of a unity of the Paisos Catalans seems therefore
rather a nationalist elite project than an a possible scenario for the future. While it might
be brought up again in the future, it will most likely not lead to any substantial disputes
over the possible borders of an independent Catalonia.
26
Economic Challenges
With the issue of economics being one of the core points in the Spanish-Catalan
relationship, and serving as a major argument in public debates, it is crucial to examine
whether an independent Catalonia would truly be in a better financial shape than a
Catalonia which is part of Spain. Whereas the fiscal deficit of Catalonia is undeniable, as
well as its leading economic role in Spain, it is so far unclear in how far an independent
Catalonia would be economically viable (Credit Suisse, 2012). Naturally, this will depend
on many different factors, which can not all be fully assessed at this point. It will,
amongst others, depend on the future relationship between an independent Catalonia and
the European Union, the Spanish reaction to Catalan independence, and how Catalonia is
going to deal with the delicate question of its post-independence currency. Still, certain
factors can already now be assessed, or at least preliminarily evaluated. These concern
not only possible losses in international trade and investment, but also questions about a
27

partial transfer of Spanish national debt to a new Catalan state, and the necessity for
Catalonia to build up an own state apparatus.
Whereas Catalonia is often described as the powerhouse of Spain, generating
around one-fifth of the total Spanish GDP, its growth rates have been declining of the last
decade, especially in comparison with structurally similar regions of the European Union.
The blame for this downturn is often given to the Spanish state, and its system of fiscal
solidarity among the autonomous communities (Griffiths, Guillen & Martinez i Coma,
2013, p. 12). In 2011, Catalonia's fiscal deficit, the difference between the sums of taxes
raised and spent in Catalonia, amounted to 18,5 billion Euro, or around 8,8% of the
Catalan GDP. Over a broader time frame, between 1986 and 2010, Catalonia contributed
19,7% to the revenues of the Spanish state, while on average merely receiving 11,2%
back in government expenditures (Departamento de Economa y Conocimiento, 2014). In
the case of a Catalan secession from Spain, this fiscal deficit would vanish, and allow the
Catalan government to use these funds for local investments in infrastructure, social
policies, and economic incentives. Yet, even though Catalonia is among Spain's most
prosperous regions, it is still dependent on funding coming from the central state. Due to
the financial crisis, Catalonia requested another nine billion Euros bailout from the
Spanish state in 2013, in order to be able to repay its debts. Prior to this, Catalonia
already applied for five billion Euros as bailout assistance in 2012, which was paid for by
a Spanish public fund (Catalonia asks Spain for Bailout, 2013). However, while Catalonia
needs Spanish assistance in this case, it is important to note that the requested bailout for
2013 is merely half of the regions annual fiscal deficit. It is therefore questionable
whether Catalonia would have needed such a bailout in the first place, if the fiscal
pressure put on it by the Spanish state would have been lower. Overall, it is undeniable
that Catalonia is running a net loss concerning monetary flows with the Spanish central
state. Yet, a secession which would end the fiscal deficit for Catalonia would
simultaneously end benefits the region is currently drawing from its union with Spain,
such as in the areas of trade and labour migration.
Traditionally, the Catalan economy has been among the most modern ones in
Spain, as it industrialized early and on a large scale (Greer, 2007, p. 21). While today
there has been a shift away from tradition heavy industry in the region, moving more
28

