Catalan separatists in Spain won the majority of seats during Catalonia’s regional parliamentary election over the week-end, raising fresh concerns about Spain’s stability and cohesion to carry out long term fiscal austerity plans.
The growing political momentum for separatists in Spain is widely viewed as a negative for conservative Spanish Prime Minister Mariano Rajoy who is committed to unity across Spain and is still trying to hold together the seams of Spain’s austerity banner with its deep spending cuts.
Separatists won 76 of the 135 seats available in Catalonia’s parliament even with Catalan President Artur Mas’ separatist group Convergence and Union Alliance losing 12 seats to 50 from 62.
Catalonia’s four different separatist parties all hold disparate political and economic platforms and expect to hold a referendum secession vote from Spain. But the problem is that they currently have differing time-lines for the referendum vote (E.G. 4-6 years away).
Catalonia’s primary separatist party, the Republican Left, gained 21 seats while the Socialists took 20 seats and PM Rajoy’s centre-right People’s Party won 19 seats.
Two pro-referendum separatist parties and one other party ended up splitting the remaining 25 seats.
Catalan President Mas, who is a born-again referendum separatist, has followed through with unpopular austerity spending cuts, leading to protests about imposed austerity from Madrid and the problems associated with the Spanish tax system which is perceived as not fairly distributing wealth across Spain.
With a population of 7,565,603 Catalonia is the location for one of the largest metropolitan areas in Europe, Barcelona.
Catalonia has a regional economy that is more dynamic and industrial than the other regions across Spain. Its economy nearly matches the economy of Portugal.
According to the Catalan Business Circle, an employers organization which was recently cited in the U.K’s Guardian,
“Catalonia represents 8% of Spain’s territory, 16% of its population, 20% of its GDP, 25% of its tax revenues, and 35% of its exports (and 45% of high-tech exports). In return it receives (in theory; the real figure may be much less) 11% of government investment.”
An estimated €16bn in taxes is paid in Catalonia, about 8% of its economic output, is not returned to the region.
The Catalan protests come a time when Spain is experiencing an economic recession and unemployment rate at the 25% level.
Catalonia’s regional debt has grown to €42 billion ($54.4 bln) from the €140 billion total debt from all of Spain’s combined regional governments.
During Spain’s real estate boom, Catalonia overspent their budget along with many other regions across Spain.
Today Catalonia struggles today to meet their debt obligations.
Pushing for independence in Catalonia as Spanish PM Mariano Rajoy attempts to build state-wide support for a EU bailout package signals that there are still many challenges the lie ahead while Madrid comes to terms with a fragmenting region of Spain that may leave some economic and political problems for the rest of the country to figure out.