The Price of Chaos Rises in Spain

The longer the toxic process between Catalonia and Spain drags on, the wider the gulf grows.

By Don Quijones, Spain, UK, & Mexico, editor at WOLF STREET.

During a visit yesterday to Barcelona, the organizers of the Mobile World Congress, the world’s biggest mobile event, warned the City Council that unless the political situation stabilizes in Catalonia, they will be looking for an alternative venue after 2018. Barcelona has hosted the annual event every year since 2006 and it brings a lot of money to the city each year, much of which ends up in the pockets of local taxi drivers, hoteliers, owners of bars, restaurants and brothels, Airbnb hosts and, last but not least, the thousands of professional pickpockets that flock to the city for the four day event.

John Hoffman, the chief executive of GSMA, the association that organizes the Mobile World Congress (MWC), could not have chosen a worst day to visit Barcelona. As part of a general strike to protest the incarceration of pro-independence ministers and leaders and the imposition of direct rule from Madrid, thousands of picketers had blocked dozens of roads across the region including the main freeway connecting Spain with France, causing massive traffic jams.

High-speed train links between Barcelona and France and Barcelona and Madrid were also put out of action after hundreds of protesters moved onto platforms and railway lines in Barcelona and Girona chanting ‘Freedom, Freedom.”

At midday thousands of protesters occupied Barcelona’s Sant Jaume square in front of the city’s town hall, a traditional assembly point for Catalonia’s separatist movement. The chant “Squatters, get out” rang out in allusion to the take-over by central government authorities of Catalonia’s regional government.

Madrid is unlikely to be budged, at least not until regional elections are held on December 21, which it hopes will deliver an anti-independence majority. It’s a tall order, especially given the lack of public support for the Rajoy government in Catalonia. In a recent poll by Pew Research, 91% of the Catalans surveyed said they do not trust the government in Madrid.

If the gamble doesn’t pay off and in December pro-independence parties are handed another majority, direct rule will be reinstated, Spanish government representatives have warned. In other words, the beatings will continue until morale improves. And if morale doesn’t improve, well, the beatings will continue.

Article 155 Is Not Just Alive

Activating article 155 of Spain’s constitution, which allows Spain’s central government to take direct control of a wayward region or locality, was always a high-risk move. As the rating agency Moody’s warned, triggering the law may help ensure that Catalonia remains part of Spain for the short term, but over the long haul it will make it even more difficult to resolve the constitutional conflict.

Now, two weeks on, 155 is not just alive, it’s thriving, as the central government in Madrid seeks to apply the article to other regions over which it has limited political control. “We have developed this article of law and we now know how to apply it to Catalonia or any other region that violates the constitution,” said the governing Popular Party’s spokesperson Rafael Hernando.

That was on Monday. By Tuesday the Finance Ministry had applied a 155-type procedure to take control of the finances of the Madrid city council, which is run by a leftist coalition closely aligned to the Podemos party. The central government accuses Madrid’s council of consistently breaking budgetary rules, yet during the last financial year the council achieved a budgetary surplus of €1.02 billion after slashing its debt by 32%.

A senior representative of Rajoy’s Popular Party (PP) has also threatened to apply article 155 to the Basque Country. Alfonso Alonso, a former health minister and president of the PP in the Basque Country, warned that the region has “all the ingredients” to become the next Catalonia. The responsibility of the PP is to ensure that those ingredients never come together, Alonso said.

The fact that senior members of a deeply divisive government are threatening to apply an extremely draconian piece of legislation to other parts of Spain, including a region that is home to ETA, one of Europe’s most violent separatist groups which declared a permanent ceasefire in 2011, is testament to just how volatile the situation currently is in Spain and how easily the political chaos could spread.

State of Uncertainty

The financial toll is already being felt, albeit in a slow-bleed kind of way. Since October 31, two days after the activation of article-155, Spain’s benchmark index, the IBEX-35, has not been once in the green. The country’s second biggest bank, BBVA, has cut its GDP growth forecast for 2018 by three-tenths and has warned that if the current uncertainty continues until December as much as 1.1 percentage points could be shaved off GDP.