towards the service sector and new knowledge-based industries, the industrial sector
still is a crucial part of the Catalan economy (Toms & Munos, 2009). The industrial
sector itself is diversified, and ranges from chemical industry and car production to
textiles and machinery production. All of these industries would be put to the test during
a secession, as most of them are dependent on the import of intermediary goods, and on
exports of the final goods in order to have a big enough market. In the case of an
exclusion of Catalonia from the European common market, these industries are likely to
suffer (Credit Suisse, 2012). While bilateral trading agreements or an accession to the
EEA are in the realm of the possible, this can not be taken for granted. Furthermore, it is
not clear in how far Catalan industries will be successful at developing new markets for
their products, and whether this will be a sufficient offset for their losses of European
trade volume. The agricultural sector of Catalonia is very small, and accounts for merely
three percent of the Catalan economy. While also this sector might be harmed through an
exclusion from the European Union and consequently the CAP, this alone will not put the
Catalan economy under serious pressure. On the contrary, a part of the Catalan economy
which is likely to be harmed is tourism. So far, Catalonia is the most successful Spanish
region concerning tourism, with revenues of nearly thirteen billion Euros each year
(Consell General de Cambres de Catalunya, 2012) Whereas extreme drops in tourist
numbers seem unlikely, especially in the long run, the inconveniences of visa regulations
and a foreign currency necessary for travels to Catalonia could discourage at least some
tourist from visiting the country.
While Catalonia accounts for around one-third of overall Spanish exports, the
region is still heavily dependent on Spain for trading. Currently more than 60% of goods
leaving Catalonia are staying in Spain, and are merely exported to other provinces.
Andaluca, Aragon and Valencia together account for around 30% of Catalan exports, and
therefore import more Catalan goods than Germany, Italy, Portugal and the United
Kingdom together. Catalonia's main foreign trading partner is France, to which 14% of
Catalan exports go (Credit Suisse, 2012). If Catalonia secedes, a continuation of these
strong trade patterns with other Spanish provinces seems highly unlikely. First of all, a
secession of Catalonia would most likely see the country leaving the European Union,
and therewith the Single Market. As a third state without any special agreement, Catalan
29

products exported to EU countries would be subject to the Common External Tariff of the
European Union, and therewith become more expensive (The Combined Nomenclature,
2014). This would hit Catalonia especially hard, as the EU's external tariffs are high on
food and clothes, areas in which the Catalan economy is strong (Credit Suisse, 2012).
Yet, Catalonia might be able to avoid the creation, or at least longevity, of this trade
barrier. As mentioned earlier in this paper, even if Catalonia might not be able to join the
EU quickly as a full member, it could still apply for associate membership with the
European Union or join a free trade agreement. While the content of a possible associated
membership is not clear yet, a free trade agreement would most likely see all tariff
obstacles to trade between the two entities removed. Yet, precedents have shown that
even without major tariff barriers being erected, the division of states can lead to a sharp
decrease in trade among its successor states. After the split of Czechoslovakia in 1993,
trade between the newly founded Czech Republic and Slovakia fell by 25% compared to
their trading volume when they were united even though both states kept a free-trade
agreement after their separation (Lopatka, 2011). A Catalan secession from Spain could
therefore hurt trade between both entities extensively, even in the case of an independent
Catalonia reaching a free trade agreement with the European Union. Whether Catalonia
would be able to fully make up for these losses by increasing exports into other countries
is not clear yet, but will at least in the short-run be unrealistic. Another problem which
could hinder Catalan exports to Spain, are possible boycotts on the side of the Spanish
population. Already in 2006, when political difficulties between Madrid and Barcelona
reached a so far unknown level, a boycott against sparkling wine from Catalonia was
taking place in Spain, noticeably diminishing Catalan exports to the rest of Spain
(Tagliabue, 2006). Should Catalonia secede from Spain, especially if under a unilateral
declaration of independence, a new boycott by Spanish citizens against Catalan goods is
thinkable.
If Catalonia is going to secede, the economic conditions of a new Catalan state
will to a huge extent rely on whether the split will be under amicable circumstances. Not
merely because this will predetermine how a future relationship between both countries
might look, but also because it will set straight the financial framework with which an
independent Catalan state will have to start. If a country splits apart, no matter whether
30

partially through a seceding province, or completely, the question of who takes over
which debts and assets is essential. However, so far there is no official and universally
valid guideline on how to deal with such cases, leaving the decisions up to the state(s)
concerned (Rowlands, 1997). In the run up to the Scottish referendum on independence
several possible solutions have been proposed, each of which calculates a Scottish share
of British debt on a different basis. A first proposal envisages a split of the national debt
according to population figures, in which the total debt is divided through the number of
citizens, and afterwards allocated to the dividing entities according to population (Wills,
2014). In this case, if a similar model was used, Catalonia would be faced with 16% of
Spanish debt, leaving the newly independent country with a starting debt of already 154
billion Euro, next to Catalonia's current debt of already of around fifty billion Euro
(Duarte, 2013). This however could be a beneficial solution for Catalonia, as the region's
GDP per capita is among the highest in Spain. Would the division of debt follow the
second proposal instead, which calculates the shares on the basis of economic output,
Catalonia would have to accept around 192 billion Euros instead, 20% of public Spanish
debt. Yet, the adoption of other models, calculating public debt on the basis of historic
contributions, imports and exports, or other means, are also possible. In the case of a
mutually agreed separation however, Catalonia can be expected to take over parts of the
Spanish public debt. Yet, the situation might look different in the case of a Catalan
secession without Spanish agreement. In such a scenario, which would probably cause
Spain to not recognize Catalan independence, Catalonia could use the public debt as a
trump. It could then link its adoption of a fair share of the public debt to the recognition
of its independence by Spain, forcing the country to either come up for all the debts itself,
or acknowledge Catalan independence in a legally binding way. However, this might be a
dangerous game for Catalonia to play, as it would lead to great distrust towards the
country from international investors and banks, who might doubt Catalonia's financial
credibility (Rowlands, 1997). This topic is further related to the general questions about
how Catalonia and Spain would divide up different public assets, social security
guarantees, federal property and so on. Yet, this exceeds the scope of this paper, and is to
be researched by other scholars in the case of a dawning Catalan secession.
In the end, many of the questions about the economic performance and viability of
31

