Financial Times

August 12, 2014 6:17 pm

Catalonia’s shame, a stain on Spain

Pujol scandal presents opportunities as well as dangers

Spaniards opposed to Catalan independence, who include Mariano Rajoy, the prime minister, must be rubbing their hands in glee at the scandal unfolding in the northeast of their country. Jordi Pujol, the father of modern Catalan nationalism and founder of the Convergència Democràtica party, has admitted to tax fraud in an investigation that has already pulled in his son.

The scandal seems likely to disrupt significantly the debate over Catalan independence and, if mismanaged, could lead to a hardening of positions in the pro- and anti-camps. If handled well, however, it could instead provide an opportunity for Mr Rajoy and Artur Mas, head of the centre-right Convergència party and president of Catalonia, to engage more constructively.

Mr Pujol, who was Catalan president for 23 years until 2003, stunned supporters last month by revealing he had kept undisclosed bank accounts outside Spain for the past 34 years. His party has dominated regional politics for decades and, under Mr Mas, has moved from a moderate nationalist stance to outright support for an independent state. Mr Mas says he will hold an independence referendum in November, a plan adamantly opposed by the Spanish political establishment.

The independentistas base their case in part on arguments that Catalonia, which represents a fifth of the country’s output, gives to the centre much more than it receives – €16bn of fiscal transfers a year, on regional government estimates. That Mr Pujol was himself withholding money owed to the Catalan coffers undermines the moral authority of this argument.

It also taints many Catalans’ belief that Mr Pujol, in addition to his status in Catalonia, epitomised its traditional values of hard work and straight-speaking.

Mr Pujol took care to bolster this image. In the latest editorial on his website – posted after Germany’s victory in the football World Cup – he wrote: “It’s good to feel pride when we have done something well without cheating.” His unmasking as a hypocrite and tax evader cannot but undermine support for his party and for his nationalist cause. Indeed, it may put potential voters off politics altogether – a growing problem in Spain where, at the European elections in May, parties of sitting MPs garnered barely half the vote.

Much of the electorate’s dissatisfaction is down to the catalogue of scandals that have roiled Spain recently and exposed the sordid underbelly of many in the country’s elite. Catalans had, to some degree, felt above these scandals – a misplaced confidence, as it turns out. The litany of misdemeanours suggests institutional renewal in Spain remains a priority.

For Catalonia, the scandal presents opportunities as well as dangers. There may now be infighting in its governing coalition as Convergència tries to make light of the Pujol affair while others demand a deeper investigation. Mr Pujol has resigned his benefits as former president of the party, but this is unlikely to be enough.

A breakdown in the coalition would result in Mr Mas calling an early election, in which more pro-independence parties could gain power. If that happened, a new Catalan parliament might be tempted to issue a unilateral declaration of independence, plunging the country into a constitutional crisis unparalleled since the transition to democracy in the late 1970s.

Mr Rajoy should therefore take advantage of this moment of Convergència’s relative weakness to engage with Mr Mas’s latest proposals on regional financing and education policies.

By conceding to some of Catalonia’s demands, he could simultaneously stave off early elections there and, in the process, open a more sophisticated debate about the appropriate balance of power between Spain’s regions and its central government.