If the instability persists long after December, growth will slow sharply as the cost of debt for Spain’s government rises, especially with the ECB paring back its purchases of European sovereign debt. If rating agencies follow through on their threats and begin downgrading the outlook for the Spanish economy or even cutting their rating for Spanish debt, servicing that debt is going to get a whole lot more difficult.

But the biggest threat is the gathering boycott of Catalan goods in the rest of Spain. According to a new survey conducted by The Reputation Institute, 23% of Spanish people have stopped buying Catalan goods altogether. Another 21% are thinking of doing the same. In other words, Catalonia’s biggest export market is shrinking fast. As former Spanish minister Josep Borell recently warned, the boycott has reached such a scale that it risks severing economic ties between Spanish and Catalan businesses — ties that have taken decades to forge.

Many of these consumers think they’re doing Spain a favor by punishing Catalan businesses, yet many of those same businesses are owned by people who are not in favor of independence. What’s more, many of their providers are based in other parts of Spain and they, too, are suffering the ill effects.

For the moment there is not the slightest sign of any reconciliation between pro-independence Catalonia and the rest of Spain. Neither side seems willing to take a step back. The longer this toxic process drags on, the wider the gulf will grow and the more difficult it will be to rebuild bridges afterwards. And both sides of the divide have shown themselves to be perfectly capable and willing to inflict economic pain on themselves in order to harm the other. That should be — but apparently isn’t — a serious cause for concern in Brussels. By Don Quijones.

Acute uncertainty is like sand in the gears of the local economy. Read…  Spain Just Lit a Fuse Under Catalonia — its Richest Region




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  60 comments for “The Price of Chaos Rises in Spain

  1. TJ Martin
    Nov 9, 2017 at 1:41 pm

    …. and the more autonomous and semi autonomous regions along with radical groups such as the ETA that will join in on the fight as their rights , independence and well being become threatened by Rajoy’s pretense of becoming Spain’s next Franco

    Question is .. at what point doe the EU step in .. before this all blows up in everyone’s face not to mention spreading like the plague across the whole of Europe ?

  2. raxadian
    Nov 9, 2017 at 2:08 pm

    So Spain is becoming a police state once more?

    That’s what happens when you don’t take the members of the former dictatorship to court like Argentina did.

    Since justice didn’t happen, since the missing continue missed, since there is still a lot on unmarked graves they think they can just do it again.

  3. Maximus Minimus
    Nov 9, 2017 at 2:52 pm

    How can you tell Catalan goods from a Spanish goods? Just curious.

  4. mean chicken
    Nov 9, 2017 at 2:58 pm

    Perhaps Catalonia wisely retained a healthy stash of Pesetas, or converted them for gold/silver as opposed to Euros.

  5. Auld Kodjer
    Nov 9, 2017 at 3:01 pm

    If only the good people of Spain would realize that it is not Catalunya that is their enemy, but the phoenix of fascism in Madrid.

    Evil has a name, and his name is Rajoy.

  6. Bobby Dale
    Nov 9, 2017 at 3:52 pm

    “Barcelona has hosted the annual event every year since 2006 and it brings in billions of euros to the city each year,”

    There seems to be a typo in this sentence…

    • Jim Graham
      Nov 9, 2017 at 11:46 pm

      200,000 visitors @ 5000.00 Euros will get you a million.. I have NEVER done a trade show that didn’t cost us 20 grand. Many were more.

      • Bobby Dale
        Nov 10, 2017 at 10:35 am

        MWC estimates 108,000 attendees.
        To reach a billion euros they would each have to spend €10,000 IN Barcelona, not including transportation to and from the destination. Most trade show materials will be produced elsewhere, the show registration fees go to an outside vendor. This €10,000/ would be in lodging, meals, local transportation, services and incidentals. The economic multipliers used in calculating tradeshows and sporting events are notoriously inflated.
        I would bet the direct local spending is under €400,000,000.00 or approximately €3700/ attendee. Strictly back of the envelope math.

        Look at the bright side, all of those worried about tourism ruining Barcelona can relax.

