Yves here. Neither side appears willing to back down in the battle of wills over the Catalonia independence vote set for this Sunday, October 1. The English language press has described how the Spanish government has declared the election to be illegal and Mariano Rajoy’s government has moved to try to shut it down, for instance, by seizing ballots and arresting the officials who sponsored it. The crackdown led to protests and appears to have turned at least some fence-sitters into supporters of the Sunday vote.
The Economist says that Catalonia’s own pollster reports that 70% of its citizens support the referendum, provided the central government backs the process, and the level of support drops to 48% if the Spanish government isn’t on board. in a Real News Network interview, sociologist Carlos Delclos says that polls put the support for “a legal, binding referendum that has been agreed to with the Spanish State” at 82%. But if this comment from romulo at the Economist is accurate, there can never be a “legal” referendum in the eyes of the central government, even putting Constitutional niceties aside. Declarations of independence are by nature not consensual affairs:
It is a DECLARATION of INDEPENDENCE, not a Referendum.
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Unlike Quebec, Scotland or Brexit which were non-binding Consultative referendums to initiate legislative changes and negotiations. this is a BINDING referendum to approve the Transition Law passed (illegally) on the 7th of September.
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This Transition Law states that a “Yes” vote on 1st Oct allows the Catalan President to declare the REPUBLIC of CATALONIA as an independent state, with full sovereign powers.
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The Transition Law empowers the Catalan President Puigdemont to establish frontier posts with Spain and France and to order the Catalan police (17,000 armed officers) to take control of the Ports and Aeroports from the Spanish Civil Guard and National Police.
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This “Law” has some 90 articles and includes one that states that if the Referendum is stopped (as is most likely), then the “Referendum” result will be considered a “Yes” and that the Catalan Republic has been born.
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The law considers itself a foundational law and REPLACES the SPANISH CONSTITUTION
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A Venezuelan-style PEOPLES ASSEMBLY will be convened, tasked with creating a new Constitution from scratch.
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In this Transition period of maybe a year, this law establishes that the Catalan Republic will take the form of a TOTALITARIAN STATE, though it does not use such terms, obviously, but the President of the Republic would have FULL powers to name top officials, judges, police and civil servants.
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There are far too many gems in this “Law” to mention, but the gist is clear:-
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This is a full SECESSION bid, similar to the one made by SOUTH CAROLINA in December 1860.
In his Real News Network talk, Delclos gives this vignette:
Then another move that Mariano Rajoy’s government has made has been to mobilize 6000 military police onto a cruise ship just outside the port of Barcelona, and it’s actually kind of created a bit of a stir because rather image-conscious Rajoy has tried to avoid kind of aestheticizing this too much as a military intervention, so he put these military police on a cruise ship with Looney Tunes characters painted on them, which has been the subject of a lot of fun memes and certain criticism of the absurdity of it all on social media and in Catalan society. The dock workers here also have mobilized to deny that cruise ship the ability to dock in the port of Barcelona too, so we have something of a standoff right now going into Sunday.
And as Don Quijones pointed out, Catalonia has the nuclear option of a debt default, which would have the effect of burning its and Spain’s house down, economically. Even though the odds of that look low, multiply that by catastrophic losses if it were to take place, and that suggests taking some risk off the table.
By By Don Quijones of Spain, UK, & Mexico and an editor at Wolf Street. Originally published at Wolf Street
In recent days, JP Morgan Chase, Goldman Sachs and ING, have warned about the political situation in Spain’s richest region, Catalonia, where a banned referendum on national independence is scheduled to be held on Oct. 1.
JPMorgan advised its clients to reduce their exposure to Spanish government debt. Although the bank does not foresee Catalonia achieving independence, it believes that developments in the region could lead to a resurgence in Spain’s risk premium.
In the last five weeks the premium (the cost differential of Spain’s 10-year bonds vis-á-vis Germany’s) has increased from 101 to 121 basis points. It’s still not much compared to the 630 points that it reached at the height of the Euro Debt Crisis in 2012, but it’s enough to get analysts on Wall Street and in the City of London to sit up and pay attention.
Economists in London at Bank of America Merrill Lynch warn of two possible scenarios.
“First, although it is not our central scenario, if we saw a great amount of [social] discontent, markets could react more than they have until now. Nothing has happened yet, but there have been several very tense situations.”
For example, last Wednesday when Spain’s Civil Guard raided Catalan government buildings and arrested senior government officials, which sparked a flurry of spontaneous protests outside Catalan government buildings. The elected government of Catalonia, backed by an overwhelming majority of Catalans, is determined to proceed with a referendum that has been prohibited by Spain’s supreme court.
Spain’s knee-jerk response was to dispatch cruise ships to Barcelona filled with police reinforcements drafted from other parts of the country. Cries of “Viva España” (Long live Spain) and “Á por ellos!” (Go get them!) accompanied them as they left their barracks.
