The Economy of Catalonia

elationship with the rest of Spain has operated under an implicit contract
whereby the profits made from the Spanish domestic market (a more or
less contingent market) by Catalonia had to be partly returned to the Spanish
State in exchange. We believe this status quo is a thing of the past.
Alongside this, the devolution process, involving a considerable transfer
of powers from the Spanish central government to the Government of
Catalonia, the Generalitat, in recent decades (basically from a demand
point of view, in the areas of policing, justice, health, education and so
on), has not been accompanied by a similar transfer in fiscal terms to meet
the cost of running the functions transferred. This has contributed above
all to the gradual increase in the indebtedness on the Generalitat’s finances.
The beginning of the global financial crisis (2007-2008) and the subsequent
fall in public revenue made this deficit in the transfer of resources
from the State to the Generalitat even clearer. All this is illustrated by two
figures: the infrastructure deficit of 5.5% over the period 2007-2012 (taking
this as the difference between central government spending on infrastructure
in Catalonia and total spending in Spain given the proportion of
Spanish GDP accounted for by Catalan GDP) and the fiscal deficit, has remained
at about 8% over the last fifteen years.
To sum up, we therefore consider that, after repeated failures, the “compensation”
mentioned above represents a phase which is now over. For
this reason, we believe it is now particularly pertinent to highlight various
features, all of them critical, in which the Catalan economy clearly
shows a markedly European and international positioning. The different
economic features discussed below - industrial fabric, exports, capacity
for innovation, tourism and attractiveness to investment - are, as well as
foundations of the Catalan economy, elements with which to leverage
higher economic growth in a hypothetical Catalan State which is fully
integrated into the international economy.
Competitiveness factors and the international
positioning of Catalonia
The Catalan economy in context
Catalonia is small, with a land area accounting for less than 1% of the
EU-28.This places it on a similar level to that of the cooler States of the
14 The Economy of Catalonia