the euro zone

Losing touch

This week saw Mariano Rajoy issue his latest warning to the increasingly aggressive separatists in Catalonia. On Wednesday, he asked the regional government – headed by the fervent secessionist Carles Puigdemont – to act with “common sense” and to “isolate the extremists and radicals who are influencing the [independence movement]”.

The Spanish prime minister’s most recent request for moderation among separatists in the north-easterly region of Spain comes amidst heightened concern that secession would damage the Spanish and Catalonian economies. Yet it is unlikely that Puigdemont will pay any heed to either Rajoy or a worried business community: indeed, he seems determined to win independence from Madrid at almost any cost, both economically and politically speaking.

This is odd, given that his support in Catalonia seems to be waning. According to the latest poll by INE, Spain’s national statistics institute, general support within the region for independence is at 35%, down from a peak of 49% in 2013, when Spain was at the height of its financial crisis. In fact, ever since then, as Spain’s GDP started to expand and unemployment started to fall, support for independence has been decreasing in Catalonia. This suggests that moderate supporters of secession don’t want to risk derailing Spain’s return to macroeconomic health.

The Catalonian president’s bullish tactics in pushing the independence movement forward suggest he is not bothered by this poll, nor with one conducted by Deloitte a couple of weeks ago for the Spanish daily El País. This survey revealed that 75% of Spanish business executives think that the Spanish economy will be damaged if Catalonia splits from Spain. That figure rose to 100% among executives working in tourism, an industry that is crucial to Puigedemont’s region: last year, Catalonia received 17.4 million visitors, making it the principal destination in Spain for foreign tourists.

Of course, the issue of whether Catalonia should be allowed to split from Spain involves much more than economic considerations. For many Spaniards outside of Catalonia, the issue provokes viscerally negative reactions. A usually-serene Andalusian friend of mine erupted when I asked her about Catalonian secession recently: “What they are doing is crazy, selfish and disrespectful. They are showing no concern for Spain”, she said. Such an attitude is common among Spaniards outside of Catalonia.

Yet Puigdemont ploughs on regardless, and has vowed to hold a controversial independence referendum on 1 October. The Catalonian president says it is wrong to assume the returning strength of the Spanish economy will deter die-hard separatists such as himself. Of course, much legal uncertainty surrounds the questions of whether the vote will go ahead and, even if it does, whether it will have any validity (Rajoy says it won’t); but as it approaches, its orchestrator appears to worryingly out of touch with reality.