The economic cost of Catalonia’s independence fight

Global Business

The economic cost of Catalonia's independence fight

The Spanish prime minister is giving the restive region of Catalonia until Monday, to clarify if it has indeed declared independence.

If so, he demands the move be reversed. Amid the political uncertainty, more companies are leaving Catalonia, raising concerns over the region’s economic future.

CGTN’s Guy Henderson reports.

The hand-made shoes in Roger Amigo’s shop are sold in Barcelona, but part-made in another part of Spain. In an independent Catalonia, cross-border business may not be so simple. Amigo isn’t worried – he’s backing full independence from Spain.

“It’s been 40 years – and it’s time to arrange this. All the time it’s been Catalonia that is the part of Spain that is trying to change things, who is trying to be more European, who is trying to be more democratic. And when they don’t move one step – there is a moment when we say: enough,” Amigo said.

That is essentially what Catalonia’s president has said as well – though without a date.

In his speech on Tuesday night though, he told nervous investors not to be spooked.

“I’m very conscious that people of all ideas and political leanings are worried, anxious even scared about what is happening and what may come. Gratuitous violence and the decision of some companies to transfer their headquarters, allow me to say, is more related to their markets than to real effects in our economy,” Carles Puigdemont, Catalan President said.

If that’s the case – this shouldn’t concern him: in the hours after, more big companies announced they’d relocate their headquarters to other parts of Spain.

Catalonia the country would very likely find itself outside international institutions – including the European Union. Many economists contest the regional government’s optimistic outlook. Pro-independence activists are promising to bring this region to a standstill if their demands aren’t met in the days ahead.

That may take its toll on this important economic region, which accounts for 19 percent of Spain’s economic output, a country that is only now recovering from years of economic crisis. A sudden break or a protracted stand-off could upset that process. And it could have economic repercussions for the rest of the continent too.