Catalonia Independence?
Camden Moeller
Catalonia is a wealthy region of spain that accounts for 25% percent of its exports and is 19% of Spain’s gdp. Catalonia is considered by many as the most economically powerful and rich part of Spain. They also have their own language and their own culture that is separate from Spain. After being hit by the 2008 recession Spain didn't have the money to bail out its financial sector so it had to lend money from the EU of up to 100 billion dollars. Ever since the recession Spain's budget deficit has been growing at a higher rate than the eurozone average. This economic crisis propelled independence parties in Catalonia parliament to a majority in the 2015 election. These independence parties want Catalonia to leave Spain. But Catalonia leaving would be bad for Catalonia, Spain and Europe as a whole.
Since the controversial referendum vote for independence on October 1, The Catalonian president, Carles Puigdemont, is expected to declare independence on 10/10/17 6:00pm Spaniard time. Mr. Puigdemont might say he has a mandate after the independence referendum, deemed illegal by Spain, where 90% of Catalans voted to be independent but with only 43% voter turnout. The opportunity cost of simply declaring independence would mean that Catalonia would close the door on more regional autonomy and loose its benefits of being apart of Spain. Declaring independence would lose their chance of negotiating with Spain. Spain is part of the eu which means it has free trade with most european countries and can travel freely across member states. But right when Catalonia secedes it would immediately lose eu membership. And it would not be eligible to become a member-state because Spain would veto it.
If they did succeed in seceding they would also have an import cost increase because countries would then have tariffs which would raise the price of exports and cost more to export. This would slow economic growth. Spain would also be severely impacted as it would have instant loss of their gdp and would lose Catalonia which subsidizes, support financially, other regions. Even though Catalonia contributes $228 billion to the spain gdp it still needs to consider the economic impact of leaving the eu will damper its economy.
Works Cited
Ellen Barry, Raphael Minder And Palko Karasz. “Catalans Defy Spain and Vote on Independence, Clashing With Police.” The New York Times, The New York Times, Jan. 2017, www.nytimes.com/2017/10/01/world/europe/catalonia-independence-referendum.html.
Henley, Jon. “An Independent Catalonia: Practicalities of Leaving Spain.” The Guardian, Guardian News and Media, Sept. 2017, www.theguardian.com/world/2017/oct/09/an-independent-catalonia-practicalities-of-leaving-spain.
The Spanish region held a controversial independence referendum on Sunday with major economic implications for the country --, and Europe. “Spain Loses 20% of Its Economy If Catalonia Splits.” CNNMoney, Cable News Network, money.cnn.com/2017/09/29/news/economy/catalonia-independence-spain-economy/index.html.
Webdrizzle. “Catalonia's Cry for Secession .” Recent Current Affairs, www.iasparliament.com/article/catalonias-cry-for-secession.
This is really interesting because I don’t think most of us knew about any other country’s independence and the fight for it. My curiosity was sparked when the opportunity cost was mentioned because in our history it seems like every country or area that has formed an independence, only good has come of it. But this is the viewpoint that it is not always the best option because there is a loss of unity in the country and economically it can hurt both parties because of any trade. I think that Catalonia should not be independent because of the higher opportunity cost for not just them, but all parties.
ReplyDeleteIf Catalonia became independent, that would ultimately not benefit Spain or Catalonia at all - just like you mentioned. Although within the circumstances it may seem like Catalonia needs to secede from Spain, a big reason being the 2008 recession, it overall is not a good decision. There would most likely be some chaos due to the fact that the economic growth would slow, and because the import cost will increase. Since these consequences will occur as you mentioned in your post, I agree that Catalonia should remain in Spain and not secede from the country.
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ReplyDeleteConsidering the outcomes of Catolina seceding from Spain, seems to be relatively negative. Therefore, I believe it would be in Catolina’s interest to remain a part of spain and should not claim independence because not only will they lose unionance with Spain, but they will lose their main source of trade. Like you said, because Spain is a member of eu, if Catolina becomes independent they will lose their economic support and lose the wealth that makes them stand out in Spain. So overall, it would negatively imapct Catolina and its citizens.
