A US economist who along with his wife recently attended a press conference held by Germany’s Finance Minister Wolfgang Schäuble reports that halfway through the event the woman turned to him in a moment of enlightenment and whispered: “They’ll probably hand us a whip on the way out so that we can flagellate ourselves.”
Crises, like any other major historical event, are open to interpretation, and dependent on a nation’s perspective. From Germany’s point of view, the current depression in Europe is a moral tale based on the belief that the mess we’re in is in large part due to the irresponsibility of the continent’s southern inhabitants, sinners who must now pay for their profligacy. Seen through this distorted prism, there are fewer and fewer means by which to support those nations and voters in the north of Europe are losing patience, while in the south there is mounting anti-German and anti-EU feeling, which explains the rise of extremist parties; those genies which once out of the bottle are so hard to get back in. Spain is a kind of microcosm of the euro crisis: there are some strange parallels with that vision in the latest spat between the central government and Catalonia. The genie — in this case how to hold Spain’s regions together in a single nation — has popped out of the bottle and is threatening to cause untold mischief.
Brussels says that the direct causes of Catalonia’s economic problems are the depression caused by the collapse of a decade-long property bubble, along with the efforts of successive governments over a longer period, rather than the separatists’ explanation that all ills stem from an unfair tax system. Little wonder that the EU is puzzled, if not to say worried, by this unwelcome distraction which could hardly come at a worse time.
Catalonia is not Germany. For one thing, the region is suffering the effects of the depression along with the rest of Spain. But there is some truth to the comparison with Germany in that as a wealthy region it is trying to shirk its responsibilities, suggesting, in the words of Josep Duran i Lleida of the right-of-center nationalist grouping CiU that its contribution is being spent “in the local pub,” or, as German Chancellor Angela Merkel out it: “building roads and airports that don’t go anywhere.”
Brussels is concerned that other regions in the EU could follow Catalonia’s lead”
Brussels is watching the unfolding spat between Barcelona and Madrid with growing concern. “Catalonia is a further cause for concern. Spain has enough problems already, and now it turns out that one of its wealthiest regions has to ask for a bailout from the central government (which can only make one wonder about the state of the country’s other regions), while at the same time threatening to go independent, and proposing what it wrongly calls a ‘fiscal pact’ that essentially means contributing less money now that there are doubts over the health of the country’s public finances,” sums up one Brussels-based diplomat.
Artur Mas, Catalonia’s premier, has been to Brussels on a number of occasions hoping to garner support for his proposals to change Spain’s financing system, along with recognition that Catalonia is committed to austerity and cost cutting, while not missing the opportunity to lobby for Catalan to be added to the EU’s list of official languages, even though the region’s own ambassador to Brussels, Joan Prat, does not support this. Mas has met with many of the key players in the EU, among them José Manuel Durão Barroso, the president of the European Commission, as well as with the president of the European Parliament, Martin Schultz. But sources in the Belgian capital, some of whom were at these meetings, say that Mas has never made so much as a passing reference to Catalonia’s aspirations to become an independent nation.
“We’re not going to back down on the question of who we are: we believe in more Catalonia and more Europe,” Mas told reporters during one of his trips to Belgium, prompting the question as to whether this meant less Spain. “No, we are positive. We don’t rule anything out,” he replied. Which is why Brussels is so unpleasantly surprised by the events of the last week.
“Some of Catalonia’s demands are viewed with a certain sympathy. But they are close to crossing a dangerous line. Their hopes for improving the financing deal are understandable, but not even in Germany, which has a federal fiscal system that could be a model for Spain, would there be acceptance of crossing the line that leads to independence: Brussels is concerned that other regions in the EU could follow Catalonia’s lead,” says a senior official in Brussels.
An independent Catalonia would certainly create a number of legal problems, if Article 4.2 of the Treaty of Union is anything to go by. Furthermore, although the decision-making process within the EU is increasingly being narrowed down to qualified majorities, in the case of new members joining, unanimity is required. Barroso has made clear that he foresees no change to current EU legislation. On the one hand, this is an “internal” question for Spain to sort out. On the other, in the event that Catalonia did become independent, “a solution would have to be found within international law.”
The government has tried to convince the electorate that Spain’s deficit is largely due to overspending by the regions. This is not true. It has threatened to take away some of the decision-making over spending devolved to the regions over the last 30 or so years, blaming the austerity measures imposed by Brussels. This has prompted an angry response in Catalonia. And once again, the parallels with the EU are striking. The troika sends its men in black to Madrid at the same time as Madrid sends its men in black to regions like Catalonia who are asking for financial help. Madrid is avoiding referring directly to the need for a bailout, preferring to talk in terms of credit lines; Artur Mas demands that any help from Madrid come with no strings attached. Wolfgang Münchau, the head of the Brussels-based Eurointelligence think-tank, says that the current political spectacle “would be funny if it weren’t related to Spain’s serious crisis and the consequences of this for ordinary people.”