Catalonia's leader Artur Mas says the powerful region's economy can
stand tall in Europe without Spain. But could Spain survive without
Catalonia? The prospect of an independent Catalonia of 7.5 million
people lying to the northeast of Spain seems distant with Prime
Minister Mariano Rajoy's government vowing to block any referendum.
In a snap election Sunday, voters slashed the majority held by Mas'
conservative alliance, Convergence and Union, but boosted support for
left-wing pro-independence forces. Despite having its wings clipped,
Mas' alliance promised to seek a popular consultation on
self-determination.
The question of statehood overwhelmed any debate of the Catalan
economy and its more than 40-billion-euro (US$50 billion) debt, but it
also highlighted Catalonia's importance to the rest of Spain. "We
could get along quite well," Mas boasted on Spanish public television
two days ahead of the election, defying some analysts' forecasts of an
economic catastrophe if Catalonia splits from Spain.
As a separate nation, Catalonia would rank seventh in the 27-member
European Union in terms of wealth creation and ninth in terms of its
trade capacity, the Catalan chief said. But for the rest of Spain,
already sunk in recession, its banks in crisis and one in four workers
unemployed, analysts warn the outlook could be even grimmer without
Catalonia.
Independence for Catalonia is a "very unlikely outcome," said Raj
Badiani, London-based analyst at IHS Global Insight, a research group.
But if it eventually did occur, the first impact would be a loss of
tax receipts, he said in an interview.
Indeed, many Catalans complain Madrid collects far more in taxes from
the region than it returns. It estimates the "fiscal deficit" at 16
billion euros (US$21 billion) a year, a figure Madrid disputes.
"There would obviously be a net impact on the rest of Spain's tax
receipts," Badiani said.
"Given that it is already facing the likelihood of missed fiscal
targets both this year and next, and tax receipts are already being
squeezed by a recession that is exhibiting depression-like qualities,
that would be a fatal blow in terms of it being able to deliver its
fiscal goals over the next two to three years.".
But the loss of Catalonia, which accounts for one-fifth of Spain's
total economic output and more than one-quarter of its exports, would
also hurt the broader economy, he said.
"If Catalonia was suddenly to disappear I think you would be talking
about a deeper and far more prolonged recession in the rest of Spain,"
Badiani said.
Perhaps more dangerously, a breakup of Spain would give the sense that
Madrid was losing control of the nation.
"And then you are pretty much in the dark. Nobody really knows what
the impact would be on the rest of Spain. That is what obviously
spooks bond markets," he said.
Xavier Cuadras Morato, an economist at Barcelona's Universitat Pompeu
Fabra, agreed that a divorce between Catalonia and Spain would hit the
Madrid taxman in the pocket.
"If the Spanish economy already needs to make adjustments, those
adjustments especially in the public sector would be somewhat more
serious, somewhat larger," Morato said.
In any divorce agreement, Spain would likely insist that Catalonia
pick up a share of Spain's 685-billion-euro sovereign debt, said a
report by think tank Instituto de Estudios Economics.It estimated the
Catalan share at 128 billion euros.
But other economists warned creditors would be unwilling to swap from
holding Spanish debt to holding a Catalan junk bond.
Spain would suffer, too, from the loss of Catalan exports.
"It would be very difficult because they would lose 30 percent of
their export capacity, they would lose one of the parts of Spain that
has been most dynamic in modern times," warned Edward Hugh, an
economist based in Barcelona.
"If they have got problems implementing reforms and going forward
anyway, what would it be like without the Catalans?" he asked.
"How would Madrid survive supporting all the rest of the regions that
don't work?"
http://www.chinapost.com.tw/commentary/afp/2012/11/27/362245/p1/Can-Spain.htm
No comments:
Post a Comment