As of today Spain’s National Court is investigating people who protested last Wednesday outside Catalan government buildings for crimes of sedition, which are punishable with prison sentences of up to 15 years.
Madrid has also demanded that Catalonia’s autonomous police force, the Mossos d’Esquadra, is made completely subordinate to Spain’s Interior Ministry. Their first big job will be to prevent anyone from getting within 100 meters of a ballot box on Sunday, the day of the vote. The Mossos have so far refused to comply and its chief of police, Josep Lluís Trapero, has said he will not attend any meeting in any Spanish government building.
In other words, tensions between the two sides are not exactly easing.
And political instability is no longer just a threat in Catalonia. In the second scenario postulated by the Bank of America Merrill Lynch analysts, the current crisis could also affect the stability of the central government led by Mariano Rajoy.
The current central government is in a minority and the main opposition party [PSOE] is not very keen to work with it. It is a very fragile balance and if the Catalan situation is not handled correctly, it could lead to a vote of no confidence that might end up bringing down the Spanish Government.
That could prompt a revival of the market jitters that were seen at the end of 2015 and in mid-2016 [a period during which two elections were held to form a government]. In recent days, the PP’s coalition partner, the Basque National Party (PNV), which supported the budget of 2017, has said that it is unwilling for now to support the 2018 budget. Without its support, it will be very hard for Madrid to pass the budget.
The financial pain in Catalonia and Spain has already begun. According to Carlos Perelló, country manager for Spain and Portugal at French investment bank Natixis, Catalonia is already suffering a negative market impact from its decision to move ahead with the referendum on national independence despite .
“We and our partners believe it is not a very rational decision to invest capital in (big infrastructure) projects in Catalonia despite the fact that they offer much higher returns,” Perelló told Spain’s financial daily Expansión. “This is because of the political situation, even though the most likely outcome is that nothing much changes in the region. Sometimes you have to keep the black swans in mind.”
Josep Borrell, a socialist politician, former government minister and ex-board member of recently bankrupt green energy giant Abengoa, claims that in the City of London, which he recently visited, the biggest concern is over the potential impact of political developments in Catalonia on the financial health and stability of the two banks most exposed to the region: Barcelona-based Caixabank, Spain’s third biggest financial institution, and Banco de Sabadell, the fifth biggest.
One risk is a region-wide bank run, as people, both in Catalonia and the rest of Spain, begin withdrawing funds from the two banks, either out of fear that the money could dry up or as part of a boycott. Both banks have already threatened to move their head office, with Caixabank preferring Mallorca as its Plan-B location and Banc de Sabadell, Madrid.
If Catalonia unilaterally declares independence from Spain, they could be cut off entirely from ECB funding. That, according to the Bank of Spain — hardly the most impartial observer — would set in motion a corralito-like event. As happened in Argentina in 2001, bank accounts would be frozen and customers would be able to access only a very small fraction of their funds. And probably not in euros.
It would be catastrophic for Catalonia’s economy. But the rest of Spain’s economy and financial system would be hit very hard too if two of its five biggest banks in its richest region were effectively put out of business at a time that it’s sixth biggest bank, Banco Popular, just collapsed and was taken over by its biggest bank, Santander, and its eighth biggest bank, Liberbank, is beginning to wobble too. By Don Quijones.
Spain’s “ships of repression” are coming to help out. Read… It Gets Ugly in Catalonia
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How does a non Sovereign nation state in the EU, Spain, benefit its people? The EU could just as well be an assemblage of 100 or more small countries, and one big one, Germany?
I’m going to go out on a limb here and say that the problem of Catalonia is not so much a unique independence movement but a fault of how modern countries/states are organized. In other words it is a a systematic problem. You see many other examples of this in play – Quebec in Canada, the Flanders and Walloon in Belgium, the Basques in Spain, the Scots and Irish in the UK, etc. In each case it is unique peoples that feel that their concerns are overridden at higher levels of government and that their wants and needs are ignored. You certainly see this in play in the US in what is derisively termed ‘flyover country’ which I believe led Trump to be elected President due to this.
It does not have to be this way and may I offer the Swiss as an example of this. There is a page at http://www.democracy-building.info/switzerlands-political-system.html which talks about how they organize their country. I have visited this country many times in the past and it seems from what I saw that the Cantons which make up the country have a very great deal of say in how they rule themselves and only conceding overall powers to the federal government. Remember, this is a country that has four languages and cultures in use – French, German, Italian and Romansch – and yet they have not only made a success of it but thrived.
