Spanish PM Mariano Rajoy and Artur Mas, president of the Catalonia region. The red stripes on a yellow background evoke the Catalan flag.

Catalonia, a new headache for the EU

Catalonia, Spain's wealthiest and yet most indebted region is claiming the right not to pay for a central government brought low by debt, all the while brandishing the spectre of independence under Madrid’s nose. For Brussels this microcosm version of trouble the eurozone faces is the cause of much scepticism, as well as concern.

Published on 24 September 2012 at 14:53
Spanish PM Mariano Rajoy and Artur Mas, president of the Catalonia region. The red stripes on a yellow background evoke the Catalan flag.

The crises work as plotting devices: the German take on the European crisis is a morality tale, grounded in the belief that the economic fainting fit is due to the fiscal irresponsibility of sinners in the south of Europe, who must do penance. Using that erroneous script as a guide, the solutions are getting harder and harder, the mechanisms of solidarity scarcer, and the citizenry of some northern countries more suspicious.

In the south, meanwhile, an anti-German (or anti-European) mood is growing and extremists have been posting gains in many of the most recent elections. In the euro crisis, Spain is a kind of microcosm: the misunderstanding dramatised by Catalonia has odd parallels with that story of the euro.

As Brussels sees it, the direct causes of the economic problems of Catalonia lie in the deep recession following a vastly inflated housing bubble and the works of various governments over the years, and not in the more than dubious fiscal exploitation (although the funding system is imperfect and the scale of Catalonia’s taxation deficit debatable) that Catalan separatism is brandishing to justify its claims. For this reason, the EU saw this controversy coming with some perplexity, which has now metamorphosised into worries that it’s coming at the worst time of the Spanish crisis.

“More Catalonia and more Europe”

Catalonia, obviously, is not Germany. To start with, it is suffering the ravages of the recession and unemployment firsthand. In many other ways, though, the analogy is accurate. Once again, in the midst of the crisis, it is the rich North that wants to cut back on its transfers of solidarity.

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Brussels is noting that debate with some unease: “Catalonia is an additional source of concern. Spain had already abundant problems, and now it turns out that one of the wealthiest communities must apply for a bailout from the State. Almost on the same day it threatens independence and proposes a mis-named fiscal pact, which ultimately proposes paying in fewer resources to the coffers of the Spanish state at a time when that the health of the public accounts is raising some doubts,” said one diplomat.

The President of the Generalitat [the Catalan regional government] has paid at least a couple of visits to Brussels seeking some understanding for its demand for a financing system. Mas met with the president of the Commission, José Manuel Barroso, and with the president of the Parliament, Martin Schultz. He met with practically the entire who’s who of the European Union. Beyond the usual calculated ambiguity, however, the general consensus is that not a single reference was made to Catalonia’s secessionist aspirations.

“We will not renounce who we are... More Catalonia and more Europe is our motto,” Mas announced to the press on one of those visits. Would that, he was asked, mean ‘less Spain’? “No,” he clarified. “We are positive. We affirm. We not deny anything.” In Brussels the first reaction was disbelief, followed by a clear warning: “Some of the claims of Catalonia are seen with a certain sympathy.

Obvious legal problems

However, a dangerous frontier is being crossed. The aspiration to improve funding is understandable, but not even in Germany, with a federal tax system that can serve as a model, is it viewed as a step made ever so lightly across the line towards aspirations to independence – which,” said a European official, “is what is setting off alarms in Brussels over the risk of copycat moves elsewhere.”

The independence of Catalonia would entail obvious legal problems, to judge from the elegant wording of Article 4.2 of the Treaty on the European Union. Moreover, decision-making in the EU is heading towards qualified majorities except on one point that will always require unanimity: the entry of new states.

These barriers can act as check dams, and the President of the Commission, José Manuel Barroso, has made clear the doctrine on the subject. On one hand, this is an “internal” affair of Spain. On the other, in the event of a hypothetical secessionist process in a Member State, “the solution must be arrived at within the international legal system.”

The idea that the PP (Mariano Rajoy) government has dropped its line that the deficit problem is the fault of Spain’s autonomous regions is not true. And, using obligations imposed by Brussels as an excuse, it has threatened to begin to recentralise some powers, which is generating distrust in Catalonia and partly explains this reaction. Here again, the parallel with Europe is disturbing: the troika packs men in black off to Madrid, and in turn the Madrid government packs its own men in black off to the bailed-out regions like Catalonia.


Is federalism the solution?

"The parliament is preparing a statement on sovereignty," headlines Barcelona daily La Vanguardia. Three nationalist parties, including the CiU (Convergència i Unió), the ruling party in the Catalan regional government, will soon issue a statement summing up the "spirit of the demonstration for Catalan independence held in Barcelona on September 11". Although early regional elections are expected this autumn and these could turn into a plebiscite on independence, the statement could include a request for a referendum on the issue.

This latest stage in the crisis between the central government in Madrid and the Catalan authorities raises the issue of the model used for attributing power to the regions and to the central government within the kingdom. Because the crisis is so deep, this is a real challenge, sums up Juan Luis Cebrián, who chairs the board of Madrid daily El País. He writes that

... a State Treaty is necessary if we want to face the three crises which plague us: economic and institutional in Spain, and the construction of Europe. [...] Catalonia's uniqueness can only be built through a federal State [because] separation from Spain would lead Catalonia into sustainable decline.

Following this article and the expression by many others, including former prime minister Felipe Gonzàles, in favour of a federal model, Enric Juliana, is surprised by these "sudden demonstrations of federalism". La Vanguardia's deputy director and Madrid correspondent notes that —

... a spectre is racing through Spain [...] It is the attempt to formulate a rapid and intelligent response to the unclear revolt of Catalonia. The magic charm is called federalism [...] Once derided, asymmetrical federalism now is starting to have unexpected followers. [...] Fundamental positions have not shifted, but there is an adjustment in tone.

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