What effect would Catalonia independence have on the rest of Spain?

On October 1st, 2017, Catalans took part in a referendum to decide whether to stay with Spain or breakaway. The referendum, which was termed by the government of Spain as illegal and undemocratic, witnessed violence as the Spanish police cracked down on demonstrators, and prevented them from casting their votes. It is estimated that more than 300 people were injured in clashes with the police. Despite the Spanish government’s attempts, 2.26 million Catalans out of 5.3 million voters took part in the referendum, with 90% favoring secession from Spain.

How would Catalonia’s secession affect Spain?

If Catalonia’s breakaway was to happen, the economy of Spain would be seriously impacted. Catalonia is a prosperous region and is a major contributor to the GDP of the country. It is also a major tourist hub of Spain. Catalonia currently has a population of 7,522,596 inhabitants, which represents 16% of the population of the nation. It is a rich region and in 2016, the region’s contribution to the gross domestic product of the nation stood at 19%. In fact, in terms of GDP per capita, of the 17 autonomous communities of Spain, Catalonia occupies fourth place. The three communities ahead of it are Madrid, the northern Basque Country, and Navarra. The region’s GDP per capita averages at 28,600 euros.

In terms of unemployment rates too, Catalonia is far ahead of the rest of Spain. In the second quarter of 2017, unemployment rate in Catalonia was 13.2 percent, while the national average was 17.2 percent. Catalonia also leads in the fields of agri-food and auto manufacturing. The second biggest car producer in Spain in 2016, Catalonia is home to the factories of some leading car manufacturers of the world such as Volkswagen and Nissan. Apart from car manufacturers, other companies that have their headquarters in Catalonia are CaixaBank, which is the third largest bank in Spain; Puig, a perfume firm; textile group Mango, to name a few.

Catalonia is a major tourist hub and in 2016, an estimated 18 million tourists visited the region. Catalonia’s airport is the second biggest of the country, and the port in Barcelona is the third biggest in the country.

Given these statistics, Catalonia’s independence would significantly impact the economy of Spain.

Obstacles an independent Catalonia would face

Even though Catalonia is a prosperous region, the picture may not be that rosy in case the region becomes independent. According to officials of the Economic Ministry of Spain, an independent Catalonia would have to leave the European Union. This would lead to more unemployment, and the rate could almost double. The GDP of the region would also fall 25 to 30 percent, increasing its economic woes. Meanwhile, some economists are of the view that an independent Catalonia would remain in the EU. This means that its GDP would remain stable.

However, in the long-run, the breakaway of Catalonia would affect both the region as well as Spain.

Related Maps: