The Economy of Catalonia

Therefore, it seems reasonable to estimate that the long-term impact (for
which «neutralisation» is appropriate) on Catalonia’s GDP (for which the
cash-flow approach is appropriate) of eliminating fiscal flows with the
rest of Spain might be between 7.0% and 8.5% of GDP. But it also seems
reasonable to calculate that the short-term impact (for which «neutralisation»
is not appropriate) on the reduction of the Catalan government’s
deficit (for which the benefit approach is appropriate) could be around
0.4% of GDP.
In short, this means that in the long term, we can assume that the positive
impact of the elimination of the fiscal deficit on public finances
(Catalan government deficit reduction) would be between 4.8% and
5.8% of GDP and the positive impact on Catalonia’s GDP would be between
7.0% and 8.5%. However, the short-term effect is smaller: around
0.4% in terms of public finances and 3.0% in terms of Catalonia’s GDP
growth (in all cases it would be a one-off effect).
4) Links with the EU and the Eurozone
A crucial issue in the debate about the viability of an independent Catalonia
is what would happen with regard to Catalonia’s links with the
European Union and the Eurozone. Here again political stances have a
great bearing on the interpretation of the treaties and regulations. According
to the opponents of secession, an independent Catalonia would
be automatically expelled from the EU and would find it very hard to
return. Conversely, those in favour of independence tend to minimise
the difficulties of staying inside (or of returning very quickly) and the
costs of non-membership.
The fact is that it would be very hard for Catalonia and the Catalan
economy to remain outside the EU and the Eurozone. Hence this is a
point that should be considered very carefully when making any decisions.
To start with we must distinguish between belonging to the Eurozone
and belonging to the Community’s single market because, in fact,
whether or not an independent Catalonia were formally a member of
the European Union, almost everyone would probably be interested in
maintaining the current conditions. There are numerous European companies
in Catalonia and very strong trade links, while a very high per-
two preliminary remarks... 41