In the west, most democracies suck up more and more local powers and centralize it in the capital. Here in Oz there is even talk occasionally of abolishing the State governments so only having a Federal government in Canberra and all the hundreds of local councils around the country. As an example of this centralizing, the Australian Maritime Safety Authority here has its head office in the Capital of Canberra – an inland city (That is almost as good as the Uniformed Division of the US Secret Service). Maybe Spain should do a rethink and reorganize the country into a federation where Spain is in control of things like foreign affairs and the armed forces but most authority is devolved down to the next tier of government. If they try to have it all, they are in danger of losing everything that they want.
I’m not sure I’d agree entirely with this. Most nationalist movements have very long histories and are rooted in a genuine belief in nationhood (which may or may not be real, but thats another matter). Sometimes its simply a case that different national groups don’t really like each other, it has little to do with the distribution of power – think of Flanders and Walloonia or the Czechs and Slovaks.
In other respects, as we’ve seen, a dislike of central authority doesn’t give rise to nationalist feelings. In, say, Saxony in German in the election it arose through votes for far right groups – there has (to my knowledge) been no calls for a new East Germany or smaller independent province.
And sometimes its not central control, its entirely the opposite. The ‘Troubles’ in Northern Ireland arose not because NI didn’t have enough power delegated from London, it was because too much power had been delegated. The result in NI was that an artificial majority then proceeded to use it to suppress the rights of a minority. In fact, had London kept a firm grip on Northern Ireland and refused to allow sectarian control over local institutions you could argue that the Troubles would never have come about (the IRA was effectively a dead organisation by 1969).
So while I’m generally in favour of federal solutions where possible, I do think that every situation is genuinely unique. I used to have an automatic sympathy for separatists movements, but I don’t always think its that simple any more, not least because nearly every ‘national’ space will have minorities of one form or another.
A significant percentage of the US population rejects the idea that “all men are created equal”. They will never accept that minorities can be citizens.
That’s why when you ask them what specific “unconstitutional overreach” is occurring, you get utter nonsense back.
Things have evolved slowly.
In the 50’s, not everyone could be a baseball superstar.
Today, even with artificially enhanced numbers, sport stars are worshiped ‘blindly.’
“They are not citizens. But they can be gods.”
Where I live, Madrid, the general feeling about this issue is boredom. My catalonian friends living in Madrid combine it with fear. It has been the daily issue in the news for so long! My own opinion is that what is sougth as a struggle for independence is mainly a political battle between a central conservative party and the catalonian conservative party. Conservatives love having people worried with such things as nationality. You can see they enjoy talking about it on TV radio etc. Everything else is forgotten.
This situation is a consequence of the failure of political institutions, both in Catalunya and in Spain. The failures are those now typical in the developed world. The democratic apparatus is a sham (or at least is perceived as a sham) that facilitates corrupt governance beholden to corporate and private interests rather than to popular and public interests. Independence is a utopian solution that really solves none of the underlying problems.
Nationalist politicians (the lowest quality politicians, those who have no substantive arguments) appear on both sides to exploit the situation. In Catalunya, corruption investigations against Pujol and Mas and others destroyed the credibility of the traditional conservative right wing governing party, and its adherents, e.g. Puigdemont, joined forces with nominatively leftist parties led by people like Junqueras (only nominatively leftist because stridently nationalist and explicitly opposed to the redistribution of wealth based on need to other parts of Spain) in an ideologically and practically incoherent coalition dedicated to obtaining independence. The central government, led by the cowardly and inert Rajoy has been incapable or unwilling to take any positive step towards reconciliation, because it correctly judges that taking a hard line against secession plays well outside Catalunya and leaves its leftist opponents, the PSOE and Podemos, in the politically unviable situation of simultaneously defending the right to a referendum and need for legal process and rule of law in any schism. The PP views the situation as win-win, and correctly judges that it will benefit in the next elections, whether Catalunya is included or not.
The underlying problem is Spain’s failed territorial model. Communities such as Euskadi and Navarra are privileged in the sense that their internal funding regimens are different from those that operate in the rest of Spain’s communities. Crudely oversimplifying, tax monies collected in these regions go directly to the regional government, and are not remitted to the central government, for redistribution, as they are in the rest. This situation exists in part as a way of ameliorating independentist sentiment in Euskadi (let’s call it fear of ETA), and has always created resentment in Catalunya. The notion that Catalunya is less well attended economically by the central government than are Madrid or Valencia, is patently absurd, but it has a lot of adeherents in Catalunya because of decades of propaganda attacking the redistribution of Catalan wealth to Andalucia and Extremadura. At the national level there has been complete cowardice (for a long time) in addressing the territorial model. Many of us feel it is unreasonable that different regions operate with different funding regimens (particularly those of us who are genuinely leftist), but it is also necessary to address the feelings of victimization present in Catalunya, however unreasonable they may be.