an independent Catalonia depend on the question of which currency such a Catalan state
will use. Not only would this have important impacts on the trust of foreign investors into
the country, but it would also affect trade and tourism to a considerable extent. In light of
Catalonia's exit from the European Union, it is often assumed that in the same step,
Catalonia would also have to abandon the Euro, which currently serves as the official
currency of eighteen out of the twenty-eight EU member-states. What would happen in
the case of Catalonia having to abandon the Euro, has so far not been settled, or even
been subject to detailed and open discussion (Sills & Duarte, 2013). When assuming that
a direct membership of Catalonia in the Eurozone is unrealistic, there are three broader
options left for the country.
First of all, Catalonia could decide to unilaterally keep the Euro as its de facto
currency, while formally exiting the institutional framework of the Eurozone. While this
model has so far not seen major support on the political level, its viability has already
been proven successfully in related cases. In January 2002, Kosovo and Montenegro both
unilaterally adopted the Euro as legal tender in their countries, without concluding any
formal agreement with the European Union (The euro outside the euro area, 2014).
Already leading up to the introduction of the Euro, both countries started using the
Deutsche Mark in the 1990's, in order to be independent from the troublesome and
politically controlled Yugoslavian Dinar. During this period, the two countries profited
heavily from the benefits of using a major currency as their legal tender not only did it
prevent them from the inflation which struck the rest of Yugoslavia during the 1990's, but
it also facilitates foreign trade and gives a certain amount of economic stability to the
respective countries (Hanke, 2007; Mnch, 2010). While the unilateral adoption of the
Euro would leave Catalonia without any independent monetary or exchange rate policies,
its benefits and its quick availability make it a worthwhile option. So far, there has also
been no opposition on the side of the European Union to this. On the same note, JeanClaude Trichet announced in 2006 that the European Union would not either encourage
nor deter third countries from using the euro, therewith de facto granting every willing
country to use the Euro as legal tender (Lekic, 2006). Should Catalonia therefore leave
the Eurozone officially, it could still decide to keep the Euro as its legal tender
nevertheless. Even though this might not be a solution in the long run, it could give
32

sufficient stability to the Catalan economy until the country either joins the European
Union again, and therefore can adopt the Euro officially, or until it is stable enough to
issue an own strong currency.
As a second option, Catalonia could decide to introduce an own currency, which it
could peg either to the Euro or the Dollar. This model has been chosen by many European
and even African states, both EU-members and non-members, and can be established
unilaterally. In the European Union this model is used by Bulgaria, Hungary, Romania
and the Czech Republic for example, while outside of it also Morocco, Tunisia and Serbia
pegged their currencies to the Euro (Links to other currencies, 2014). As opposed to a
completely independent currency, a pegged exchange rate would give Catalonia the
benefit of facilitating trade with and investment from other countries, as it would make
the Catalan currency and economy more stable. Due to the consequently resulting
increase in price predictabilities for trade, and also the decreasing risk of inflation,
Catalonia could mitigate at least parts of the trade losses it would risk by leaving the
European Common Market. However, at the same moment, pegging the Catalan currency
to the Euro would diminish the Catalan ability to appreciate or devalue its own currency,
and to use monetary policies in order to influence the domestic economy and
international trade.
The third option would see a completely independent Catalan currency, which
would not be pegged to any other major currency. While in this case Catalonia would
have full control over its currency and could theoretically appreciate, devalue and issue it
according to its own needs, several risks would be apparent. First of all, the prospect of a
denomination of Catalan savings from Euro into a new and most likely weaker currency,
could lead to anxiety among the Catalan population, and consequently to a huge bank run
in the country. The only chance the Catalan state would have to counter this, would be the
implementation of capital controls. Catalonia would, at least for a transition period, have
to restrict the amounts of money which could be withdrawn from banks and brought out
of the country, in order to guarantee the stability of its new currency. However, at the
same moment these actions would cause distrust among international investors and
foreign holders of capital in Catalonia, who could be inclined to protect their money from
further restrictions by Catalonia (Lavelle, 2013). Should Catalonia however manage to
33

