Catalonia’s Post-‘Independence’ Economic Hangover Sets In

Uncertainty, threats, and counter-threats.
By Don Quijones, Spain, UK, & Mexico, editor at WOLF STREET.
Catalonia’s recent declaration of independence may have been a largely symbolic act but the economic hangover it has left in its wake is very real. Last month the number of unemployed in the region rose by 7,391 – the highest rise in a month of November since 2009. During the same period the number of people registered with social security fell by 4,038 – the sharpest fall since November 2013.
The economic pain is already taking a psychological toll. According to a new poll published by Spain’s Center for Sociological Research (CIS for its Spanish acronym), the number of households that fear that their economic situation will worsen in the next six months surged from 14.2% in August to 22.2% in October. By contrast, in Spain as a whole there was hardly any change, with the rate barely budging from 15.1% to 15.6%.
Almost 3,000 firms have shifted the registered address of their headquarters outside Catalonia since the banned referendum on October 1, many to Madrid. Although the exodus has slowed in recent weeks, every day dozens of Catalan companies continue to change their registered office, despite the express appeal of Spain’s Prime Minister, Mariano Rajoy, to stop doing so after the activation of Article 155 of the Constitution.
The Catalan exodus has so far been purely administrative, with companies effectively shifting domiciles, the ‘brass plate’ of the business, to avoid legal and tax complications rather than moving staff or operations, which would have huge cost and logistical implications.

This post was published at Wolf Street on Dec 6, 2017.

Catalonia’s Independence Strife Turns into Financial Showdown

Will Spain’s central government blink (again)? By Don Quijones, Spain & Mexico, editor at WOLF STREET. Madrid’s standoff with Spain’s north eastern province of Catalonia, which plans to hold a forbidden referendum on national independence on October 1, grows more and more complex by the day. Just in the last week alone the following developments have taken place:
Spain’s Civil Guard has raided Catalonia’s parliament and government HQ as part of its investigation into political corruption in the region. As new research has shown, this investigation forms part of a broader police operation that has served as a means for Spain’s governing People’s Party to spy on political rivals. Catalonia’s government has replaced the region’s chief of police with a die-hard separatist. It has also purged the cabinet of any members perceived as not fully committed to the separatist cause. Deloitte published its annual barometer of Spanish businesses according to which 74% of business leaders believe that the independence of Catalonia would do serious harm to Spain’s economy. Support in Catalonia for national independence is on the wain, according to a new poll, with 49% opposing independence, and just 41% favoring it. That said, only 67.5% of respondents said they still plan to vote on Oct. 1. Most of them will be nationalists. Madrid will do everything it can to stop them. The Rajoy government has warned this week that anyone who participates in the purchase of ballot boxes for the referendum could be criminally prosecuted.

This post was published at Wolf Street on Jul 23, 2017.

80,000 Catalans Gather Demanding Independence From Spain

After Brexit in the UK and Donald Trump’s election in the US, the political elites of the world are slowly waking up to the inevitability that the will of the people can not be ignored forever. In Northern Europe, the electorate has rebelled against political elites, like Angela Merkel, who have embraced “open borders” and the influx of refugees from war-torn areas in the mid-east that have brought with them increasing violence and terror attacks. In the U. S., the rebellion is the direct result of Americans being fed up with a federal government that is defined by cronyism and complete dysfunction.
Now, the latest demonstration of an electorate fighting back against its elected officials comes from Spain as 80,000 people rallied in Barcelona on Sunday in a show of support for Catalan leaders locked in a political battle with Madrid over an independence referendum. In Catalonia, separatists complain their relatively wealthy region is overtaxed by an oppressive central government in Madrid to subsidize poorer regions of the country.

This post was published at Zero Hedge on Nov 14, 2016.

On Toward Brexit – – -The Populist Revolt Against The Central State Is Spreading

Nationalism in on the rise in every region of the earth. In the face of an increasingly globalized world, the banners of tribe, tradition, and particularism are being unfolded in unabashed defiance. From Paris to Peoria the battle-cry is heard: Preserve our sovereignty!
Nationalism has had a bad reputation ever since the 1930s, when it was associated with colored- shirt-wearing thugs, militarism, and war: raging across Europe, it ignited a horrific conflagration. The pan-European idea was created largely in reaction to this bloody history, and yet the result has been a counter-backlash of nationalism, a new sort that has little if anything to do with its historical antecedents.
In the West, this current wave of nationalism, for the most part, is relatively pacific: instead of promoting aggression across borders it is intent on making those borders impenetrable. The old Bismarckian nationalism was statist and super-centralist as well as expansionist; the new nationalism is often (though not always) libertarian, decentralist, and uninterested in foreign adventurism (i.e. ‘isolationist’).
The best example of this is the new nation of Catalonia, which is seeking to part peaceably with Spain. With their own language, a long tradition going back to medieval times, and a relatively healthy economy compared to the rest of the Iberian peninsula, the Catalonians long to break free. The Spanish central authorities have reacted with all-too-predictable hostility, threatening to send in the tanks – and the European Union (EU) has taken Madrid’s side, declaring that an independent Catalonia will be isolated both economically and diplomatically.