What another poster stated above is true – outside of Catalunya literally no one has paid much attention to the issue. The mythical person on the street hasn’t even been thinking much about Catalunya until very recently, except in the case that he went on vacation to Barcelona. This is very much a one-sided fervent, and that exacerbates the misunderstanding. No one outside Catalunya has any extra sympathy for its complaints about mistreatment by the incompetent Spanish state, since everyone outside Catalunya experiences the same mistreatment (or worse) by the same incompetent Spanish state.
I am not optimistic that things will end well. The quality of the political actors protagonizing the drama is very low. They lack constructive ideas and they lack willingness to solve problems. They don’t mind causing problems if they see short term personal benefit from doing so, and some appear to be operating with grander delusions. Namely, some appear to see themselves as the founding fathers of a new nation, while others appear to see themselves as the great defenders of a nation united …
Wow Dan. I am very much impressed by the quality of your analysis. Not everyone here in Spain will agree with it but I do. Let me add a little bit to it. A big part of the central conservative party (PP) is the heritage of nationalist Franco and that explains their opposition to referendum. Although Rajoy tries to play equilibrium games between the old-fashioned conservatives and the more modern ones he wouldn’t by no means let the referendum come into play because he doesn’t want to be the “bland” PP leader that let it happen. It is probably the only political struggle that makes him happy, because as you say, it is the only way for him to gain popularity among his electorate that was becoming less and less tied with the party.
This raises the question on the not very smart role that the supposedly leftist ERC is playing in the game.
The issue of independence is not new in Catalonia or Catalunya.
Does self-determination trump exploitative nationalist politicians?
Is a man being beaten by police less brutal if cultural war politicians try to take advantage of it to fan tensions?
I must say I didn’t appreciate the issues here (and I still am not sure of what is being argued). But if Catalonia thinks they can simply ‘vote’ to leave Spain (and the simple question being voted on looks that straight up and down), well, even I, who believe in decentraizing power where possible, will sit up and say good luck with that. Coming from the part of the USA that tried that move about 150 years ago (Alabama), I can say it will not end well.
Thanks for the posting.
Debt Jubilee for the entire EU … on the German dime. Couldn’t happen to nicer people. They could have started with Greece, but the EU project is too lucrative for France/Germany. Basically extend the E German solution across the entire EU system, leaving the sovereign countries, as states in a German federation. But the carrot is a debt Jubilee. I doubt the Germans are brave enough for that kind of gamble of trading debt for power. If everyone in the EU is German, then Germany assuming the debt means the debt is spread over all.
Let Catalonia petition for German citizenship not just independent EU membership.
Hi all
I have gone through a hard week. The massive police operation had an impact. It was meant to instil fear and it seems to have succeeded with me. The role of Spanish media, playing along the official tune (conveying rumours of the taking over of Catalan institutions by the Spanish government, for instance) has been fundamental in spreading the message that Papá-Estado was going to take control and everything would be over in a few days. I shouldn’t read them at all. When it comes to Catalonia, the Spanish MSM are basically a source of centralist propaganda. Two or three years ago, Guillem Martínez, one of the few decent journalists in El País, wrote about his interview with a Wall Street banker: the banker told him that his bank, which had interests in Spain, would find literally no information about the country in the Spanish press, so they kept up with events through their own reports. And that was about broader issues. Imagine what it is like when it comes to Catalonia.
Anyway. Bad week, only now recovering. Part of my optimism about our cause had to do with the conviction that they couldn’t send in the tanks. No objective piece of data against that conviction, so far; but the determination shown by the Spanish government and the number of Guardias Civiles (some say up to 11,000) sent to Barcelona have sown the doubt in me. For some days, I thought that that was it. We were alone with the military. Peaceful protest wouldn’t do it, and as soon as there was some semblance of a riot they would have their excuse to send the army (there are widespread reports of policemen infiltrating among pro-independence demonstrators and inciting to violence; the repeated calls to peaceful protest by pro-independence politicians and civil society leaders are for a reason). After some days of fearing a serious crackdown that would lead to a protracted regime of repression I think that we are seeing light at the end of the tunnel. And I am recovering bit by bit the conviction that the tanks are out of the question.
I have had some conversations with people in the country (I live in Australia), and they all point to some facts:
1. The crackdown has shored up support for independence, clearly. There is indignation not only among the pro-independence usual list of suspects.
2. There is going to be a vote in rural Catalonia. I would say as close to 10 km from Barcelona. The Catalan police, still in the hands of the Catalan government will go through the formalities required by the judiciary and then sit back and let it happen.
3. Barcelona is mixed (me: it is becoming clear that those Spanish policemen are meant to focus on the city. We’ll see massive demonstrations. If people can’t access the polling stations, it will happen in the street. People may not vote on Sunday, but it might happen on Monday or Tuesday. I see scope for violent incidents, but I would say that it will be mostly peaceful demonstrations and people aiming at outsitting or outwitting the police. People in rural Catalonia are talking of sorting out their vote early in the morning and then going to Barcelona. The numbers are with us).
