Financial Times

September 10, 2014 6:12 pm

Catalonia: Another country

By Tobias Buck

Spain faces a bitter political crisis amid mounting calls for independence from the region
People hold placards to form a giant "Estelada" flag (Catalan Separatist flag) in front of Sant Feliu townhall, near Barcelona February 16, 2014. REUTERS/Albert Gea (SPAIN - Tags: POLITICS) - RTX18XOG©Reuters

Identity parade: people hold placards to form a giant Catalan flag in the town of Sant Feliu, near Barcelona, in February

Lluís Ballús knows perfectly well that Berga, a small town in the foothills of the Catalan Pyrenees, is still part of Spain. It just doesn’t feel that way – not to him, and not to the vast majority of the 17,000 people who live there.

Madrid, says Mr Ballús, is as strange and distant to him as Paris or London. When he leaves Catalonia to visit other parts of the country, it seems like crossing a national frontier. “We tell each other: ‘I have to go to Spain tomorrow’,” he says.

In Berga itself, symbols of Spanish sovereignty are hard to find. Even the town hall does not fly a Spanish flag. Instead, councillors voted to display the Estelada, the banner of the Catalan independence movement, which now hangs from a third-floor window.

The same flag flutters from almost every building in town, except the local church and police station.

A surgeon in the local hospital, Mr Ballús is proud of his town’s reputation as a bastion of the Catalan independence movement. Over the past five years he has worked tirelessly for the cause, devoting at least three hours a day to the Catalan National Assembly, the influential grassroots organisation that has led the campaign for independence. “I have nothing against Spaniards,” he says. “But I want them as neighbours, not as landlords.”

Like many of his friends, Mr Ballús believes Catalonia is finally moving closer to a historic break with Spain. Inspired by Scotland’s landmark plebiscite next week, the Catalan government has called for its own independence referendum, albeit non-binding, on November 9. Madrid insists the planned vote is illegal, and says it will do all it can to stop it. But Catalan activists such as Mr Ballús vow to press ahead even if that means defying Spain’s government, parliament and constitutional court.

With political tensions rising by the day, the period between now and November 9 promises to be tumultuous. Most analysts believe the vote will ultimately have to be called off, though few dare to predict what other outlet Catalans will find for their discontent. One way or the other, Spain appears to be heading towards a searing political crisis just as the country’s long-suffering economy is starting to pick up. Some analysts worry that financial markets may come to view the simmering tensions as a cause for concern.

“Why is everyone still so calm about this? I think it is because markets are not good at assessing political risk. They usually dismiss it until they see it – and then they react suddenly and extremely,” says Luis Garicano, a professor of economy at the London School of Economics.

The Catalan challenge has long ceased to be a national matter. Alarmed by the prospect of political instability in Spain, European leaders such as Angela Merkel have waded into the debate in recent months, siding openly with Mariano Rajoy, the prime minister, and against Catalan independence.

Catalonia map

It is not hard to see why the prospect of Catalan secession, distant as it may appear, is so alarming to Spain. Catalonia accounts for 16 per cent of Spain’s population and almost a fifth of the economy. Losing the region would deprive the country of an economic powerhouse and a vital source of tax revenue: Catalonia is home to many of Spain’s largest corporations and best research institutions. Its capital, Barcelona, ranks as one of the world’s great cities, drawing in almost twice as many tourists as Madrid. No fewer than five of the 11 players that won Spain the World Cup in 2010 are Catalan.

Scotland’s contribution to the UK, in terms of people and economic output, is far smaller. But there is another crucial difference: even if Scotland says Yes to independence, there is little danger that Wales or Northern Ireland will follow down the secessionist road. In the case of Spain, there is no such guarantee. The Catalan referendum campaign has triggered calls for a similar plebiscite in the Basque country, traditionally the main focus of secessionist tensions in Spain. Furthermore, hardcore Catalan separatists have made clear their ambition to recreate eventually the greater Catalonia of medieval times, by drawing the Balearic Islands and the Valencia region away from Spain.

Fanciful as such scenarios seem for the moment, fears of a domino effect are taken seriously in both Madrid and Barcelona. “Britain goes on being Britain even without Scotland. Spain without Catalonia is a totally different case,” says Lluís Bassets, a Barcelona-based writer and columnist for the El País daily newspaper.

This helps explain the vehemence of Madrid’s refusal to even entertain the idea of a referendum. For a country that has spent centuries shedding vast chunks of its territory, losing Catalonia is simply unthinkable. The deepest, darkest fear of policy makers in Madrid is encapsulated in a blunt warning by Alberto Ruiz-Gallardón, Spain’s justice minister. Catalan independence, he has said, would simply “put an end to Spain”.

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Catalonia chart

In Madrid the surge in separatist sentiment is usually blamed on the recent economic crisis. Advisers to Mr Rajoy see the clamour for independence as a byproduct of economic frustration and predict it will weaken once Spain’s nascent recovery gains strength. Another culprit is found in Catalonia’s education system and parts of the regional media, which critics say have bred resentment of Spain, along with a nativist sense of victimhood.

“All this has created a mentality where the next logical step is independence”, says Francesc de Carreras, a professor of constitutional law at the University of Barcelona, and a prominent opponent of secession.

In Catalonia, activists counter that the region has always seen itself as a nation apart, with its own language, history and culture. They describe a long process of frustration with Spain, culminating in a landmark 2010 ruling by the country’s constitutional court to strike down a new statute setting out the relationship between Catalonia and Spain. The statute, which would have further bolstered Catalan autonomy, had been approved by the Spanish and Catalan parliaments, and was backed by a popular referendum in the region.

For many Catalans the statute offered the last chance to find a political accommodation within the Spanish realm. When it was struck down – by a court dominated by conservative appointees – they saw independence as the only path left.