  7. John M
    Nov 9, 2017 at 4:10 pm

    “Spanish government representatives have warned…. ” the beatings will continue until morale improves. And if morale doesn’t improve, well, the beatings will continue.”

    The above sums up the issue.”

  8. Crysangle
    Nov 9, 2017 at 5:51 pm

    I noticed the Spanish government mentioned putting the topic of allowing regional referendums to a national referendum. I suppose that would be one way to seize the initiative and provide/create a long delay. I wonder if Cataluña will go into freezeplay until the next national elections, or if early elections will be nudged in…I don’t see how it can all hang for years.

    • walter map
      Nov 9, 2017 at 8:16 pm

      “I don’t see how it can all hang for years.”

      It’s been hanging for years. It’s actually been hanging for centuries. This is just the latest phase, but it’s been a fact of Spanish life for generations.

      Most countries have ethnic divisions, but only a few have serious separatist movements, and Spain happens to be one of them, and it’s important because it could become unusually expensive for both sides. It’s very bad for business. Still, even Belgium is split between Flemands and Walloons, but mostly they just argue. France is a real hodgepodge, essentially a collection of pays, and it was in no way unified before WWI. Nationless gypsies are still common in Europe. Kurdistan was rather stupidly added to Iraq as a convenience to the European victors over the Ottomans. India is at least as diverse as Europe and has its own collections of divisive ethnicities. There are many examples.

      As we know, demagogues are notorious for exploiting ethnic divisions for political advantage, so it is common for minorities to be abused, ethnically cleansed, and sometimes exterminated, which is why there are no longer any native Tasmanians. Spain itself was more peaceful under autocratic caliphs who enforced tolerance, but that was a long time ago, and before Catalans were considered Spaniards.

      • DanR
        Nov 9, 2017 at 9:46 pm

        Do Spaniards consider their conquest of the New World and whether that has implications for what is going on now in Spain?

        • Crysangle
          Nov 9, 2017 at 11:11 pm

          DanR, my two cents without meaning to jump in, sure Walter has something to add.

          Recent Catalan independence moves (early last century) was tied into Cuban independence ( if you read on the origins of the estellada flag for example), in fact there was American involvement ( the US and Spain did not have best of relationship) , and so I think there is residual sentiment there somewhere.

          On top of that the far left Podemos party is tied into the S. American left in various ways, and they are therefore quite reactionary ( and want PP out of power no matter what), so there is also Spanish American legacy playing out there too.

        • Crysangle
          Nov 10, 2017 at 9:23 am

          https://en.wikipedia.org/wiki/Estelada

          Nationalist Spain considers itself a notch above the now independent hispanic world ( as in don’t expect our help now) , “average people” tend to look on it as any other country but with familiar ties and shared history hence with more sensitivity , for revolutionaries it is an example, and low life it is an opportunity.

          So PSOE for example legalised a whole swathe of S. American migrants on grounds of descent a decade ago ( many went home after the gfc) , PP/big business in contrast has a lot of high level investment in S. America, but otherwise is not too keen on bringing the continent to Spain. I think most people just see the continent as an advantage, but also consider it less developed and more difficult, and do not want too much influence of that in Spain.

      • Crysangle
        Nov 9, 2017 at 10:59 pm

        I see what you are saying, but I find it hard to picture, after say renewed indepence victory 21D, another four years (or three to general election) under 155, with various members of Catalan society in jail and the regional, if not national, economy in the doldrums or declining. I just do not see it continuing like that.

        On the other hand the PSOE does not look like it is going to react in any major way ( say to stall government) , nor EU, so maybe it is set that way…or else the independence movement loses its majority and everyone just gets to complain till the next time.

        • walter map
          Nov 10, 2017 at 12:12 am

          “the independence movement loses its majority and everyone just gets to complain till the next time.”

          Call it a tradition.

        • Cynic
          Nov 10, 2017 at 5:51 am

          For many separatists, it’s always a case of ‘Next year in Jerusalem!’

          They can live a whole life with that delusion, dreaming, fulminating against ‘traitors’, plotting…..