4. Two of them (the most politized ones) were aghast at the lack of reaction in Spain.
5. People mention fear, but also talk clearly about a popular will to vote.
In Spain, this is just a public order problem, and when there is one the only thing to do is to send the police. If the problem is very big, then you send lots of policemen. In Catalonia it is political. No common ground. The no common ground theme cuts across all aspects of this conflict.
Again, this is getting long. I’ll try to finish quickly.
Dan F makes some apparently reasonable comments from a position that I understand is sort of equidistant, (which is usually the disguise of anti-independence partisans who are aware that they don’t have a proposal to make or are just wishing this wasn’t happening), but there are a few points that I think are seriously misleading:
1. Explaining everything as petty politicking from Catalan politicians and blind blunders from Madrid. False. This conflict is centuries old. If it didn’t come to a head before was only because Catalans were acutely aware that the military option was on the table. It was always boasted about loudly by the Spaniards. One generation grown in a democracy (of sorts) and we are asking for independence.
2. He says: “The underlying problem is Spain’s failed territorial model”. The territorial model is only the expression of a deeper problem: is Spain one nation, hence the Catalans (a minority that will be systematically outvoted) have to submit to the general will; or is Spain made up of several nations, among which the Catalans, that would be entitled to deciding their own future? These are two irreconcilable positions. In Spain the first one is set in stone (and it has always been backed by State violence). In Catalonia, the second one is dominant. The extremes to which language in Spain is stretched to hide this conflict are amazing. They talk and talk about the territorial model to convey the impression that there is nothing really wrong in Spain, that this is all about finding the right technical solution for a chapter in their Constitution, refusing to acknowledge the real issue. This attitude (and the attending consequences in Spanish political jargon) also applies to fiscal or cultural issues.
3. He describes correctly the Basque-Navarre fiscal arrangement. But that is just not going to change and is not part of the solution.
4. Then he says: “The notion that Catalunya is less well attended economically by the central government than are Madrid or Valencia, is patently absurd”. Delirious. The whole infrastructure policy in Spain is a Spanish nation-building exercise aimed at inflating Madrid’s weight. And the fiscal receipts figures for Madrid are just a joke. It is 18% of the economy and over 40% of tax receipts. They are totally fictitious figures. And Valencia is a region that is below the Spanish average for income per capita and is a big net contributor to the budget. If the Catalans have reasons to complain about taxes, the Valencians should just start a war about them. Fiscal arrangements in Spain are not of this world. Catalonia is, if I remember well, the fifth region in gross income per capita, but the tenth (out of 17) after taxes are levied. The expenditure per head in health and education is lower in Catalonia than in subsidized regions in the south.
This is not a conflict about taxes, though. It is first and foremost political. The fiscal dimension is added. It often happens that people argue in financial terms because the sense of grievance, or the desire to decide their future are felt as woolly concepts, but taxes, numbers are something real, something you can discuss. Also, my obsession with infrastructure spending. Infrastructures and infrastructure spending are real. But what is really at stake when discussing them is the model for the country chosen by the Spanish governments for the last three hundred years.
Re. Don Quijones’ article, a few questions:
1- What is so bad about the Catalan default? Catalonia has no access to markets. Something like 80-90% of Catalan debt is held by the Spanish government. Since formally both governments are part of one same entity (the Spanish state), defaulting would be a default of Spain to itself. Is that really a problem? Also, can’t the ECB sort Spain out of a downgrade, at least for the time being?
2- The bank run: I haven’t thought of that scenario while still in Spain. How likely is it to happen?
3- Unilateral independence will lead to the disastrous scenario only if the EU pushes for it. Cutting off funding to banks would probably lead to general collapse of the Spanish banking system, and possibly the European one. They need really compelling political reasons to do that. And the Catalan government is willing to remain in the EU. Would they do it?
4- The question of unilateral independence is all about facts on the ground. If we declare it and control the territory (expel the Spanish institutions, collect our own taxes…) we’ll see agreement with the EU straightaway. If a unilateral declaration is just a show for the gallery… well, that would have no implications for the EU, things would remain an internal affair.
I would keep going, but I am really tired. Could someone answer some of my questions?
Cheers.
Interesting points Jesus,
I am not the most qualified to answer your questions point by point. However I would point out that a lot depends also on how the EU will react depending on the outcome.
I am not specially pro-independance of regions of european nation-states. It is a different matter for instance with the french islands all over the world, which are still a form (different but still…) of colonies. I support all their independence mouvements.
I am more prudent with dislocating nation states. And I don’t know enough about Spain.
