Sat, Aug 12, 2017 - Page 9 News List

Catalans think twice about risks of splitting from Spain as jobs return

Support for independence peaked in 2013 with a contracting economy and record unemployment, but now Catalan moderates are nervous about putting the recovery at risk

By Esteban Duarte  /  Bloomberg

Illustration: Kevin Sheu

Joan Boix has been attending separatist demonstrations in Catalonia for at least five years, and he contributes to the campaign for a split from Spain.

However, as the regional government in Barcelona girds its supporters for a final push that it hopes will deliver independence, the 62-year-old executive is hesitating. Hardliners talk of setting up a rogue Catalan tax agency or a general strike in order to force the issue; but, Boix has a company to worry about.

“Most of the businessmen I know have to make debt repayments, so an indefinite strike is a hard sell,” he said.

Generalitat of Catalonia President Carles Puigdemont is trying to increase his leverage as officials in Madrid vow to block his plans for a referendum in October. However, the potential costs of a collision with the Spanish state are becoming clearer for Puigdemont and his supporters.

Two of Puigdemont’s senior aides were interrogated by Spain’s Guardia Civil last month and Spanish Prime Minister Mariano Rajoy warned Catalan officials that they could face criminal charges if they use public funds to facilitate the vote. Even the Catalan police, who Puigdemont wants to use to oversee the vote, may think twice — most of their salaries are paid by Madrid.

In the end, those money worries may tip the balance against dramatic action for many Catalans.

Despite its distinct traditions and language, the idea of breaking away from Spain had little mainstream traction until the economic crisis — and the corruption it uncovered — hurt Catalans’ finances and undermined their confidence in the Spanish state.

Support for independence peaked at 49 percent in 2013, as the Spanish economy was contracting for a third straight year and unemployment reached a record 26 percent.

However, Spain is on the mend now. Joblessness is down to 17 percent, and the economy is growing at a pace of more than 3 percent. After a decade of turmoil, Catalan moderates are nervous about putting the recovery at risk. Just 35 percent say Catalonia should be independent, according to the Catalan government’s polling agency. That is the lowest in five years.

Investors are largely discounting the risk of a split. The spread between Spanish 10-year government debt and German bonds is close to its narrowest in seven years, though the yield on the Catalan government’s thinly traded 2020 bonds has jumped by about 50 basis points since the start of last month.

Puigdemont said in an interview last month that anyone who thinks an uptick in the economy will dampen the separatist movement is making a mistake, and warned investors that the movement may roil Spanish debt markets this fall. Others argue that Spain’s attempts at intimidation, including a smear campaign against Catalan leaders, will ultimately backfire.

“If they were winning the political battle they wouldn’t need such tactics,” said Manel Escobet, 63, a member of the national secretariat at the Catalan National Assembly, a separatist campaign group. “The dirty war being conducted by the Spanish state is just helping us to broaden the support for us.”

However, even some of those who would be willing to strike accept that their chances of achieving their goals remain remote. Pere Gendrau, 36, runs a pub in Berga, just over an hour north of Barcelona, and in the late 1990s he was active with the fringe groups that went on to form the anarchist Candidacy of Popular Unity (CUP) platform, which Puigdemont’s mainstream alliance relies on for a majority in the regional assembly.

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