This post was published at David Stockmans Contra Corner by Justin Raimondo ‘ February 24, 2016.

“Catalonia Needs Its Own Central Bank”: Spain’s Black Swan Lives As New Catalan President Sworn In

When last we checked in on Catalonia, Spain’s black swan was splashing around in a desperate attempt to avoid snap elections just three months after the region’s parliament approved a ‘democratic disconnection’ resolution and just four months after Catalans voted in what amounted to a referendum on secession from Spain.
The problem was that although Junts pel Si and the Popular Unity Candidacy (CUP) parties won a majority of the seats in parliament, and although both parties back a split from Spain, the two groups were unable to agree on who should lead the government. The choice was between then-President Artur Mas (Junts pel Si’s leader) or someone else.
Once CUP made it clear that they would not back Mas for President, the prospect of new elections reared its ugly head and the countdown was on to January 11 – the deadline for forming a government. “Lacking a majority in the 135-seat parliament, Mas had been reliant on the support of the pro-secession, far-left CUP group, which has 10 seats.” WaPo wrote in November. “But the CUP has refused to back Mas as regional president, because of his austerity policies of recent years and his party’s links to corruption scandals.”

This post was published at Zero Hedge on 01/10/2016 –.

Spain Leaps Toward Political Breakdown

Desperately needed international investors dread it
The dust is not even close to settling after Catalonia’s latest experimental flirtation with nation building. The pro-independence coalition fell tantalizingly short of gaining a majority of seats (62 out of 135). Now it needs the support of the anti-capitalist separatist party Popular Unity Candidacy (CUP) to secure a pro-independence majority in the regional parliament.
The problem is that CUP, which advocates a Catalonian exit (Cat-exit) from the EU, the Eurozone, and NATO, as well as unilateral default on the region’s debt, seems determined to play hard ball. After picking up 10 seats in the election – a seven-point increase on 2011′s total – its lead candidate Antonio Baos has refused to endorse the reappointment of the region’s pro-business president Artur Mas, who Baos described as ‘tainted’ by corruption and the long shadow of austerity.
Kingmaker or Kingslayer?
In his role as Catalonia’s new kingmaker-turned-kingslayer, Baos also dismissed the possibility of CUP supporting a unilateral declaration of independence from Spain. Before the elections CUP had pledged that it would only support a unilateral declaration of independence if the pro-independence parties received a majority of the vote. It won 47%.

This post was published at Wolf Street on September 30, 2015.

Spanish Banks Warn of Financial Meltdown if Catalonia Votes for Independence

But bluffs can backfire.
In Spain’s north eastern region of Catalonia, the fear-mongering and doom-saying is reaching a deafening crescendo. If voters return a majority of pro-independence politicians in next Sunday’s regional elections, all manner of economic disaster will befall the region – according to the defenders of Spain’s established political and economic order.
The doomsayers include the Spanish government, the main opposition party, PSOE, Angela Merkel, David Cameron, Barack Obama, John Kerry, the spokesperson of the president of the European Commission, Margaritis Schinas, and just about every business lobby representative in Spain. Some Catalan business leaders have evenurged their employees to vote against independence, warning that a yes-vote on Sunday could lead to them losing their jobs – a major threat in a nation with over 20% official unemployment!
Warning of a Crisis
The latest chorus of doom and gloom came from Spain’s two biggest banking associations AEB and CECA, whose members include Banco Santander, BBVA, Banco Popular, and Bankia. They warn that the exclusion of Catalonia from the Eurozone will trigger ‘serious problems of legal insecurity’ for banks based in the region. Those banks include Caixabank and Banc de Sabadell, Spain’s third and fifth largest banks respectively, both of whom are also members of AEB and CECA.
In their joint communiqu the two lobbying groups urge the people of Catalonia to honor Spain’s current constitutional order and safeguard the region’s membership of the Eurozone. Failure to do so, they warn, could jeopardize the ability of local financial entities to ‘protect depositors’ (ha!) and ‘maintain the flow of funds to families, SMEs, and to the country’s productive sectors and job creators’ (ha ha!):

This post was published at Wolf Street on September 20, 2015.