Wow very informative! After conducting some additional research, I discovered that Catalonia is one of Spain's wealthiest regions, but a stream of companies has made plans to move out of the province in the midst of the crisis. Also, the European Union (EU) had made it clear that should Catalonia split from Spain, the region would cease to be apart of the EU. Despite the fact that Catalonia makes up 19% of Spain's GDP, the opportunity costs put too much at stake for Catalonia to declare independence. Besides the crowd of independence supporters in Barcelona who continue to protest, it would be interesting to analyze the stance of other European countries on Catalonia's plea for independence from Spain.
ReplyDeleteOverall this decision in my opinion is defiantly not the right choice. "But Catalonia leaving would be bad for Catalonia, Spain and Europe as a whole." This shows this is a lose, lose, lose situation as Catalonia would lose trade as it is no longer part of the EU, Spain would lose 19% of its GDP and Europe would lose trade with Spain and Catalonia because it is no longer a part of the EU. This is why the opportunity cost is much greater for this decision rather than if Catalonia were to stay with Spain and not get rid of a large part of Spain's economy.
ReplyDeleteI think this was a very unique and interesting topic. Not only does opportunity cost relate to selling products but it relates to the cost of Catalonia separating and how it affects all the other regions around them as well as their own. Since Catalonia is such a prominent percentage of Spain's economy I can see how there is much debate on what the right decision is. Like everyone else says, I agree that the opportunity cost is would do more harm then good in this situation.
ReplyDeleteI agree that if Catalonia where to leave Spain it would be bad for Catalonia, Spain and Europe as a whole. I though that it was very interesting about what you said about the opportunity cost. I was also surprised because this seems like a very big and controversial topic and I have never heard about it before.
ReplyDeleteI agree that if Catalonia were to leave Spain, it would not be beneficial to Spain or Catalonia. I did some further research on the topic and if Catalonia were to leave Spain, it would also have a great impact on the sport of soccer. F.C. Barcelona, a soccer club based in Catalonia currently plays in the Spanish soccer division. If Catalonia were to leave Spain, Barcelona would have to option to leave the Spanish division, and join the neighboring French soccer division. Additionally, Gerard Pique, a center back for F.C. Barcelona, has publicly expressed his opinion that Catalonia should leave Spain. Because of this, he has been booed by fans of F.C. Barcelona and the Spain national team. In the end, Catalonia leaving Spain is a big decision not only politically, but involving soccer as well.
ReplyDeleteI somewhat agree with the viewpoint you expressed relating to Catalonia's pursuit for independence. As Catalonia's economic and political future would be unclear if they were to leave Spain, they cannot be entirely certain as to what exactly their opportunity cost might be. As they are taking a gamble with leaving Spain and relinquishing their position of autonomy and influence within the larger nation, their future is anything but certain. The question then comes also with economic partnerships already in place between other EU member states and whether or not they would be willing to continue them with Catalonia post-independence from the larger, more influential and established nation of Spain.
ReplyDeleteI have been following this event closely as well. Not only would Spain lose the Catalonia's valuable contribution to GDP, they would also lose the access to the ocean, which is where a large percent of Spain's goods are exported from. As you stated, the impact on trade would be substantial because of Catalonia not being part of the European Union. That could possibly leave other countries (outside of just Europe) hesitant to trade with Catalonia. In addition, Catalonia holds a majority (compared to other Spanish regions) of the population, so if Catalonia were to become independent, Spain would lose a large chunk of their labor force. While Catalonia's independence may be beneficial for that region, it certainly is not for Spain.
ReplyDeleteFor Catalonia to exit Spain would be near suicide for both nations. Catalonia has the stability and capital to make their own goods, but being excluded from the EU is a large deal breaker for them. Spain also has repercussions waiting to hammer them. It would be wise for them to negotiate an alternative resolution.
ReplyDeleteI don't think Catalonia leaving Spain would really be nearly as harmful to them as it would be to Spain. As you mentioned, Catalonia is a major exporter in Spain and is considerably wealthier than most of Spain. Free EU trade or not, they could be very successful. If anything, Catalonia could very well be better off if they were to be independent, seen as how they would not have to share financial burden with the rest of Spain.
ReplyDeleteI thought this was a interesting topic. I never knew that there was complete separate community in Spain that wanted their own freedom. Spain has to step up their economic strategies to rise the GDP if Catalonia is a big chunk of their successful GDP. I think Catalonia's Independence was a great choice from the president because it won't be economically dependent for all of Spain. (Vinny)
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