The to Spain. [G3] According to debating Europe, “Catalonia

The movement of Catalonia independence is largely politically motivated. In my view, the three most convincing arguments against Catalonia becoming an independent nation from Spain are:

1.       Membership of the European Union and NATO:G1  An independent Catalonia could find it extremely difficult to become a member of EU and access to the single marketG2 , as Spain has the right to veto its entry. Because of this, this fiscal imbalance would continue to grow for the next decade. It is also unclear if independent Catalonia would be allowed to enter NATO, as the USA has not taken a firm stance if they are supporting the Catalonia movement, often alluding this matter is internal to Spain. G3 According to debating Europe, “Catalonia receives billions from EU structural funds, and the regional government is in debt to the tune of EUR 42 billion. An independent Catalonia might need a bail-out from the European Union.G4 “G5 G6 

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2.       Global Trade & Business Uncertainty:  More than 50% of Catalan exports go to the rest of Spain as cited in the Wilson.cat. These exports constitute more than 30% of Catalan GDP. There could be a significant shock to GDP in the short term as finding a new trading partner and signing a deal could be a multi-year process.G7  According to ING, there would be a fall in consumption and disposable income, resulting in poor living standards compared to what the region has seen in the past. EU accounted for 65% of exports and 70% of foreign investment in Catalonia over the last three years,” as per Minne, citing the chart 1 below.G8 

Several multi-national businesses and banks have already announced that they are planning to relocate to different regions in Spain. It could mean a delay in investments or directed to other regions G9 in the EU. They are bound to maintain an office in the EU region. If the Spanish region of Catalonia separates from Spain, it would plunge the region into a long period of uncertainty, according to the Dutch bank ING. “The uncertainty would be negative for the private sector”, the ING economist Geoffrey Minne wrote in a note titled “Catalonia: the cost of being single.”

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