The bad blood between Catalonia and the rest of Spain goes back centuries. The Catalans lost their sovereignty in the early 1700s. In the 20th century, they suffered under Spanish dictator Francisco Franco.
But these days, the old rivalry plays out symbolically on the soccer field. At a bar near Barcelona’s main stadium, fans look up at a TV and cheer as they watch Catalonia’s FC Barcelona take on Madrid. Outside, Maria Lomascolo sells Catalan flags. She says for many Catalans, FC Barcelona is more than just a team. It represents Catalonia’s aspirations for independence.
“Playing against Madrid is like playing against the government of Madrid,” she says. “So it’s very heavy. Here it’s very important for Catalan people.”
What’s re-ignited these separatist feelings? In a word: Money. Catalonia is one of the country’s most prosperous regions. Every year, it sends about $20 billion in taxes — roughly 8 percent of its GDP — to Spain’s central government in Madrid. From there, the money’s redistributed to poorer parts of Spain, like the South.
Jaume Ventura of the Center for Research in International Economics in Barcelona says many Catalans feel cheated. “For every dollar that a Catalan spends on taxes, 43 cents do not come back,” he says. “Now that’s quite a bit of money.”
Money Catalonia wants to keep so it can solve its own problems. The Catalan government is over $50 billion in debt. It’s struggling with the same budget short falls as the rest of Spain. And this year, it took a $6.5 billion bailout from Madrid. But Spain’s central government doesn’t want one of the country’s wealthiest regions just setting off on its own. It says a referendum for independence is unconstitutional. Members of the Spanish military have even threatened to intervene.
Javier Díaz Giménez of the IESE Business School in Madrid says this is going to be bad divorce.
“So there’s going to be bad feelings generated on both sides,” he says. “And clearly the economic costs of this whole thing are large.”
For starters, Spaniards could retaliate by boycotting Catalan companies and goods — a blow to Catalonia’s economy. Second, no one really knows whether an independent Catalonia would still be a part of the European Union that uses the euro. And, Giménez says, nationhood doesn’t come cheap.
“You need to hire a bunch of border police. You need an army, embassies all over the world,” says Díaz Giménez. “Man, we’re talking a lot of money.”
However, that price tag doesn’t dissuade separatists like Jordi Manyà of the National Assembly of Catalonia.
“A new nation, a new country is expensive,” says Manyà. “But it’s a lower cost than the one we pay to continue being Spanish.”
In a break-up, he says, Catalonia would pay its fair share of Spain’s mounting public debt. But he says it also deserves to keep many of the government buildings and other assets it’s already paid for. In fact, Manyà believes Spain relies too much on Catalans. He says Spaniards will ultimately be better off without them.
“I think without our money, they probably have to be more conscious that they have to work to get money.”
Of course, Catalan independence is about more than just money. The region has a distinct language and culture. That’s proudly on display at the bar where soccer fans watch their favorite team draped in Catalan flags. But supporters of independence face a long, hard battle with the rest of Spain. A soccer game may not tell you much about politics, but in the match between Barcelona and Madrid, neither side was winner.
Marketplace is on a mission.
We believe Main Street matters as much as Wall Street, economic news is made relevant and real through human stories, and a touch of humor helps enliven topics you might typically find…well, dull.
Through the signature style that only Marketplace can deliver, we’re on a mission to raise the economic intelligence of the country—but we don’t do it alone. We count on listeners and readers like you to keep this public service free and accessible to all. Will you become a partner in our mission today?