keep its currency stable during the first years, which would mainly depend on the trust
placed in it by investors and citizens alike, it might be able to develop a strong and
independent currency on its own. Switzerland and Norway both showed that small and
wealthy countries are able to coexist next to the European Union with strong and
independent currencies of their own. Yet, this would depend on the ability of Catalonia to
publish a concrete and well-thought proposal for launching its own currency and
monetary policy.
Even though the topic of currency is one of vital importance for every
independent state (or state claiming independence), so far there has been no specific plan
presented by Catalonia's regional government, on how to solve the issue of an
independent Catalonia's currency (Ortiz, 2014). While it can be argued however that Mas'
insistence on a European Catalonia, keeping all benefits of membership, is an act of
naivety, it can also be understood as a conscious trick to keep the electorate on his side.
Recent polls have shown that the majority of Catalonian citizens would be far less
supportive of an independent state, if this would mean for them to lose their rights and
prerogatives as citizens of the European Union together with the right to use the Euro
(Ortiz, 2014). This would support the thought that Mas might already have a plan for a
Catalonia outside the Eurozone worked out, but simply tries to keep this contentious topic
away from his voters for as long as possible, in order to guarantee maximum support for
his strive for independence.
5. Conclusions
In the end, it is hard to say what constitutes the best path for Catalonia to chose. Too
many variables are dependent on the decisions taken by Spain and the European Union,
and it can not be entirely foreseen what route they will take. Will the Spanish government
change its attitude towards Barcelona, and be more lenient, allowing progressive reforms
of the statute of autonomy? Or will they continue to ignore Catalan demands, creating
further discontent among the Catalans, and therewith the possibility for more extremist
Catalan parties to rise to power? And in the case of a unilaterally declared independence
34

of Catalonia, will Spain try to punish Barcelona for its actions, isolating them
internationally and threatening them with sanctions? Or will pragmatism characterize the
relationships between an independent Catalonia on the one hand, and Madrid and
Brussels on the other one? So far, most statements from the Spanish side are pointing to a
strict attitude towards Barcelona Madrid seems unwilling to change its stance on the
topic, and is confident to keep the upper hand in this debate (Hedgecoe, 2014). European
Union officials try to avoid interference in the domestic Spanish situation, but are
nevertheless not keen on creating any hopes for Catalan dreams of being the European
Union's twenty-ninth member-state. Yet, whatever the final reactions of both Madrid and
Brussels will be, there are nevertheless some conclusions which can be drawn at this
point already.
If Madrid truly wants to safeguard Spanish unity from a realistic rather than
ideological point of view, there is no other way than moving towards Catalonia, and to
take Catalan demands seriously. There is neither the necessity, nor the possibility to grant
Catalonia everything it demanded in its Statute of Autonomy from 2006. Not least
because some of their demands, such as full fiscal autonomy, would not only harm the
functioning of the Spanish state substantially, but would also run contrary to the solidarity
of the regions enshrined in the Spanish constitution. Nevertheless, it is definitely
possible, as well as advisable, for Madrid to make at least some steps towards the Catalan
position, such as outlined in this paper. It could try to accommodate Barcelona with
measures such as the introduction of a ceiling on fiscal transfers, a symbolic
acknowledgment of their nationhood, similar to the Canadian case, or the allowance of
further autonomous rights in miscellaneous areas, which would do little harm to Madrid
itself. Similarly to the Constitutional Treaty of the European Union, which was first
rejected by some member-states, but passed in merely slightly changed form under the
name of the Lisbon Treaty several years later, a lot is about feelings and symbols in this
case. It is not necessary that either side accepts all conditions put forward by their
negotiation partner, but it is possible to find a solution in which both sides can win under
a responsibly negotiated compromise. Such a scenario could see the Spanish conservative
majority keep its image as the guardians of Spanish unity against separatism, while the
majority of Catalan citizens could content themselves with the knowledge of having
35

