Catalonia has long been culturally distinct from Spain, with its own Catalan dialect preferred to Spanish. When the nations of Aragon and Castille merged in 1492, Catalonia still had a measure of autonomy, yet has been part of Spain ever since. Recent economic turmoil following the 2008 crisis spurred Catalonians to separate from Spain.
Catalonia is the most industrious part of Spain, and has long been sending “nearly 8 percent of its income ‘to the Center’ (Madrid),” which has pushed many Catalonians to try and break away from Spain, which seems to be in a state of economic decline. Catalonia’s fiscal deficit is currently 10-16 billion euros in tax revenue, which could disappear if they didn’t have to pay that to Madrid. What’s more, the Catalan independence movement calls for more toll roads and less taxation on the whole, which could incentivize industries and educated workers to immigrate and seek opportunity in Catalonia.
Last year, Catalonia contributed 19% of Spain’s total GDP, while it is only 16% of the population. Further, Catalonia sends more (in taxes) to Madrid than they receive in public spending, which has begun to negatively impact the region’s infrastructure. In fact, the regional government suggests that Catalonia was “shortchanged by somewhere in the range of 11 to 15 billion euros.” For this reason, many Catalans believe they contribute more to Spain than they get back.
At the start of this fiasco in 2014, Catalonia’s economic prospects compared to Spain were stellar. Now, however, companies are pulling out likely due to instability and uncertainty about the Catalonian independence movement. Many are relocating to Madrid.
A highly industrialized land, the nominal GDP of Catalonia in 2014 was €200 billion (the highest in Spain until it was surpassed by Madrid region in October 2017) and the per capita GDP was €27,000 ($30,000), behind Madrid (€31,000), the Basque Country (€30,000), and Navarre (€28,000) In that year, the GDP growth was 1.4%. In recent years there has been a negative net relocation rate of companies based in Catalonia moving to other autonomous communities of Spain. In 2014, for example, Catalonia lost 987 companies to other parts of Spain (mainly Madrid), gaining 602 new ones from the rest of the country.”
- What economic and political impacts would Catalonian independence have on the EU? Spain? The Mediterranean? Will it give momentum to other national self-determinism movements like Scotland?
- Spain Unemployment rate: 17.1%, as opposed to Catalonia’s 13%
- If Catalonia seceded, economists estimate that Spain’s GDP would fall 25-30% and unemployment would double.