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Catalan independence may hurt Spanish economy

July 24, 2017

Spanish business leaders think Catalonia's push to split from Spain is negatively affecting the economy, even if the effects are not directly impacting their companies. The economy minister also warned of economc damage.

A Catalan separatist flag being flown at a rally
Image: Reuters/A. Gea

Three out of four directors of Spanish companies believe that the Catalan movement for independence from Spain is proving detrimental to the national economy, a poll published in the Spanish Newspaper El Pais has revealed.

Read more: Weber says EU wouldn't accept Catalan independence

Within Catalonia, the share of respondents who held this view was 43 percent. El Pais pointed out that Catalan businesses have undertaken publicity campaigns expressing their discomfort with the secessionist movement. Separatists would like to see the region in Spain's northeast unilaterally split off from the rest of the country and become its own independent state.

Some 20 percent of national respondents believed the push for Catalan independence was not affecting the national economy. One percent of respondents believed it was having a positive impact.

But when respondents were asked about the direct consequences on their own businesses, the answers were different. Some 59 percent believed their individual business were not affected, whereas 34 percent thought their companies were negatively impacted. One percent thought the impact on their businesses was positive.

The poll conducted for the newspaper by consulting firm Deloitte surveyed 265 companies which employ more than 800,000 individuals and have combined turnover of over one billion euros ($1.16 billion).

Tourists sunbathe on a beach near Barcelona in Catalonia
The tourism sector is particulary concerned about secession's negative impacts. Catalonia's beaches are a popular destination for many European visitors. Image: Getty Images

Read more: Germany's skilled labor shortage - the Catalan connection

Among the different economic sectors, the tourist industry expressed the greatest concern about negative economic impact, with three out of four hoteliers perceiving that the push for independence was hurting their business.

The tourist sector accounts for 11 percent of Spain's and 12 percent of Catalonia's GDP. El Pais noted that Catalonia was the principal destination for international tourists to Spain in 2016, with some 17.4 million visitors traveling to the northeast region. 

Words of warning from the economy minister

On Sunday, Spanish newspaper ABC published two interviews with the Spanish Minister of the Economy and conservative People's Party member Luis de Guindos, who painted a positive picture of Spain's overall economic progress so far this year and predicted that GDP growth could top 3.2 percent.

The International Monetary Fund has forecast that Spanish GDP will increase by 2.6 percent in 2017.

Luis De Guindos Spain's Economy Minister
Economy Minister Guindos has warned of dire economic consequences to Catalonia if it splits from SpainImage: Eric Piermont/AFP/Getty Images

However, Guindos took a much harsher tone when asked about the future consequences of the Catalan independence movement and the referendum scheduled for October 1, which the central government opposes. Madrid's Constitutional Court considers the proposed referendum a violation of national law.

"There will not be a referendum," Guindos said, describing secession as both "illegal" and "irrational" before warning of the predicted damage from a nation cleaved in two. "We in the Ministry of the Economy have analyzed the impact of secession and it is estimated to cause a 25 to 30 percent increase in poverty in Catalonia and a doubling of unemployment."

Madrid announced last week thatit would cut public funds to Catalonia if the region used state monies to prepare for the referendum.

The latest poll published by Catalonia's regional goverment shows some 49 percent of Catalans would like to remain united with Spain while about 41 percent favor a split.