But although it might be too late to solve it now, the question seems more a matter of political/state organisation. I am making an analogy with the history of Brazil, when the first republic was proclaimed, the historical analysis is that back then, the federalist question was more important than the republican question. I think he put it this way: before being a republic, it must first be a federation — ie a way to deal with regional forces in a huge and very unequal country.
Isn’t there some of that for spain? If so that would support part of Dan F comment: it is a bit the fault of very below average politicians (Looking at you Rajoy, but not only).
I am not saying they are responsible for the crisis, but this has been coming for a long time, and like the british with Scotland, the central government was to in the least disdainful with that question.
Eu has been very rigid (read dumb, deaf and blind) in regards to economic questions. Just look at Greece or malta or the baltic states. Now these where tiny economies. Spain is not, and since Europe makes up its rules as it goes, anything is possible. So they might support Spanish banks, or not. What will decide EU’s attitude I think is neither the result of the vote, nor the dire economic situation that might ensue for both Catalunya and/or Spain. What will determine their position, is the risk for German and French banks, as it was for greece. If they can protect these by walking all over catalunya (and spain if need be), they will. If not possible, then they might support the banking system.
But that is a big if. After what they did to Greece, anything is possible for any country (Germany not included).
Now for the question on the default within Spain, there is a hitch. Yes it is within the same nation. However you might also look at it this way. Consider that all that debt (spain’s catalunya’s, spanish banks’ debt — all of it) was for instance in dollars. Due to some foreign entity. If catalunya doesn’t pay (transfer) its dollars to spain or this or that bank, there is no guarantee that this next entity (let’s say spain) will have the dollars to pay its dues to whatever foreign institution. If it was a internal debt denominated in the national curerncy, then it would be much less problematic.
But that is not the case, and as it is, the Euro is a foreign currency for Spain and catalunya (since they don’t “print” it themselves). So I think (but I could be utterly wrong, there are far more competent people here) debt default is the nuclear option/deterrent (as it was for greece according to Varoufakis, in his latest book — very much worth reading) : if catalunya defaults, there is a serious risk of cascading defaults. And Spain is no Greece or Malta in economic terms. The impact of a debt crisis for Spain would be very big I would guess.
That would put everything in the hands of Mr.Draghi, and look all the good that did to greece…
In itself a bank run can always happen. If the referendum goes on, and is won by catalunya, then all depends on what Madrid will say. They can cause part of the bank run. Not Everyone needs to go to the bank cash their money to put a bank in trouble. Just a fraction of their clients need to. And that can be enough. God knows what the ECB would do (in good or bad)
As for EU going for the worst, I wouldn’t put that beyond them… Once again, Malta, Greece… And facts on the ground only matter for realist, responsible and pragmatic people. None of those are at the head of the EU or the ECB nowadays… And it was clearly suggested, more than once, that Malta was a test of a method (closing the banks), Greece was made an example for all the other EU members. The aim was probably at Italy, Spain and France.
As for remaining in the EU, that would seem obvious to me, but I don’t understand the conditions for this. I remember Scotland was threatened to be booted out if the voted the “wrong” way.
Can anyone here explain how is it that a country part of the EU, if it came to break down, its parts wouldn’t be anymore? If the whole was a member, why its parts should not remain members ? Anyone knows what is the legal basis for these threats?
My understanding is that since the signatory of the relevant EU Treaty is the sovereign government of the particular country, then the extent of the EU by definition only applies to the territory of that country. So when (for example), Greenland left Denmark in 1982, it was no longer considered part of the EU (although confusingly, as Greenland citizens are still Danish citizens, they have EU passports). I don’t think there is anything sinister about this, this is how all international treaties deal with new countries and changing boundaries.
The reason for a hostility to accepting any ‘new’ countries is simply that those countries (such as Spain and the UK) with restive regions insisted that this is how it should be.
In reality though, its likely to be very messy even if the EU insisted that Catalonia had to apply anew. As an obvious issue, everyone in Catalonia would still have an EU passport and would be likely to reluctant to surrender it, even if they were pro-independance. I suspect you’d see a lot of wrangling over whether Spain would accept dual nationality.
Thank you for the clarification. I didn’t remember the Greenland precedent.
I understand the signatory parties are one thing, but “common sense” would suggest that these central governments signed such treaty’s as representatives of their people… And therefore their other representative institutions, such as regional governments etc. But yes I do know common sense does not apply to these things…
So if I understand the implications of that, if tchecoslovaquia had dissolved itself in 2 countries *after* joining the EU instead of in 92, neither subsequent states would be a member ? That seems an absurd logic, and therefore is most certainly the logic followed in Europe ?
