Spain has enough problems: a debt crisis, a hangover from a housing bubble, unemployment of over 25%, youth unemployment of over 50%, massive demonstrations against “structural reforms” that the government is trying to implement in its desperate effort to keep its chin above water…. And now it has a new one: the possible breakup of the country. The military has already chosen sides.
It started last week in Barcelona, capital of the Autonomous Region of Catalonia, the richest region in Spain. Of the 7.5 million Catalans, between 600,000 and 1.5 million—an astounding 8% to 20% of the population!—protested in the streets, demanding independence.
Antagonism between Catalonia and Spain has simmered for a long time. But the financial fiasco that Spain is mired in deepened the fissures. Out-of-money Catalonia had to ask the central government for a bailout. Catalans are frustrated. They claim that under the current fiscal setup, Catalonia transfers €16 billion annually to the central government, and that these transfers bankrupted the region. Now, in exchange for the bailout, the central government has imposed austerity measures that cut into health care, education, and other services.
On Thursday, Catalan President Artur Mas met with Prime Minister Mariano Rajoy, originally to beg him for a new tax deal. But the massive demonstration in Barcelona had added independence to the agenda. Rajoy brushed him off, with references to the constitution that didn’t allow regions to secede.
“Constitutions may or may not be modified, but they do not subjugate the will of the people,” Mas lamented after the meeting. As leader of the Democratic Convergence of Catalonia and chairman of the governing Convergència i Unió (CiU) coalition, he represents the middle class and has supported Catalan independence only in an ambiguous manner. Until now. “Catalonia will follow its path,” he said. Parliament would meet next week to “consider the next steps.”
“Illegal and lethal,” howled Foreign Minister José García-Margallo and threatened Catalonia with exclusion from the EU if it chose independence. Decisions in Brussels as to which country will be allowed to accede to the EU have to be unanimous, and Spain’s veto would bar Catalonia “indefinitely,” he said.
Nevertheless, Friday morning, CiU spokesman Francesc Homs pushed that agenda further: after the elections—early elections could be held on November 25—Parliament may initiate the path to independence. This could be by referendum, but there would be alternatives, he said, “for example” a parliamentary vote to declare statehood.
The CiU hasn’t yet decided how to articulate its demand for statehood in its electoral program, but the strategy toward independence is an “irreversible process,” Homs said. He described Spain as a “lion” attacking the Catalan “gazelle” whose sole weapon is “agility.” And the threat of getting kicked out of the EU? “Catalans are European citizens,” he said, and he didn’t know how it would be possible to kick them out. But he wasn’t worried about the all-important business community. “We won’t lose investments if things are expressed democratically,” he said.
The response was immediate. Catalan independence would be a “tremendously huge problem“ for businesses, said Joan Rosell, president of the Spanish Confederation of Employers’ Organizations (CEOE), which represents state-owned and private sector enterprises. Employers, he said, supported a single market as a way out of the current turmoil.
Declaring statehood would have no legal value, Deputy Prime Minister Soraya Saenz de Santamaria declared at a press conference after the Council of Ministers. And the government didn’t welcome early elections, she said; “political instability” would aggravate the crisis. But she threw Mas a bone: the government would be willing to consider reforming the financing model of the Autonomous Regions.
A discussion of the nitty-gritty of independence has broken out. Hot topic: the distribution of central government debt. Would Catalonia have to carry 20% or 16%? Or none because Spain issued the bonds and not Catalonia? Would Catalonia be better off within Spain or as independent state? Would it even be financially viable? Rumors are swirling that members of the governing coalition have asked the European Commission if Spain can legally stop Catalans from seceding, and if it can expel an independent Catalonia from the EU via its veto power. As there is no law that would allow secession, there is also no law regulating it. So everything is up in the air. But the fact that this is getting serious attention, shows just how far the process has already gone.
And the military staked out its role. Colonel Francisco Alaman promised to crush the “vultures” if they chose independence. “Independence for Catalonia? Over my dead body,” he said. “Even if the lion is sleeping, don’t provoke the lion, because he will show the ferocity proven over centuries.” Words of the crazed fringe? Apparently not. “Deeply-rooted thinking in large parts of the armed forces,” explained retired Lt-Gen Pedro Pitarch. And it opened a whole new chapter in the Eurozone saga that, despite all assurances to the contrary, simply keeps getting more uncertain.
When the German Constitutional Court nodded with a stern smile on the ESM bailout fund and the Fiscal Union treaty, politicians breathed a sigh of relief. The German revolt was over. But steam is billowing once again from the misaligned pipes of the Eurozone, this time in France, where the Fiscal Union treaty had been silenced to death. Read…. A French Rebellion Against Unelected Bureaucrats: “European Coup D’Etat And Rape Of Democracy”