There are certain things politicians should never do – assuming, that is, they want to hold on to their jobs. Using the dirty “s” word (sovereignty) for example, is a definite no-no. Also high up on the list of “don’t dos” is threatening the interests of foreign creditors and bondholders.
Yet this is precisely what Oriol Junqueras, the firebrand leader of Esquerra Republicana Catalana (ERC), the second largest party in Catalonia’s government coalition, did last work. Not that many people living outside of Catalonia found about it, since it went virtually unreported in the international press.
The location was Brussels, the occasion a conference for the youth branch of the European Free Alliance movement in Brussels. As twenty and thirty-somethings from across Europe looked on, Junqueras delivered a barely veiled threat to Spain’s creditors about the dangers of failure to defuse the simmering conflict between Madrid and Catalonia (see video, in Spanish, here).
Perhaps those most interested in finding a solution are the creditors – not the politicians. Last year the Spanish state had a deficit of more than 10 percent of its GDP… Given that Catalonia represents a quarter of all Spain’s fiscal revenues and that we have the means to mobilise two million people onto the streets of Catalonia, does anyone seriously believe that we are not capable of halting the Catalan economy for one week? If we did this, can you imagine what kind of impact it would have on Spanish GDP? Or what foreign creditors would suddenly think of Spanish debt and what that would mean for the risk premium of Spanish bonds?
As such we also have our own instruments. European institutions need to decide what should prevail: democratic principles or the de-facto actions of the (Spanish) state? If it is the latter, clearly we will deploy all instruments available to us.
On his return to Barcelona, Junqueras faced a veritable shit storm of criticism from virtually all sides of the political spectrum, both in Catalonia and in Spain. Catalonia’s councillor for business and employment Felip Puig questioned whether a general strike in Catalonia would even be feasible. “The Catalan economy cannot stop for even two hours,” he said.
The criticism was even more stinging from Alicia Sánchez Camacho, the representative for Catalonia of Spain’s governing Popular Party, who described Junqueras’ actions as kamikaze and called for the Catalonian premier Artur Mas to denounce the actions of his largest partner in government – something Mas seems reluctant to do, and for good reason: Junqueras’ left-wing republican party is fast gaining support in the region. Indeed, recent polls have suggested that if there were elections tomorrow, ERC would emerge as the biggest party in parliament.
An increasing number of Catalonians are turning to more radical, separatist parties. They include the relative newcomer CUP, a strongly pro-independence and anti-EU party that in the last elections won 3.5 percent of the popular vote and three seats in the region’s parliament. One of those is occupied by David Fernández who has courted controversy at virtually every turn. Just last week, during a Q&A session on Bankia’s collapse, he threatened to throw a shoe at Rodrigo Rato, the bank’s former CEO of Bankia and one-time president of the IMF (For more background dirt on Rato, click here).
While Fernandez’s actions were roundly condemned by most quarters, all 21 sitting ERC MPs lent him their full support. It was yet another sign of the growing divisions in the fragile coalition led by Artur Mas. As Giles Tremlett warned in The Economist, by building up Catalonian nationalistic aspirations, Mas may have jumped “on a tiger he can’t fully control.”
In a thought-provoking article for El País Catalan writer Javier Cercas warned that Catalonia and Spain may well be facing a cataclysm (translation by yours truly):
The itinerary will be as follows: First, perhaps in 2014, the Catalonian parliament will make a unilateral declaration of independence. Then one of two things will occur, the most plausible of which is that the Spanish government suspends the region’s semi-autonomous status and declares a state of siege.
From that point on, anything is possible, including an escalation of violence… the most likely eventuality is that Spain will slip into a very severe crisis… It is a cataclysm into which we will be pushed by two main forces: the irresponsibility of a few luminaries who didn’t hesitate to jump on board a centaur born of economic crisis, idealism and the well-intentioned yet ill-informed aspirations of many decent people; and the incurable stubbornness of Spanish nationalism.
As long as the Rajoy administration continues to kill all hope of a negotiated settlement with its north-eastern province, one can expect political and economic relations between Madrid and Catalonia to continue to worsen. A symmetric trade boycott has already taken its toll on both economies and the Troika’s austerity medicine continues to wreak havoc — in particular in Catalonia, whose junk bond status prevents it from raising its own funds. It must therefore go cap in hand to Madrid for every penny it needs. When the money doesn’t arrive in the quantities needed, as is often the case, suspicions and resentment rise.
For the time being the EU continues to maintain a low profile on the issue. Every now and then it will issue Catalonia with a warning of the risks of trying to go it alone. The message is clear: any move to declare independence would result in the nascent nation’s expulsion from both the eurozone and the Union. However, as Junqueras warned, the status quo is no longer an option — at least not for a growing number of Catalans.
“We will use all democratic instruments available to us and we will not renounce any of them — because… without them we have no possibility of winning. And we are here to win!”
Rather than ignoring the problem, the EU would do well to listen to Junqueras, as well as pay heed to the lessons of history. This, after all, would not be the first time that Catalonia had tried to sever its ties with Spain. Twice in the early 1930s it unilaterally declared independence. What followed shortly thereafter was one of the bloodiest civil wars of modern European history, which also served as a prelude to the most costly global conflict in human history.By Don Quijones, of Rigged Game.
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