        • DanR
          Nov 11, 2017 at 10:30 am

          Thank you for the info and will consider. I know somebody from LA who visited Spain about 10 years ago and was astonished by the (apparent) lack of museums, art or outward acknowledgement of Latin America which speaks Spanish. Seemed a bit mysterious to me. And now as I refresh my limited knowledge on Catalonia, it is even more mysterious that their language does not look or sound quite like Castilian Spanish. I’m not even sure the Catalans were focused on Latin America, but instead on the Mediterranean.

    • d
      Nov 10, 2017 at 3:33 am

      Did you read the fine print on that????

      The Proposed Referendum Amendment, is for the WHOLE country to vote in any Referendum.

      NOT JUST THE EFFECTED REGION

      This is “You can check out any time you like, but you can never leave” Unless the rest of us, dont want you.

      80% or more vote out in the reigon whilst 60 % or lees vot in, in the rest of the country. Region stays in, as national majority vote, is, in.

      The Scots Referendum model, is the model needed.

      Where only the citicens of the effected region. Vote in the in/out referendum. Otherwise it is a poinless, forgone conclusion, exercise..

      • Cynic
        Nov 10, 2017 at 11:40 am

        To paraphrase the Prince in Leopardi: the only changes proposed are those which will ensure everything stays the same.

        Juncker is against any change at all, as he made clear in Salamanca the other day : ‘No populism, no (poisoned) nationalism or separatism.’

        Essentially a Soviet attitude, or one worth of the old Austrian Empire…..

        • d
          Nov 11, 2017 at 3:31 am

      • Crysangle
        Nov 10, 2017 at 12:13 pm

        …and meant to be, except it re-affirms the democratic credentials, and constitutional order, of Spain.

        • d
          Nov 11, 2017 at 3:30 am

          As the Cynic said

          “To paraphrase the Prince in Leopardi: the only changes proposed are those which will ensure everything stays the same.

          Juncker is against any change at all, as he made clear in Salamanca the other day : ‘No populism, no (poisoned) nationalism or separatism.’

          Essentially a Soviet attitude, or one worth of the old Austrian Empire…..”

          The last thing that Amendment would ever do, is be considered in any democracy outside Spain, to be re-affirming, the democratic credentials of, Spain.

  9. William Smith
    Nov 9, 2017 at 6:25 pm

    It just seems to be part of a bigger “localization” movement sweeping the world at this time. Including Far Right movements, Brexit (the implicit breakup of the E.U.) & the Trump movement. In Australia we have Western Australia talking about seceading from the rest of Australia. There is also talk of the huge Australian state of Queensland dividing between north and south. History has shown that globalization is a complete fiction (as well as “trickle down” fraudenonomics) and there can never be any unity when populations get past a certain size. There will always be localized fracturing. The human (evolution) psyche cannot cope with non-local organization and territory based greed and war will always prevail. Evolution dictates that our brains only understand (and can cope with) things on a village scale. The massive rapid change precipitating loss of jobs & tradition is also a very powerful and underrated (direct and indirect) driver in all of this. After WWII the pendulum was swinging towards the U.N. and global unification but now it is swinging back because the U.N. did not deliver for the common man, only for the oligarch. Communism (in CCCP) was a bold attempt at imposed unification and it degenerated and fractured into a kleptocracy. Why does anyone think that capitalism is any better a system: for who can say that it also has not degenerated into a kleptocracy of the oligarch? Let the fracturing begin I say.

    • Gershon
      Nov 9, 2017 at 7:49 pm

      It just seems to be part of a bigger “localization” movement sweeping the world at this time. Including Far Right movements, Brexit (the implicit breakup of the E.U.) & the Trump movement.

      If you object to seeing your formerly sovereign country turned into a Goldman Sachs looting colony, and resist bureaucrats accountable only to their oligarch-bankster puppetmasters erasing your borders and national traditions and imposing forced multiculturalism on distinct peoples, you are, ipso facto, “far right” to the corporate statist Establishment and its media border collies.