“The crackdown has shored up support for independence, clearly. There is indignation not only among the pro-independence usual list of suspects”
Ignacio,
Very true! United Nations just released a document. It states that the Spanish Government “must not interfere with Catalan’s people fundamental rights to freedom of expression, assembly and association” and “The measures we are witnessing (by the Spanish Government) are worrying because they appear to violate fundamental individual rights,cutting off public information and the possibility of debate at a critical moment for Spain’s democracy”
Although I am totally objective as to the referendum, it seems obvious to me that most are not aware of the definition of sovereignty which Catalonia is asserting. There are few of us who would prefer to be ruled by a Parliament located in another country over which we had no Rule of Law or legislative boundaries on which we voted. The whole idea of a United Europe is simply insane and quite totalitarian in premise. It appears that many Europeans are coming to this conclusion; except of course, the globalists who are salivating at their control over all aspects of European life.
Forgive me for my ignorance, but what is the point of an ECB where euro denominated bond rates can be so diverse for member countries, is it just a flexibility that bond market operators can be trusted with and not member nations?
To the very uneducated eye, it suggests different disciplines for different sectors.
With all due respect, let me question and refute some of the items.
1.”It is a DECLARATION of INDEPENDENCE, not a Referendum”
No. It is a referendum. If the democratic outcome of the referendum is Yes, it triggers the Declaration of Independence
2. “Unlike Quebec, Scotland or Brexit which were non-binding Consultative referendums to initiate legislative changes and negotiations. this is a BINDING referendum to approve the Transition Law passed (illegally) on the 7th of September.”
The Transition Law (Llei de Transitorietat Juridica i Fundacional de la Republica) lays out the legal framework whose transition period would be under. It provides its regulation and the consecutive phases with their procedures towards the path to the formation of a Catalan State. In other words, and unlike Brexit, explains voters how the secession from Spain would come about and not only that such secession would come about. The Transition Law was passed legally under the constraints and impediments from the Spanish Government. The Transition Law only comes into effect if the referendum’s outcome is Yes. One of the purposes of the transition Law is to avoid a legal and political vacuum until the Catan people democratically decides on their Constitution and Government Bodies.
3.”A Venezuelan-style PEOPLES ASSEMBLY will be convened, tasked with creating a new Constitution from scratch”
The Constitution will be created from the input from civil society (not only politicians) with permanent consultation by legal experts. Then, the Constitution will be voted upon by all Catalan citizens through a referendum. This is neither Venezuelan-style, nor communism, nor totalitarianism, but a participation and a saying by the Catalan people on the making of a product instead of a take-or-leave final product produced without civil society’s participation. It is called de facto democracy.
4.”In this Transition period of maybe a year, this law establishes that the Catalan Republic will take the form of a TOTALITARIAN STATE, though it does not use such terms, obviously, but the President of the Republic would have FULL powers to name top officials, judges, police and civil servants”
I have read the entire Transition Law three times. I have not idea where this comes from. Please, elaborate or substantiate this blunt statement.
>in Spain’s richest region, Catalonia,
As somebody smarter than me pointed out a long time ago, it’s always the bourgeois that revolt. Poor people are too busy trying to feed themselves.
Not complaining, in general it’s good that there’s somebody to revolt. In this particular case, I don’t have the slightest clue if it’s good or not and am reading the commenters avidly. I know I’ll get better info here than in the US MSM.
a different Chris,
We are mostly seeing in the USA reports from the Spanish Government and the media aligned with it. Most of us have enough going on here in the USA and in our own personal lives to have time to research from other outlets with a different view on this matter. The claims to a referendum (not necessarily to independence since many of those who want a referendum do not advocate for secession) come from people of all ages, political backgrounds and ideologies, incomes, blue-collar and white-collar workers, public and private sector employees, professionals and not professionals, students from private and public learning institutions.
Some parts of “Wall Street” and the “City” maybe getting nervous about this situation, vis a vis some of their clientele, offering that artfully worded advice that will be seen to be oracularly correct in the aftermath. But you can bet your sweet bippie that other parts of the Giant Vampire Squid are slavering at the looting possibilities that this crisis/disruption might open up to them. And acting to increase the beta.
I wonder which horses the various parts of CIA and State and EUCOM/CENTCOM are backing? And what “inputs” they might be adding to the mix?
Never let a good crisis go to waste.
Hi again,
@Pablo: thanks for your comments. In particular, the Brazilian issue re. federalism and the republic is very interesting. I didn’t know about it at all. I’ll try to research it. If you have any useful reference (Portuguese is fine) I’ll add it to my list of books to read ;-) (I usually go through it in only two or three years!)
Regarding the conflict, I posted a comment that I can’t find about the Spanish centralism. I wouldn’t want to have repeat that. It was some days ago, possibly a couple of weeks. I got a thanks’ note from Yves (which I in turn thank now). It was about the building of a strong economic Madrid region. If it could be found it would save me a lot of effort.
