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14 de gen. 2015

English Radio (106.9 FM)

Just like Simon Harris, I have been kindly invited by Virgil Simons and Anna Requa to take part (for the second week running!) in English Radio, a programme broadcast on Ràdio Kanal Barcelona (106.9) every Thursday from 9 am to 10 am. Last week's programme was fun, on the prospects for Catalonia's independence, and Virgil and Anne have suggested we cover the following the following six topics this week. An ambitious task indeed, to deal with in just an hour.

Click below on "Més informació" to read this paper.

Here are some of my thoughts.

* A potential "Marshall Plan" for Spain to help stabilize after a break
It is clear that Spain will be forced to sit down and negotiate with Catalonia after the latter decided (democratically, of course) to declare its independence. Otherwise Spain's sovereign debt would be utterly crippling, and without Catalonia's contributions, Spain's pension system would almost certainly collapse.
In sheer monetary terms, the cost of the split, for Catalonia, has been calculated. According to Report 18 by the Advisory Council on National Transition (July 2014), the extra cost for the authorities of an independent Catalonia (based on 2011 data) would be €39,507M, while the extra income would be €45,317M. The fact that this public money would almost totally be spent inside Cagtalonia would give a considerable boost to the economy, of course. 
There would be a saving of a further €7,184M if and when Catalonia stopped helping to pay part of the shortfall in Spain's public budget. However, Catalonia would have to contribute up to €1,100M to international organisations once it was admitted to them.
So the Mr., Marshall 

* The success of Pais Vasco and viability (desirability) for Catalunya
The Basque country and Navarre retain almost complete tax gathering powers (several of these provinces retained this prerrogative under Franco, in gratitude for the Fascist uprisings that successfully toppled the Republic there in the Civil War), and negotiate their contribution to the Spanish budget.
This means that the per capita of public funding is considerably higher than in the rest of Spain: about 80% more, in 2011, according to a (admittedly suspect) calculation made for the Spanish government last year. 
Navarre's economy is 1/11 the size of Catalonia's GDP is €17,557 M, versus €192,545 M (2013). The Basque Country's is under a third: 62,780 M.€.
What would applying their tax funding system to Catalonia (a possibility which, incidentally, was scrapped by the Spanish Parliament from the 2005 draft Statute of Autonomy) mean to Spain?
Well, the Extremadura People's Party have it clear in their mind: their government would lose up to 12% of its funding! So did the Spanish Justice Minister of the day: Ruiz Gallardón claimed that without Catalonia Spain would have to leave the Eurozone!
In a word: part of Spain lives off Catalonia's fiscal deficit, and few regions are likely to decide to live off just the taxes their own wealth creates. Some (like Extremadura or Andalusia) are used to living well beyond their means, quite literally.

Regaining lost services resulting from central government mandates on financial areas that resulted in cuts to education and social services
Since the building bubble burst in 2008, central government has reduced its own expenses far less than it has forced regional authorities to do. It has slashed funding (from the national debt) to these authorities, forcing them to drastically cut back services. The student-teacher ratio has worsened in schools, hospital waiting lists for operations have got longer, there is much less funding for new investments and for maintenance.
While central government continues its mad spate of spending on economically ruinous railways lines for high speed trains to (and through) nowhere, its support for the industrial powerhouse that Catalonia is barely half of what might be expected bearing in mind the region's contribution to Spain's GDP (2014 and 2015 budgets).
As we have seen, an independent Catalonia, once consolidated, could provide services in line with its level of economic development.

* Impact on foreign residents: new NIE's, citizenship, etc.
On page 40 of the Synthesis of the Advisory Council's White Paper, the text states that "naturalment" foreign residents in Catalonia would continue to enjoy their civil, social and political rights as they do today. 
Specialists have also looked into some of the issues raised here, in www.elclauer.cat. It would obviously be in the interest of European Union countries to quickly establish bilateral agreements with Catalonia, as they have with Norway or Switzerland, as regards the freedom of movement of citizens within Europe. 

* Recruiting foreign investment and stabilizing corporations to prevent relocations 
A region whose wealth is being drained, yet has a high industrial potential and a leading position in some services (such as tourism), should surely be more attractive once it becomes independent country. There are plenty of organisations that believe that an independent Catalonia will be good for business and the economy::
There are plenty of organisations that believe that an independent Catalonia will be good for business and the economy:

   * Empresaris per la Independència (within the Assemblea Nacional Catalana).

Others are less optimistic, or downright catastrophic in their analyses: the PP's think tank FAES, the newly founded Empresaris de Catalunya, while news has reached us that the main Spanish are preparing an onslaught to dissuade Catalans from continuing to seek independence.

* Whether or not Catalonia will remain in the EU
This was one of the key issues wielded against Catalan aspirations to independence in the early stages. Early on the Spanish foireignb ninister made it clear that Spain would veto Catalonia's entry (in its own right) into the EU "for ever and ever". However, it is perfectly clear that the EU exists to solve problems, not create them. And that a suitable arrangement would be found, if only to ensure the vast investments of EU multinational firms in Catalonia, such as Volkswagen, during a transitional phase. The EU would certainly have no interests¡ in trade tariffs being set up in such a geoeconomically important part of Europe (much of trade between Spain and the EU passes through Catalonia), or for Catalonia to be driven out of the Eurozone. Nor would it be in its interest for EU citizens living in Catalonia to suddenly find themselves outside the Schengen area. In conclusion, and this is highlighted, for instance, in the book The Economy of Catalonia. Questions and answers on the economic impact of independence, published by the professional guild of Economists.

* Payment and collection of Taxes and Social Security (so-called essential structures of state)
One of the main issues in yesterday's agreement between the main two independence parties is the need, over the next few months, to complete the tax-collecting structures, without which Spain could completely throttle a newly-independent Catalonia. Nevertheless, we all hope that the independence process will, despite all the negative vibes in Madrid, be negotiated between the two parties.

* The drafting of a new constitution
Judge Santiago Vidal has, in its spare time, been coordinating a totally informal drafting committee, for a Catalan Constitution (as is well-known, Spain's General Council of the Judiciary threatens to expel him from his profession for this activity). The formal task, of course, will be in the hands of the constituent assembly, but at least they will have some background texts to draw on.

* What will happen to laws during the interim period?
Until the new Constitution comes into effect, of course, the basic Spanish legislation will remain in force unless modified by the Catalan Parliament. That way there will be no legal void at any stage in the process.

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