      • Argus
        Nov 11, 2017 at 8:24 pm

        Well said, Gershon. That’s it in a nutshell.

    • Cynic
      Nov 10, 2017 at 5:48 am

      There can be no Brotherhood of Mankind, as ‘mankind’ is nothing more than a meaningless abstraction.

      And this also the problem that separatists and nationalists will run into: there is no ‘people’ united in shared motivation – as we can see in Catalonia and the Basque country, or indeed in Brexit (or is it?)Britain.

      • d
        Nov 10, 2017 at 6:27 am

        Brexit at the Bottom is .

        “Europe is not destroying our economy and country for a third time in less than 105 years.”

        In the process another of of their internal cat-fights.

        When they cant even protect their borders from illegal immigrant’s, they expect England, to pay to look after, and house, in England.

        Ever closer union is not the answer to a lot of the issues, the EU need’s to deal with urgently.

        Every time their are issues in the EU Ever closer union (more power to brussels) is trotted out as the answer. When frequently it isnt.

        Eu Borders need to be secured, freedom of moment needs modification, to stop national welfare exploration, and nation’s exporting their unemployed or low wage workers, to places with higher wages and lower unemployment levels. So raising unemployment in those “host places”.

        Which is the same issue with globalization .

        Globalization was suppose to raise the lowest boats.

        What it has done, is dragged down the highest boats, whilst levering china to the top of the heap. In the process, forcing the lowest boats, LOWER.

      • Maximus Minimus
        Nov 10, 2017 at 11:28 am

        “There can be no Brotherhood of Mankind, as ‘mankind’ is nothing more than a meaningless abstraction.”
        Cynically true.

    • Dan Romig
      Nov 10, 2017 at 7:10 am

      Aristotle stated something long ago that has stood the test of time:
      “At his best, man is the noblest of all animals; separated from law and justice, he is the worst.”

      • d
        Nov 11, 2017 at 3:20 am

        In the time of Aristotle.

        “Justice” included, Economic, Moral, and Social, as well as legal.

        The current system in Extremely unjust, Economical, and Social, as well as Morally.

    • John Taylor
      Nov 10, 2017 at 4:40 pm

      Short version: Globalization has simply become the latest powerful means for the wealthy owners and investors to reduce the cost of labor and keep more profits for themselves.
      These owners all have short-term and disconnected views – lower cost of labor in each particular business doesn’t reduce the overall middle class wealth by much. Overall the effects are certainly felt.

  10. Tyronius
    Nov 10, 2017 at 5:13 am

    Everything I’ve read about the Catalan crisis either says or implies that the Rajoy government has somehow clumsily ‘blundered’ into this confrontation and it’s escalation.

    I think this ignores the strong possibility that the Spanish government desired and actively fomented the situation. If so, who stands to gain? As ever, following the money often leads to interesting doorsteps…

    • Crysangle
      Nov 10, 2017 at 9:01 am

      When PP came to power after PSOE, part of their raison d’etre was cracking down on regional spending, and regionalism. True to form they stuck to their guns, something that reaps them credibility from a large segment of the population…and provides a needed distraction from other not so transparent dealings that some of their members were involved in.

    • Michael
      Nov 10, 2017 at 10:00 am

      Let’s also apply this logic of “who’s to gain?” to those seeking independence. Obviously Russia likes a fractured Europe, even if Catalonia split from Spain is not the same prize that a German or French EU exit would be. There is some evidence that Russia was stoking fears in social media presence. Some Catalan businesses might benefit through a local concentration of power – just as exports close for some, others gain from stronger position inside Catalonia and more control over favorable local regulations. Some individuals might benefit from avoiding corruption or other central government driven criminal investigations. Some Financial companies may love a Catalonia that is outside the EU ongoing threats to crackdown on offshoring and fiscal paradises. The poorer regions are more virulently independent – they decision-making closer to them (maybe at the expense of a more cosmopolitan, richer, less pro-independence, Barcelona)

      Among the independence power brokers, I don’t believe that the “yearning for freedom” is the single driving force for what’s going on behind the scenes. Rajoy has been ham fisted, but the initiative was equally ham fisted in terms of taking a step towards forcing brinkmanship. In what world is 43% of the vote (albeit 90% voting “for”) OK for voting on something so impacting on so many people’s lives?