@PlutoniumKun: very good comment on the kick-us-out-of-the-EU issue in the case of unilateral independence. I would add, though, that there is more than that: the European Economic Space (the common market, to put it plainly) is not the EU. You can be in it without being part of the EU (Norway, Switzerland…): it is about the four pillars that the British are struggling against. There is room for a face-saving agreement for Spain: we are left out of the EU, but remain in the common market. Minimal disruption for the EU and for Catalonia (where minimal might not even be acceptable for the EU, though: I am not saying that this is going to happen; it is just a possibility).
The automatic expulsion mechanism, though, is a Spanish fantasy. It is part of their propaganda machine. It wouldn’t happen. It would be a political decision. Not the Commission, not the European Parliament: it would be the States. And there is something that hasn’t been discussed at all as far as I know, so this is strictly my guess, but I think that I have a point here: to expel us, we have to be recognised as a State. If we are not recognised, there is no possible expulsion. That means that we have to be recognised by both Spain and the EU. Now, the EU would decide that by consensus. That means that any Member state would wield a veto power. Sending Catalonia out into the cold interstellar space would mean that those States’ companies with interests in Catalonia would suffer, their citizens living in Catalonia might have their lives disrupted, financial sectors could see problems (think of the Spanish government debt that is all Spanish, zero Catalan in the absence of a divorce agreement). The question is: why would they do that? They would just block recognition of Catalonia until a suitable agreement was reached. Spain claims that it would block access of an independent Catalonia to the EU. It can do it. But it can’t do anything about any other country blocking our expulsion in the first place. Sort of funny. It would be a political decision, by consensus, and way, way less testosteronal than so many Spanish pronouncements on the issue. If the EU is in a hurry for an agreement, they will push it politically. If they want to slow it down, they can send the case to the European Court of Justice and get it mired there for the required period.
And things would be focussed on things on the ground. Again: if we control the territory, we levy taxes, the Spanish judiciary and police are ineffective… then we can sit and have a laugh. My bet is that Spain would last weeks until it had to accept a humiliating defeat. But if we still have the Spanish police around then it will be political struggle in Catalonia, which is what I think we are going to see in the next months.
@Sue: very good points. Do I perceive a certain sympathy for the Catalan case?
Sorry to have to say this Yves, but I concur with Sue that the use of “totalitarian” in the debate is out of the question. I understand that they are not your words, that you may have found the source reliable because of other posts or that you may have just wanted to convey a sense of what was going on; also, I am fully aware of how hard the whole comments issue has been for you recently. The last thing that I would like to do is to hurt you or to put you on the defensive against comments again. I am (as many others are here) extremely grateful for this comments section and would definitely like that it remains open and respectful.
So: the T-word. Its use in Catalonia to smear the pro-independence party has been widespread until recently. It sort of went away end of last year, but these days it is making a comeback. The (kind of) conversation is as follows: We want to vote and decide our future. You can’t because Constitution says no. But democracy is about deciding collectively issues that are relevant to people, not about blindly following a procedure decided upon 40 years ago, right after a dictatorship and under military threat. You’ll have to change the Constitution, which is open for revision. We are a minority so there is no way that we can change it. Well, if it is not allowed by Constitution it is not possible. We will decide our future in a democratic vote, anyway. You can’t just vote on anything, there are rules, and voting is not in itself a guarantee for a democracy, just as Hitler’s rise to power shows: you are just a bunch of totalitarians disguised as democrats, this referendum is a repeat of Germany in the 30s, totalitarianism, racism…
The interesting detail (and it speaks heaps about the quality of the Spanish democracy and the solidly centralist conceptions that underpin the current regime) is that this discourse is not limited to hotheads (or paid trolls, they do abound in this case) in highly politicized comments sections over the internet. Spanish government members would repeat the totalitarian mantra shamelessly. The Spanish government vice-president would say it regularly for months in the press conferences after the usual cabinet meeting of every Friday. She stopped doing it last year because the European Commission, alarmed in particular by the levels of hate speech in Spanish public discourse against Catalans, issued guidelines about hate speech and the banalization of genocide (another one of their favourite words, only in this case it is cultural genocide) that were aimed in particular at the Spanish government.
I have to leave it here. Thank you all for your comments.
And by the way, re. the bank run: if things get hard and we have to undergo a period of repression, bank-run activism is an option that I hadn’t thought of! Gee, that would be fun!
Thank you NakedCapitalism. I love you!
:-)
And again:
link to Sue’s quoted UN statement:
http://www.ohchr.org/EN/NewsEvents/Pages/DisplayNews.aspx?NewsID=22176&LangID=E
An this is, it seems, the original statement by de Zayas before the UN bureaucratic machine run roughshod over it:
https://dezayasalfred.wordpress.com/2017/09/23/media-statement-violation-of-the-right-of-self-determination-of-the-catalan-people/