The Economy of Catalonia

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First of all, a brief consideration. In principle the right to self-determination includes the possibility of deciding on monetary arrangements that the economy of a Catalan sovereign State would have to adopt. Although the long-term prosperity of a country should be independent of the currency it uses (at least, so long as it adopts a reasonable monetary policy), the behaviour of the economy in the short term is heavily influenced by the interest rate, exchange rates and the availability of banking credit, variables that all depend on the monetary arrangements adopted by a country and on its monetary policy. Among these arrangements are the establishment of a new currency and the setting-up of its own monetary system. This is the option chosen by the vast majority of countries. However, in the case of Catalonia there seems to be a social consensus, also shared by parliamentary political forces, on the desire to keep the euro as our currency and not adopt a monetary policy of our own, delegating it instead to the Central Bank (ECB). The discussion of the pros and cons of this option is largely outside the scope of this article. Moreover, this discussion cannot be held in abstract terms, i.e., without considering the fact that Catalonia today belongs to the Eurozone, and the development and adoption of a monetary system by a country (whether it is new or not) always requires a complicated transition and potentially significant risks in the short term; such factors certainly limit the appeal of giving up the euro in the case of current-day Catalonia. So I shall take for granted that the ultimate goal is to keep Catalonia inside the current monetary regime, i.e., with the euro as its only official currency and its monetary policy delegated to the ECB. The problem then is: what options would an independent Catalonia have of achieving this? Of necessity the answer to this question depends on the scenario arising from the hypothetical process of the constitution of the State itself. Moreover, in shaping these scenarios, no-one can forget that Catalan citizens have belonged to the EU for more than a quarter of a century, and to the Eurozone since its commencement. So the circumstances of the admission process of Catalonia as a member State of the EU and the Eurozone are exceptional and hardly comparable to the cases of admission of non-members. These considerations lead me to distinguish between four possible scenarios, from most to least favourable. 84 The Economy of Catalonia
Analysis of possible scenarios Scenario No. 1: Full integration, simultaneous to the establishment of the State In this scenario, and in a situation not foreseen in the European Treaties, the EU would take the political decision of accepting Catalonia as a full member of the EU from the moment of its establishment as an independent State. 11 By extension, and given the remarkable nature (not planned, but not precluded, by the Treaties) of this internal enlargement, we would expect Catalonia to be automatically admitted as a member State of the Eurozone. In this scenario Catalonia would never stop being part of the EU or the Eurozone. For Catalan citizens and companies operating in Catalonia, as well as for foreigners (whether European or not) having economic relations with it, independence would have no visible effect on monetary matters: the euro would continue to be used as the official currency for payment and as the usual accounting unit when establishing prices and setting monetary obligations in all kinds of contracts. The only difference with the current situation in the monetary field would be the existence of a central bank for Catalonia, which we can call the Bank of Catalonia (BC). This body, independent of government, would take on the (limited) functions that the national central banks have in the Eurozone, that is, mainly, cooperation with the European Central Bank (ECB) in the implementation of monetary policy and in the supervisory tasks of the financial system, as well as the management of banking resolution processes. As a national central bank, the BC would be represented in the ECB’s Governing Council, the decision-making body for monetary policy in the Eurozone (which is expected to play an increasingly important role in financial supervision). Banks established in Catalonia, and meeting the requirements for becoming counterparties, would continue to enjoy access to ECB liquidity, although they would do so through the BC, instead of the Banco de España (BE). This change would not be important in practice, since the conditions of this fund- 11. This is the scenario recommended for Scotland in Graham Avery’s report on «The foreign policy implications of and for a separate Scotland», published as Document HC 643 by the UK Parliament. http://www.publications.parliament.uk/pa/ cm201213/cmselect/cmfaff/writev/643/m05.htm In or out of the euro 85
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The Economy of Catalonia Questions
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Oriol Amat, Núria Bosch, Antoni Ca
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Contents Preface to the English Edi
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Preface to the English edition This
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Preface (Translated by Jordi Vilano
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Introduction (Translated by Jordi V
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1 The position of an independent Ca
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United States such as Massachusetts
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2010, Catalonia was in 64th place o
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fact, this combination of factors a
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ilar population to Catalonia and sh
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ence in emerging markets, especiall
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fact, the high proportion of multin
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egion in volume of inward investmen
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mega-regions towards sustainability
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also be confronted with the paradox
Page 36 and 37: the reasons that are emerging for a
Page 38 and 39: This 47.1% signifies a considerable
Page 40 and 41: 2005 2006 2007 2008 2009 2010 Estim
Page 42 and 43: and there would be no need for cuts
Page 44 and 45: centage of freight between Spain an
Page 46 and 47: to prevent Spain’s point-blank re
Page 48 and 49: ) The effects on markets, especiall
Page 50 and 51: speak of the coefficient of central
Page 52 and 53: Bibliographical references Amat, O.