      • Cynic
        Nov 10, 2017 at 11:44 am

        Exactly: a new state would only be viable with support in the region of 90-95%.

        Anything less, and it’s a recipe for turmoil and civil war, with the former parent state having openings for interference and de-stabilisation using those unhappy with the decision.

        Separatists never seem to accept this reality.

      • Concerned
        Nov 10, 2017 at 8:11 pm

        The biggest problem with that 43% number is, that was the number of ballot papers counted, not the voter turn out. With ~770,000 confiscated ballot papers, the turnout is best described as “an unknown number between 43% and 57%”.
        When that many voters turn out under threat of physical harm, and are prepared to engage in what is essentially an act of civil disobedience, there is a major problem with democracy in that country. It is also incorrect to assume that everybody who did not participate was against Independence – maybe they were just too scared to go vote?
        Ultimately, the best solution would be to have a free and fair referendum, organized by an impartial third party, where both sides agree to accept the outcome, and voters are free to vote yes or no without fear or repression.

        • michael
          Nov 13, 2017 at 7:32 am

          Agreed that having threats against voting, putting aside the debate around the legitimacy of the vote itself, is not a good sign for democracy. Neither is the incomplete and obfuscated scenarios painted by independent leaders. Democracy requires complete access to information for voters to make informed choices. Propaganda and emotional levers are behind much of the outrage generated by the independistas. Did they think through the implications of a vote, even in the context of a undisputedly legal one? Is “more freedoms” – whatever that means in an area with language protections, educational control, freedom of movement, quite a bit of control over taxes (it’s not zero control as some would have you believe), etc. – more valuable than ability to provide a good living for my family?

          There are very few scenarios that will not create a generation of economic hardship in Catalonia as it struggles to rebuild and connect to other economic institutions. Of course companies and investments will flee. Catalonia will introduce tremendous uncertainty as well as increased transaction costs for investing companies. Part of the reason that Catalonia is economically advanced is that it gets all the institutional economies of scale offered by membership in Spain (it’s largest trading partner) and the EU. What incentives does Spain get for facilitating Catalonia’s exit and unilaterally losing the tax revenue, losing 1/2 its land border to a large trading partner (France), losing taxes from multinationals that were incentivised and courted to set up in Spain and selected Catalonia not to be in an independent country but to be located in Spain/EU, the transaction costs that Spain will have to spend to set up new institutional relations and regulatory frameworks with a new country, etc. Why shouldn’t it look out for its citizens’ well-being over those of the rival Catalans, just as France would seek to lure investments at the expense of Spain? Catalonia will try to compete on lower corporate taxes and other investment incentives (like Ireland did but suffered from later) but without the backdrop of frictionless access to the EU market. In what scenarios should Spain act as a kind benefactor at its own expense for an independent Catalonia? “Hey, go ahead and keep all those economic benefits of being connected by air, train and road to your largest trading partner and don’t worry about any import duties, we’ll give you the same advantages, and your ports can still be used to receive goods that go into the rest of Spain, and go ahead and keep those multinational companies who settled in Barcelona instead of Valencia…” You can bet Spain will use its leverage in the EU to bring benefits to and develop other Spanish regions at Catalonia’s expense. Catalonia will view any protective acts by Spain as unfairly punishing them when in reality it’s a completely normal way for countries to compete.

          Those who stayed home are almost certainly skewed towards those who accept the status quo, realise that the practical costs outweigh the emotional or promised economic benefits or are unsure that they have enough knowledge to make an informed decision. Add to this the additional context of threat of arrest, crowd violence, social exclusion (if I’m known to be of Andalusian parents and not an independentista, would I risk being “outed” as an against-voter?). Then there are other non-voters. If I’m a Catalan living in Toledo, but owning my family’s house in Catalonia, should I get to vote? If I’m a legal resident in Barcelona from another country, should I get a vote even if there’s no way I would have set up my life there had I known that Catalonia would break out of the EU?

