“Well written and an interesting perspective.” Clan Rossi --- “Your article is too good about Japanese business pushing nuclear power.” Consulting Group --- “Thank you for the article. It was quite useful for me to wrap up things quickly and effectively.” Taylor Johnson, Credit Union Lobby Management --- “Great information! I love your blog! You always post interesting things!” Jonathan N.

Wednesday, September 12, 2012

Should Catalonia Be a New E.U. State?

                                      Catalons rally in favor of secession from the state of Spain.     Globalpost.com

A crowd estimated at 1.5 million rallied in Barcelona on September 11, 2012 to urge the secession of the Catalonia region from the E.U. state of Spain. I put it this way because the fact that Spain was at the time a semi-sovereign state of the European Union mitigates the importance of whether Catalonia becomes a separate state or not. Similarly, the Egypt region of the U.S. state of Illinois had thrice in the history of Illinois hosted a movement to secede from that republic to form a new state in the U.S.

Whether a Catalonia in the E.U. or Egypt in the U.S., the fact that federal law would presumably still apply lessens the impact of the change, especially in the U.S. because of all of the competencies or domains that had been claimed by the Union at the expense of the powers of the state governments (something the Europeans have been assiduously trying to avoid).

A week after the march in Barcelona, Artur Mas, Catalonia's leader, Artur Mas, had his tax revenue redistribution plan scuttled by Spain's Prime Minister, Mariano Rajoy. Coming on the heels of the march, the proposal can be read as a sort of extortion. At the very least, the plea may have been an attempt to use the rally as leverage to get better terms. To be sure, Madrid had pushed the region to enact more fiscal discipline in exchange for an emergency influsion of $16.5 billion from Madrid. "The effort that the central government is making in terms of reducing spending is inferior to what it is asking the regions to make," Mas argued. However, Catalonina was at the time Spain's most indebted region, with $54 billion of the $181 billion of debt owed by Spain's 17 regions. In this respect, Catalonia resembled the San Bernardino region of California. Mas had been hoping to persuade the prime minister to "allow Catalonia to reduce its contribution to a fiscal system that redistributes part of the tax revenue to other, poorer regions." To be sure, Mas had a point: the most indebted region should put its resources into reducing its debt rather than subsidizing other regions. Concerning secession, however, Mas himself admitted that the rationale went far beyond money.

For one thing, there is an issue of perceived trust and credibility between the region and the rest of Spain. This problem dwarfs the differences in culture and language. In the case of Illinois, the southern region has a distinct culture and dialect, which are much disrespected in the northern regions. In short, the southerners are viewed as country hicks (whereas the rural northern regions escape this verdict). This perception, more than the redistribution of tax money to projects in Chicago, probably accounts for the repeated petitions of Egypt to secede from the republic and join the Union independently. While rid of Chicago, new challenges would undoubtedly be in store for the new state. Similarly, Catalonia would not likely find relations with the E.U. to be an easy street.

Financially speaking, Catalonia as a new state in the E.U. would quickly find the E.U. Commission and the ECB interested in what the new state must do to reduce its debt in exchange for bailout funds. Furthermore, Catalonia would have to contribute funds to the ESF, though it could be argued that it had been doing so already through Spain. On the plus side, however, the "bad blood" or climate of distrust between Catalon officials and Madrid would be obviated by having to deal with federal agencies and officials directly. Indeed, Catalon officials could argue that their region could constitute a state among the existing E.U. states.

With its 6.5 million residents, Catalonia is the size of Bulgaria (and Virginia in the U.S.). The Catalon economy matches that of Portugal. So Catalonia is large enough to qualify or fit at the state level. The fact that Catalonia would presumably still be in the E.U. mitigates the change entailed in secession from the state of Spain. E.U. rules, regulations and directives would still apply. In fact, because the E.U. does interact directly with regions to some extent, the federal-state relationship would not be entirely new to the Catalon officials.

The upshot is that it is not such a big deal as one might suppose were the region to break off from the state of Spain. Accordingly, I would lean toward self-determination over maintaining some kind of "national unity" in a state that is in actuality semi-sovereign as part of a Union. Considering the E.U.'s problems, a primacy ought to be placed on European unity. Acrimony between Spain and one of its regions or large counties does not further such unity. Put another way, there was at the time already enough strife between states on whether still more governmental sovereignty should be transferred to the federal government (or even on whether the E.U. has such a government!). Europe can ill-afford the long-standing discord within a state, whether that state is Spain or Belgium. That is to say, giving the Wallons their own state would also enable people to focus on the defining issue of the day in Europe: What is the European Union?

Sources:

Raphael Minder, “Spain: Hundreds of Thousands Demand Independence For Catalonia, as Budget Cuts Bolster Separatism," The New York Times, September 12, 2012.

Raphael Minder, "Spain's Leader Fails to Reach Deal with Catalonia," The New York Times, September 21, 2012.