The Economy of Catalonia

the consequences for our financial institutions of finding themselves outside
the euro. But even if Catalonia were not left out of the euro, we
would need to study very carefully whether, should the Spanish financial
market become fragmented, an independent Catalonia could maintain
its current financial weight, in terms of both the market and «capitality»
(that is, centres of decision). Nor can we afford to overlook, in this context,
the fact that the two leading financial institutions have assets (basically
invested in the whole of Spain) which are greater (and in one case,
far greater) than Catalonia’s GDP, and that the deposits they raise elsewhere
in Spain exceed those raised in Catalonia. This means that the
Catalan financial system would be highly vulnerable, and the fragmentation
of the Spanish financial market would make it hard for Catalonia’s
current financial weight to be sustained.
c) The distribution of assets and liabilities
The allocation of a portion of Spain’s assets and liabilities to a new Catalan
State would depend largely on the nature of the process leading up to its
hypothetical independence. As we will point out in the final section, a
friendly secession (or one that has at least been agreed upon in a civilised
fashion) is not the same as a traumatic separation. This is especially true in
a matter such as this, which can be settled only by negotiation, with each
party not unnaturally defending what suits it best, or through arbitration
by international institutions. On this issue, unlike the majority of other
points we address, there is little room for analysis or recommendations,
for once this stage is reached, the discussion will be basically a game of
interests. And any argument in one direction could always be matched by
an argument in the opposite direction. What can be done is to examine
the experience derived from other cases (rather few and far between) and
mark out the playing field.
The first major point to be dealt with is Spain’s debt, which raises two
important questions. One is how to decide the scope of the debt. Some
authors, for instance, have suggested considering Bank of Spain’s net position
in the ECB, which is clearly one of indebtedness, since the Bank
of Spain has borrowed from the European Central Bank as a result of the
compensatory mechanisms arising from the TARGET2 system. The
other question is which variable should be used to estimate Catalonia’s
share. The one that immediately springs to mind is population, but some
two preliminary remarks... 47