“Part of Catalan society trusted the Spanish state, and thought we would be treated correctly. But that confidence has now disappeared. Catalans feel their good faith and their hopes were betrayed by Madrid,” says Oriol Junqueras, the leader of the pro-independence Esquerra Republicana Catalan party (ERC).

Amid this swirl of competing narratives, grievances, fears and aspirations, no one is feeling the political heat more than Artur Mas, the president of Catalonia. A relatively recent convert to the cause of independence, he says he is committed to holding a referendum in November. But he has also made clear that he will only go through with the vote if it is legal.

That is a potentially critical caveat, because the constitutional court is widely expected to rule in the coming months that an independence referendum, even if it is non-binding, cannot proceed. Mr Junqueras insists the vote must be held, and points out that his party’s political alliance with Mr Mas and the ruling Convergència i Unió party hinges on the promise of a referendum. “There is one fundamental demand in Catalonia, and that is to vote,” Mr Junqueras says.

Officials close to Mr Mas say he may not be able to satisfy that demand. To defy the ruling of Spain’s highest court would almost certainly provoke harsh countermeasures from Madrid, and possibly split his party. An illegal referendum would also likely be boycotted by large parts of the Catalan population, ensuring a low turnout.

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Most analysts believe Mr Mas will instead opt for early regional elections, with a view to turning the vote into a quasi-referendum on independence. The regional leader himself insists that, one way or the other, Catalans will have to vote on their future. “In a democracy, you cannot stop the democratic reaction of a country or society,” says Mr Mas.

A new, strongly pro-independence Catalan parliament could then be moved to issue a unilateral declaration of independence. But an early election could also mark the end of Mr Mas’s career in politics: polls predict that the ERC would emerge as the strongest party, with Mr Junqueras as Catalan leader.

Catalan towns such as Berga have already mentally seceded from the rest of the country, and no amount of legal pressure or economic incentives will entice them back

In Madrid, these dilemmas are viewed with quiet satisfaction. Officials there have long believed that the Catalan independence movement would ultimately radicalise and split. With the Spanish government refusing to budge one millimetre, moderate nationalists may eventually decide they have no appetite for unilateral moves, let alone acts of civil disobedience against the Spanish state.

A critical test of the movement’s endurance will come on Thursday, Catalonia’s national day, when the pro-independence movement will once again rally hundreds of thousands of supporters on Barcelona’s streets. Organisers say enthusiasm is as high as ever yet any sign that the turnout is markedly lower than in previous years will be seized upon by Madrid as evidence that its hard line is starting to pay dividends.

Even if a head-on clash can be averted in the months ahead, Catalonia will continue to cry out for a new political settlement. Analysts agree that the recent economic crisis has played a role in bolstering the case of the separatists – if only by highlighting the perceived unfairness of the Catalan tax transfers to the rest of the country. But in a conflict marked by identity and deep emotions, more growth and jobs are no panacea. Catalan towns such as Berga have already mentally seceded from the rest of the country, and no amount of legal pressure or economic incentives will entice them back.

Prof Garicano warns that the biggest danger for Spain and Catalonia lies in the fact that both sides are living in different realities. “In Catalonia, people believe they will vote and that independence is possible,” he says. “In Madrid, there is a consensus that this is absurd.” That divergence provides fertile ground for escalation and miscalculation: “Conflict takes place when two parties have a different view of reality – and when both sides think they can win.”

For the moment, despite the solemn promises and high expectations, it is difficult to chart a clear course that would lead towards a Catalan referendum, let alone to the formation of a breakaway state. Yet hoping that separatist pressures will simply subside, as many in Spain’s government seem to do, appears just as fanciful.

“We will try and try and try, just as we have always tried,” says Mr Junqueras. “We will not get tired.”

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Tax scandal casts shadow

The announcement was short but the shadow it cast on the Catalan independence campaign is long and getting longer.

On July 27, Jordi Pujol issued a statement revealing that he had kept undeclared money outside the country for the past 34 years. The confession sparked a political uproar and turned one of the heroes of the Catalan national movement into a villain, roundly condemned even by former allies.

Mr Pujol served as Catalan president for 23 years, and, despite his small stature, towered over the region’s political scene in the tumultuous decades since Spain’s return to democracy in the late 1970s. To see him admit to tax fraud was “like discovering that Gandhi was a meat-eater”, remarks Lluís Bassets, a journalist in Barcelona.

Jordi Pujol©AP

Jordi Pujol's admission sparked political uproar

On one level, analysts say, the scandal is unlikely to affect the Catalan push for independence. Many of the most committed supporters of independence were never part of Mr Pujol’s Convergéncia i Unió (CiU) movement – and indeed saw the former president as suspiciously close to Madrid. To them, his fall from grace is of little relevance.

But the scandal is likely to hurt the independence cause all the same. It has already weakened Artur Mas, the Catalan president and Mr Pujol’s heir as leader of the CiU, at a crucial moment in the campaign. It has given Madrid a stick with which to beat the Catalan leadership, and has provided a serious distraction at a time when the pro-independence camp is keen to project unity and optimism. With Mr Pujol due to explain himself in the Catalan parliament on September 22, the affair is unlikely to blow over soon.

Finally, it may weaken – at least in the minds of some Catalans – one core argument in favour of independence; namely that a new Catalan state offers the chance to make a decisive break with Spain’s corruption-prone and deeply discredited political elite.

Francesc Homs, one of Mr Mas’s most senior advisers, admits the Pujol affair has damaged Catalonia’s ruling party but insists that the campaign for independence will go on regardless: “This doesn’t affect the process just as [a Spanish corruption scandal] doesn’t affect the continuity of Spain. Catalonia transcends the Pujol family, and it transcends every individual.”