Page 54 and 55: Rodríguez Mora, J. V. (2012) «Por
Page 56 and 57: For the purposes of economic analys
Page 58 and 59: It should also be recalled that the
Page 60 and 61: The reasons for regional economic i
Page 62 and 63: their mind» about European integra
Page 64 and 65: the Copenhagen criteria, which esta
Page 66 and 67: in the European Economic Area, whic
Page 68 and 69: ing the status of member of the Uni
Page 71 and 72: 3.2. In or out of the European Unio
Page 73 and 74: were to veto the request, experts e
Page 75 and 76: In November 2012, Granell expressed
Page 77 and 78: -The regulatory fragmentation that
Page 79 and 80: would have to find alternative solu
Page 81 and 82: economic shocks, any one of which,
Page 83 and 84: In my opinion, an impartial reading
Page 85: 4 In or out of the euro 4.1. An ind
Page 89 and 90: official currency and financial ins
Page 91 and 92: nisms and the European interbank pa
Page 93 and 94: arising from the integration of a h
Page 95 and 96: 4.2. In or out ofthe euro: certaint
Page 97 and 98: prevent or limit damage to the mult
Page 99 and 100: Let me make a short comment on the
Page 101 and 102: context of a Spain that leaves the
Page 103: Col·lectiu Wilson (2012) «Europe,
Page 106 and 107: termediation, which is performed by
Page 108 and 109: The Catalan financial system The Ca
Page 110 and 111: Financial institutions with headqua
Page 112 and 113: • The bank was put up for auction
Page 114 and 115: had risen by 16.3%, staff had been
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Page 118 and 119: Appendix This article is complement
Page 120 and 121: The Catalan Public Sector in the Eu
Page 122 and 123: 20% 18% 18.8% 16% 16.2% 15.5% 13.6%
Page 124 and 125: 9% 8% 7.9% 7% 6.5% 6.4% 6.2% 5.8% 5
Page 126 and 127: It is very obvious that Madrid has
Page 128 and 129: Spain Catalonia Generalitat Variati
Page 130 and 131: - Armed Forces: in the form of army
Page 132 and 133: Pérez, F. (DIR), Cucarella, V. and
Page 134 and 135: and to the private sector. Another
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2006 2007 2008 2009 Direct taxes 17
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method, that is to say, the expense
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itory. The same applies to the prog
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2006 2007 2008 2009 Spanish State e
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e obtained. Table 3 shows that the
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with the EU in the period 2007-2013
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8 Debt and distribution of assets 2
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this study. The difference between
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the State’s property and debts on
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It may be asked whether the new Cat
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The main source of International La
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Principles of distribution of asset
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Immovable property of the State con
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Social Security Reserve Fund On con
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Investments according to Additional
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Forecasts Million euros 2007 2008 2
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Possible negotiation scenarios What
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Even if it were only possible to ev
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States that form part of 21st-centu
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Spanish Royal Decree 496/1987, of 1
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Social Security contributions, pens
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ury and its managing agencies (auto
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citizens tend to join the labour ma
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in the economic, social and cultura
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declaration of independence, the bo
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oycott would have a more pronounced
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the will of the people. The great m
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Guinjoan, M. and Cuadras, X. (2011)
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Denmark, Finland, Austria, the Neth
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2012 Company Sector Sales (€m) 1
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Export companies There were 43,176
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Spain, and appreciably more than th
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Conclusions After considering how c
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likely to be in the firing line are
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IDESCAT (2013), based on data from
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the sample represents 20.8% of its
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No opinion Increase the centralisat
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sioners, business people and/or the
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Impact on the Catalan economy In th
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alternative. This is not supported
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More specifically, 94.6% of pension
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37.8% 57.8% 4.4% Yes No opinion No
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fessionally and 47.8% believe it wo
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13 Conclusions: economic certaintie
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having less potential and less per
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Catalonia had been an independent S
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ands and a declining proportion of
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Anton Gasol. Doctor of Economics, f
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The Economy of Catalonia

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