The recently-held (2017) Catalan independence referendum has thrown Spain and Catalonia into severe political crisis and has created uncertainly for the foreign investors inside Catalonia.
What fate would the Catalans have embraced had Catalonia broke away from Spain after referendum?
Catalans from all walks of life would have suffered severe problems had the pro-independence camp got what they wished for in the referendum.
Here’s some food for thought for the Catalans who voted in the referendum and who didn’t, and for the ones who had been a keen spectator from Europe and elsewhere.
Inception of an independent state requires the setting up of the essential state structures, including central bank, tax authority, judicial system, social security, a diplomatic service, a central bank and even an army.
Though most of these state structures/elements are available to Catalonia as an Spanish state/province, there are obvious concerns whether these elements are self-sufficient and mature enough to take the responsibilities of a newly born state.
Had Catalonia become a sovereign state, a greater political uncertainty would have arose. There would be political chaos between the ones who opted for independence and the ones who didn’t.
The ones who sought to remain with Spain, or at least didn’t actively support pro-independence campaigns, could have ended up facing rage and infuriated gestures from the opposite camp immediately after independence (had it been achieved).
Debt, currency, exodus of businesses
Moreover, Catalans would then have to assume a significant part of Spain’s debt. They would have to find a currency other than the Euro, as Spain would veto Catalan membership in the Euro Zone.
Without a confirmed currency in the market and with political uncertainty, there would have been a likely evacuation of multinational and Spanish companies from Catalonia to other parts in Spain. Already some multinational and Spanish companies either left or declared to leave Catalonia immediately after last independence referendum.
Access to EU market
If the membership to the European Union (EU) was delayed after Catalonia’s independence, Catalan products would have lost the privilege of unrestricted access to the EU market.
This newly independent state would have lost the leverages of entering into the EU member states’ markets as a free trade zone – a leverage its commercial products enjoy now as Spanish products.
Duties on Catalan goods and services would have been imposed not only by Spain, but also by other EU member states. Moreover, in times of economic disasters, Catalonia could not have called upon the help of the European Stability Mechanism (ESM) and the European Central Bank (ECB).