          Additionally, the margin of error for the “sample” of votes that were counted is likely very large (one could assume those ballots that were confiscated were more easily confiscated because they were from areas that were less virulently independentista). But your point is taken for those staying home. The un-voters is an unknown, even if it’s highly likely to be skewed towards supporting status quo.

          Anyway you look at it, the voting was not conducted in a way that should qualify as adequate for making a dramatic decision impacting not only 7m residents but the whole country. The Catalan officials knew this but pushed on with their brinkmanship. You can say that the central govt’s context was/is not fair but you can’t use lack of fairness to justify the extrapolation that the vote result is somehow morally and legally binding. Catalonia should be confronting the context for creating a real vote not fighting to protect a deeply flawed vote.

  11. Stevedcfc72
    Nov 11, 2017 at 6:49 am

    Hi DQ,

    Hope you’re well.

    At the moment until something else happens doesn’t appear on the main news in the UK.

    Physically what’s actually happening in Catalonia, are people losing their jobs due to reduced business?

    Presumably people-businesses are spending less-borrowing less due to being more careful?

    What’s the story?

    Regards
    Steve

    • Don Quijones
      Nov 11, 2017 at 12:56 pm

      Steve.

      I am well, thanks.

      Regarding the situation on the ground here, the number of unemployed went up by about 15,000 in October, but it’s difficult to tell how much of that was due to the political situation since unemployment rose by over 50,000 across the whole of Spain during the same period. The fact that Catalonia represents 16% of the population but accounted for close to 30% of the newly unemployed would seem to suggest that an impact is already being felt.

      Certainly people are spending less — 70% of stores in Barcelona said their sales have gone down since the crisis began. My wife works as a designer in a jewellery store in the centre of Barcelona and their sales are down a little on last year, but not sharply. It also seems that most multinationals have put all major investments in the region on hold and people, in particular foreign investors, are not buying much in the way of real estate. Luxury purchases were down by 50% in October.

      But this is not a disaster movie — least not yet. As I mention in the article, it’s like a slow bleed. Economic conditions are certainly not catastrophic but the longer this drags on, the more damage it’s going to do.

      • Cynic
        Nov 12, 2017 at 9:16 am

        For what it’s worth, my cousin who owns a swimming pool business on the coast in Catalonia, says he’s noticed a modest down-turn, and people being ‘tense, and reluctant to spend. ‘

        Nothing major as yet, and this is the quiet season anyway, so we shall see what the peak season is like next spring/summer.

        On the whole, there’s no point in having a villa and pool if you don’t use it, so they are fairly stable.

  12. efeuvete
    Nov 11, 2017 at 8:56 am

    Reading posts and comments here I’ve thought it would be useful to tell something:
    1) I’m 68 years old, I write from Madrid/Spain and I consider the independece of Catalonia a non existent problem but just a struggle for economical and political power from their leaders.
    2) Jordi Pujol (Sr) has used is role as President of Catalonia’s Autonomy from 1980 to 2003 to get a fortune of some 70 Millions Euros located outside Spain and has been proved a Tax offender regarding 4 Mill Euros in 2013. Spanish Justice is triyng now to prove formally (Banking Secrecy) the rest of his fortune.
    3) From 2010 to 2016 the former Ministry of Economy of Jordi Pujol (Artur Mas) has been President of Catalonia’s Autonomy.
    3) Their original political party (IU, Rigth Wing) changed its name to PDeCAT in 2016 with Artur Mas as leader because the legal situation of Jordi Pujol Sr and Jr. The now leader Carles Puigdemont instead of Artur Mas has been a demand of (ERC Left Wing Party) to accept going together with PDeCAT for Catalonia Independence.
    4) Jordi Pujol Jr (Son of Sr) is in today in jail because of proven economic delits.

    Sure this is not as romantic an pasionatte as all I have read here but, you know, is TRUE and easy to check.

    • efeuvete
      Nov 11, 2017 at 9:13 am

      Sorry, a little mistake: The Jordi Pujol and Artur Mas closed Party’s name was not IU but CDC (Convergencia Democratica de Catalunya)

      • Stevedcfc72
        Nov 11, 2017 at 12:17 pm

        Thank you efeuvete for your comments above. Its good to see comments from Madrid also.

        Similar to Scotland getting a vote for a referendum, which they voted against, would you be okay with Catalonia having a free vote on independence sanctioned by the Spanish Government? Not the vote that happened from 1st October?

        All politicians are corrupt on either side of the argument.

        • efeuvete
          Nov 11, 2017 at 1:52 pm

          Yes, a referendum can be today the only way out of this, to me, ambition drive, but a legal one, explaining with absolute detail to the people what are we going to lose economically (Inside and outside Catalunya) to buy that anachronistic flag.

        • Stevedcfc72
          Nov 12, 2017 at 3:30 am

          I totally agree efeuvete a legal referendum is the only way. Its a shame ministers from both sides just didn’t sit down and discuss the issues.

          Your other element you mentioned is the financial implications.

          In Britain we’ve had this thrown at us constantly since the Brexit referendum, sometimes a vote is more than being about the financial consequences.

          I.E Security, Immigration, slavery issues with EU nationals, Drugs gangs from Eastern Europe (Back get control).

        • efeuvete
          Nov 12, 2017 at 6:26 am

          …”sometimes a vote is more than being about the financial consequences”… Yes, sometimes. But this Catalunya Independency tale has not any reason beyond money; not even one; Try asking ANY independence follower there and listen to their answers. Even at a popular level.They use to say “Catalunya is richer than any autonomy in the rest of Spain”.
          We could say something as cheap as that of Madrid Autonomy and of another six or seven more Autonomy areas in Spain. You know, Barcelona has resulted one of the three or four economical poles, cities, of Spain; a situation you can find in hundreds of cities from any country in the world. And is easy to imagine what is is going to be left of that pole if they turn their back to Spain as far as people is concerned; and not only; Very easy.
          Very easy, but for their indepence leaders, that’s a minor problem. In any case they will have more power (And more money) than they have now.

        • Stevedcfc72
          Nov 13, 2017 at 2:15 pm

          Thank you efeuvete for your excellent replies.

          Hopefully for Spain things sort themselves out.

          Very Best Wishes
          Steve
          UK

        • efeuvete
          Nov 14, 2017 at 11:06 am

          Thanks Steve, the more sincere understanding of this mess of ours everywehre, the better for us.

          Fernando.

  13. R Davis
    Nov 11, 2017 at 8:06 pm

    Everyone needs to earn a living here.
    Viva la vida loca man !
    Is it possible that the Mobile World Congress is one of the assets to be stolen as I suggestd in past comments ?

    • michael
      Nov 13, 2017 at 3:30 am

      Stolen by whom? You could also say Catalonia is willing to give up the MWC in the sense that there’s little chance that Barcelona, out of the EU and with far from frictionless travel implications, remains an attractive locale. I suspect all the airline routes have to be renegotiated from a Catalonia rather than an EU perspective. Are there economies of scale implications for EU and or Spain access? Meaning will costs go up for travel to Catalonia?

  14. R Davis
    Nov 11, 2017 at 9:23 pm

    ‘wayward region or locality’

    All of this was not necessary – with a bit of respect for diversity – a little less of a greed mind set on the part of the Spanish element of this saga – & cooperation …. but we know all this.
    Unless it is a planned means to an end & therefore no party is innocent – it is a collaboration on all parts.

  15. Gershon
    Nov 11, 2017 at 11:07 pm

    It seems like the worst possible state of affairs would be a protracted standoff between a deeply divided and polarized population of Catalonia, with the uncertainty and paralysis sending Catalonia and Spain into another downward spiral.

    http://www.reuters.com/article/us-spain-politics-catalona-protests/protesters-flood-barcelona-demanding-release-of-separatist-leaders-idUSKBN1DB0PW

    • Nov 12, 2017 at 11:21 am

      If you’re going to post a link, you need to summarize in a few sentences what this is about.

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