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.
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.