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Going Ahead With Catalonia

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October 30, 2017

What is the issue?

  • The Spain government has temporarily put down the Catalan crisis by sacking Catalonia's government.
  • But the demand for independence is indicative of a larger concern and needs a well thought out response.

What is the recent move?

  • Spain's Prime Minister Mariano Rajoy has struck down the recent referendum on independence for Catalonia.
  • He has sacked Catalonia’s President and dismissed its parliament, after the Catalan Parliament declared itself an independent nation.
  • The government has also imposed a direct rule on the region.
  • It has also rescheduled the elections and has called for a snap election in the region.

Why is Catalonia significant for Spain?

  • Economy - Catalonia accounts for a quarter of Spanish exports.
  • It has been the second-largest recipient of foreign direct investment in the recent years.
  • It accounts for almost a fifth of Spain’s GDP, the fourth-highest among the country’s 17 regions.
  • The region also attracts more tourists than any other region in Spain (Between Barcelona and the famous Costa Del Sol).
  • If Catalonia breaks away, the Spanish GDP may possibly fall by a quarter.
  • Employment - Though debt-driven austerity in Spain has had its impact on Catalonia, its unemployment rate is still below the national average.
  • If Catalonia departs, Spain's unemployment could even double.
  • Besides, Catalonia is one of Spain’s more prosperous and culturally vibrant regions offering lot many opportunities.

What lies ahead?

  • The government may have curbed the secessionist impulses of Catalonia, but only temporarily.
  • The crisis has now reached a dangerous level as independence supporters have called for a campaign of disobedience.
  • Independence supporters claim that breaking away will be financially more secure as it will not have to pay taxes to Madrid.
  • The concerns in Catalonia are indicative of the demand for greater self-determination for regions worldwide.
  • Given this, heavy-handed approach to defuse tensions will only complicate the peace process.
  • E.g. Disallowing Carles Puigdemont, the Catalan President and his pro-independence colleagues from contesting the elections will only exacerbate the tensions.
  • All of this suggest the need for more constructive redistributive policies and sensible negotiations.

 

Source: Business Standard

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