received at least certain concessions from Madrid. Most importantly though, such a
solution would show Catalans that Spain is not deaf to Catalan demands, but that indeed a
willingness exists to tackle these problems, and solve them to the benefit of everyone.
Yet, if Madrid should refuse to do so, and refrains from accommodating
Barcelona in any way, it is unsure how long Catalonia will continue to accept this. While
so far the Catalan majority for independence has refrained from serious public demands
to unilaterally declare independence, this can not be taken for granted forever. A political
change in Barcelona, which could see a more secessionist party come to power, could
further fuel the tensions, and be the first step towards full independence. The case of an
amicable separation of both nations, through a referendum such as in Scotland in 2014, is
close to impossible. Not only would it be illegal under the Spanish constitution, but it
would also raise further fears in Madrid, that also the Basque Country or Galicia might
soon demand similar rights (Wilson, 2014). Should Catalonia decide to declare
independence unilaterally, which seems like the more realistic scenario, questions about
Spain's reaction will be crucial. Yet, the often portrayed idea of a hostile Spain, blocking
Catalonia out of the European Union and isolating it, is rather unlikely at least in the
mid- and long run. Catalonia is one of Europe's leading industrial provinces and a strong
economic actor, and as such has an important role in the European economy (Tremosa i
Balcells, 2013, p. 60). Therefore, it seems unlikely that other EU member-states will be in
favour of a long term exclusion of Catalonia from all European treaties and institutions,
as this would not only harm Catalonia economically, but also other parts of Europe.
Although it is of course questionable whether Catalonia will either directly or over the
course of a few years join the European Union as a full member-state, it can be assumed
that the European Union will find a way to keep an independent Catalonia a part of the
European Common Market, as well as of the Schengen Area. And even though Spain
might not directly accept these solutions or be in favour of them, increasing pressure put
on it by other EU member-states, together with certain concessions it might be able to
receive from the European Union and Catalonia, might be able to alter Spain's opinion.
Yet, even without a full European Union membership, Catalonia might have good
chances to be economically viable, supposed that at least certain agreements with the
European Union can be found on trade and free movement of goods and people. For the
36

currency question an independent Catalonia would face, the solution of a unilateral
adoption of the Euro as official currency, as done already by Kosovo and Montenegro,
would constitute a sufficient solution. And also the accession to other international
organizations, such as the IMF, WTO or UN, should not contain any further problems for
an independent Catalonia. The main question therefore rests on the stance the European
Union would take towards an independent Catalonia. Would it choose the pragmatic
solution, placating Spain and trying to keep the economic and political damage to Europe
as little as possible? Or would it act in defence of other European states facing similar
issues such as Italy with South Tyrol, Belgium with Flanders, and France with Corsica
setting an example against cases of unilateral independence.
Leaving the European boundaries, and looking at the Spanish-Catalan situation
from a more global scale, it becomes apparent that it is not only a regional issue, but an
important example for the future of independence movements in our time. Independence
movements exist in numerous states all over the world today, and constitute a
phenomenon which is unlikely to vanish any time soon (Apps, 2013). Although most of
them are based on demands for cultural freedom, recognition and self-determination,
their goals often range somewhere between increased autonomy and complete
independence. What other states can learn from the Catalan situation, is that wilful
ignorance of such sub-national independence movements does not only do nothing to
improve the situation, but that it might even intensify it. In the case of Catalonia,
Madrids strict and conservative negotiation attitude successfully turned a merely
autonomy seeking movement into a secessionist one. Instead of protecting national unity,
Spain's strict line brought it into danger. It created the chance for Catalonia to identify
themselves even more against the state as their suppressor, and helped to widen the gap
between the official national identity of the state, and the group identities of its different
parts. It is therefore of utmost importance to understand that ignoring and suppressing
these movements is neither the right solution, nor a viable one. Instead, a more open way
of dialogue has to be found, in which in the problems between states and their
independence-seeking sub-territorial entities have to be addressed in a fair and
unprejudiced manner. If a multilingual and -national state does no longer function
satisfactory for all participating parties, solutions have to be found. They can lie within
37

