Spain’s Catalonia is voting on independence October 1, 2017




catalonia spain barcelona
Students
attend a demonstration in favor of the banned October 1
independence referendum in Barcelona, Spain September 28,
2017.

Juan
Medina/Reuters



  • Catalonia, a region in Spain, plans to vote on
    independence this Sunday in a referendum declared illegal by
    the Spanish government.
  • The Spanish government has recently cracked
    down on the referendum.
  • Even if the government manages to stop the vote,
    simmering tensions could pose a challenge for Spain going
    forward, analysts say.

Catalonia, a region in Spain that includes Barcelona, plans to
vote on independence this Sunday in a referendum that has been
declared illegal by Spanish authorities.

The question over the referendum has turned into one of Spain’s
biggest
political challenges
” since the country returned to
democracy after the death of dictator General Francisco
Franco in 1975.

The Spanish government has recently taken a strong stance against
the referendum by raiding offices, shutting down pro-independence
websites, and arresting officials. The
pro-independence movement in Catalonia, meanwhile, insists the
vote will continue as planned this weekend.

Catalonia, which has its own language and culture, is one of
Spain’s economic
powerhouses
. It contributes nearly one-fifth of the country’s
total GDP, and has an economy
larger
than that of Portugal.

About half of the residents in Catalonia support leaving Spain,
according to opinion polls cited by
the New York Times
, which reports that the movement
gained speed after the pro-independence government won the
majority in the regional parliament back in 2015.

There has reportedly been a “widespread
belief in Spain, especially on the political right, that the
government has been too lenient about Catalonia’s inching towards
indepedence in recent years. Others argue that the recent
crackdown has only helped to further unite the pro-independence
groups in Catalonia.

Even if the government manages to stop the vote, the simmering
tensions could pose a challenge for the administration going
forward, analysts say.

“We continue to think the vote is unlikely to lead to Catalonia’s
exit from Spain (Catalexit), and that snap regional elections
will follow,” a Citi Research team led by Antonio Montilla said
in a note to clients earlier this week. “We stress, however, that
the risk of even larger confrontations between the sides
post-referendum is rising.”

Tensions rising between Madrid and pro-independence movement

Tensions between the regional Catalan pro-independence government
and the central government in Madrid have escalated significantly
in recent weeks. And the government of Prime Minister Mariano
Rajoy, who was described earlier this year as “famously
cautious
,” recently made “unprecedented
efforts
” to halt the referendum.


Last week
, Spanish police raided three regional government
offices in Catalonia and arrested 12 senior officials. Catalonian
officials said Spain’s Guardia Civil, or paramilitary national
police, searched several government departments, including the
offices of the presidency, economic affairs, and foreign
relations, on Wednesday morning.

Madrid also shut down websites and advertising campaigns
promoting the vote, sent thousands of police officers from
outside of the region, and raided the offices of the companies
that would print the paper ballots,
according to the New York Times
.


spain prime minister
Spain’s
Prime Minister Mariano Rajoy

Jonathan
Ernst/Reuters


The Spanish government has taken control of Catalonia’s
essential public spending, a move that might suggest Madrid
is taking a step forward to clamping down on the region’s fiscal
autonomy, Montilla argued.

US President Donald Trump
said
earlier this week that “Spain is a great country, and it
should remain united,” while State Department spokesperson
Heather Nauert
said
earlier this month that the US has no position on the
referendum.

Tensions go back decades, but taxes appear to be a recent sore
spot

Tensions between Catalonia and Spain go back decades.
According to Bloomberg
, the region’s push
for autonomy was a factor in the Spanish Civil War; afterwards
the Franco regime cracked down on the language, on Catalan
institutions, and on the people themselves.

After the dictator’s death, the Spanish constitution of
1978, which says the nation is “indivisible,”
gave Catalonia language rights and control over its healthcare
and education.

Recently, nationalists in Catalonia have
pointed
 to the region’s language and culture,
and have argued that it subsidizes the rest of Spain in an

unfair redistribution of tax revenues
. The region pays
about €10 billion ($11.8 billion) more in taxes than it gets
back, according to data from the Spanish Treasury,
as

cited by Reuters
. By comparison, Andalusia, the poorest
region, gets almost €8 billion ($9.4 billion) more than it
pays.

“One key explanation for the rise in independence supporters in
the past few years is tax. Madrid has refused to allocate more
funds to Catalonia after the financial crisis,” according
to HSBC research analysts Ioannis Sokos and Anne Karina
Asbjorn.”Since 2011, support in favour of independence has
risen from around 30% to 50%.”

Not the first referendum

Catalonia held an independence referendum back in 2014, but the
Spanish government did not intervene in that case, despite the
constitutional court’s order to stop it.

“[N]ow the situation is different. In 2014, the tensions between
Madrid and Barcelona had not escalated to the current levels,”
Fabio Balboni, European economist at HSBC, said in a note to
clients last Thursday.


spain catalonia independence vote
Protesters
shout slogans and wave Esteladas (Catalan separatist flags) as
they gather outside the High Court of Justice of Catalonia in
Barcelona, Spain, September 21, 2017.

Susana Vera/Reuters

“There was not a government elected on a pro-indepedence
platform, and no threat to proceed unilaterally after a ‘yes’
vote. There was also no intervention by the civil guard to seize
the ballots, even though the Constitutional Court had also deemed
the referendum illegal then,” he added. “In our view, the chances
of a similar outcome to 2014 are low.”

Back then, the majority voted in favor (80.7%), but turnout was
relatively low (37%), according to data from HSBC. 

What happens if Catalonia declares indepedence?

Catalan President Carles Puigdemont
suggested
that if the “yes” vote wins, the government’s
pro-indepedence government might declare indepedence within
days.

Should that happen, some have argued there’s a chance the Spanish
government can choose to invoke Article 155, which allows the
Spanish government to intervene directly in autonomous regions
like Catalonia, according
to the FT
. It has
never
been invoked.

As HSBC’s Balboni explained:

“If Catalonia goes ahead with the referendum, and afterwards
declares indepedence, unilaterally — on a low turnout, ‘yes’ is
more likely to win — passing a new constitution, and possibly
establishing regional Ministries and even armed forces, Madrid
will probably trigger Article 155, and tensions are likely to
escalate rapidly. In turn, this could affect negatively consumer
and investor confidence, harming the economy […] and leading to
broader political and economic consequences that are hard to
predict at this stage.”

Also notably, if Catalonia were to leave, it would have to

reapply
for EU membership, which Spain can block. 



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