changes of the constitution to devolve power to regional entities, the public embracement
of a state's multicultural identity, or the chance for people to decide on their own fate
through a referendum. Belgium has over years devolved powers to its Flemish, Walloon
and German-speaking parts, and although their situation is complicated, their youngest
generation embraces the notion of a multilingual Belgium, and shows a decline in
secessionist tendencies (Sweden & Jans, 2009, p. 27). On the other side of the Atlantic,
Canada has followed a cooperative stance with regards to Quebec, and has so far allowed
them to vote on independence already twice with the result that the inhabitants of
Quebec did not only vote against an independence and for a united Canada, but also that
the popularity of Quebec's main pro-independence party decreased strongly. The open
acknowledgement of a sub-national independence movement does not always entail the
beginning of the end of a state often it merely means that the state will change. Yet, as
states are made up by people, and it is them with whom the sovereignty and power of the
state lies, they should have a right to decide too.
38
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Catalonia and Spain Separation or Divorce?

CATALONIA AND SPAIN SEPARATION OR DIVORCE?

CATALONIA AND SPAIN SEPARATION OR DIVORCE?

2. The Catalan Claim to Independence

3. Revisiting the Statute of Autonomy

CATALONIA AND SPAIN SEPARATION OR DIVORCE?

CATALONIA AND SPAIN SEPARATION OR DIVORCE?

CATALONIA AND SPAIN SEPARATION OR DIVORCE?

CATALONIA AND SPAIN SEPARATION OR DIVORCE?

CATALONIA AND SPAIN SEPARATION OR DIVORCE?

CATALONIA AND SPAIN SEPARATION OR DIVORCE?

2. The Catalan claim to independence

CATALONIA AND SPAIN SEPARATION OR DIVORCE?

CATALONIA AND SPAIN SEPARATION OR DIVORCE?

CATALONIA AND SPAIN SEPARATION OR DIVORCE?

CATALONIA AND SPAIN SEPARATION OR DIVORCE?

CATALONIA AND SPAIN SEPARATION OR DIVORCE?

3. Revisiting the Statute of Autonomy

CATALONIA AND SPAIN SEPARATION OR DIVORCE?

CATALONIA AND SPAIN SEPARATION OR DIVORCE?

CATALONIA AND SPAIN SEPARATION OR DIVORCE?

CATALONIA AND SPAIN SEPARATION OR DIVORCE?

CATALONIA AND SPAIN SEPARATION OR DIVORCE?

CATALONIA AND SPAIN SEPARATION OR DIVORCE?

CATALONIA AND SPAIN SEPARATION OR DIVORCE?

CATALONIA AND SPAIN SEPARATION OR DIVORCE?

CATALONIA AND SPAIN SEPARATION OR DIVORCE?

CATALONIA AND SPAIN SEPARATION OR DIVORCE?

CATALONIA AND SPAIN SEPARATION OR DIVORCE?

CATALONIA AND SPAIN SEPARATION OR DIVORCE?

CATALONIA AND SPAIN SEPARATION OR DIVORCE?

CATALONIA AND SPAIN SEPARATION OR DIVORCE?

CATALONIA AND SPAIN SEPARATION OR DIVORCE?

CATALONIA AND SPAIN SEPARATION OR DIVORCE?

CATALONIA AND SPAIN SEPARATION OR DIVORCE?

CATALONIA AND SPAIN SEPARATION OR DIVORCE?

CATALONIA AND SPAIN SEPARATION OR DIVORCE?

CATALONIA AND SPAIN SEPARATION OR DIVORCE?

CATALONIA AND SPAIN SEPARATION OR DIVORCE?

CATALONIA AND SPAIN SEPARATION OR DIVORCE?

CATALONIA AND SPAIN SEPARATION OR DIVORCE?

CATALONIA AND SPAIN SEPARATION OR DIVORCE?

CATALONIA AND SPAIN SEPARATION OR DIVORCE?

CATALONIA AND SPAIN SEPARATION OR DIVORCE?

CATALONIA AND SPAIN SEPARATION OR DIVORCE?

CATALONIA AND SPAIN SEPARATION OR DIVORCE?

CATALONIA AND SPAIN SEPARATION OR DIVORCE?

CATALONIA AND SPAIN SEPARATION OR DIVORCE?

CATALONIA AND SPAIN SEPARATION OR DIVORCE?

CATALONIA AND SPAIN SEPARATION OR DIVORCE?

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