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As Spain sinks, many in Catalonia want out
Posted 9/27/2012 12:26 PM ET

BARCELONA, Spain -- This historic region on the Mediterranean -- a center of European industrial design and tourism -- has special status as an autonomous district of Spain known as Catalonia.

And as financial problems mount for Spain, many here want to get a whole lot more autonomous.

Spain is entering its second recession in four years and some Catalans say they are getting little for the river of tax revenue they send to Madrid annually. The solution they say is an independent nation.

"Financially speaking, Catalonia is perfect for Spain," said Osvald Calzada, 32, a copywriter from Lleida, in the western part of the region. "Catalonia is the cow they constantly milk, only giving her enough grass to survive."

On Thursday, the Catalan parliament voted in favor of holding a referendum on independence after November elections whether allowed by the Spanish government or not (under current law, only Madrid can call a legal referendum.)

Spain is taking secession talk seriously in the current financial climate. Even King Juan Carlos, who last spoke publicly on politics during a coup attempt in 1981, appealed for restraint.

"In these circumstances, the worst thing we can do is divide our forces, encourage dissent, chase chimeras and deepen wounds," he said.

The increasing demands for independence in Catalonia are the latest consequence of the European debt crisis, analysts say. As budget deficits grow, governments have slashed spending on education, health services and public sector workers. More austerity measures were announced Thursday in Spain.

Catalonia, which encompasses four provinces, has not escaped the curtailment of public services and jobs. But many here say it is unfair given that 7.5 million Catalans pay $15 billion to $20 billion more in taxes annually than they get back from Madrid in social services or infrastructure.

Despite its economic vitality, Catalonia is currently Spain's most indebted region. Recently the government here asked Madrid for $6.2 billion in financial assistance, but not in a loan. The government wanted the money free and clear, saying it belongs to Catalans and was wasted by the Spanish government.

"There is no other territory in the world suffering such fiscal plundering," said Marc Guerrero, professor of international finance at European University in Barcelona. "If we could collect and keep all taxes, this wouldn't have happened and the standard of living of Catalans would be much higher."

Anger was on display for all to see on Sept. 11, Catalonia's National Day, when an estimated 1.5 million people filled the streets bearing signs that said, "Catalonia, the next independent state in Europe," and "We want a divorce because we are not happy in this marriage."

People sang the Catalan national anthem and marched through the city in one of the largest demonstrations in the history of Spain. A recent media poll showed that 51% of Catalans would vote in favor of separating from Spain, the highest percentage ever marked on a survey.

Analysts say that the younger generation doesn't feel the ghost of Spain's former military dictatorship of Francisco Franco â?? when any form of separatism was persecuted â?? and have been taught in school about the oppression suffered under the Spaniards for more than three centuries of Catalonia's 1,000 years of existence.

An unemployment rate in the region of almost 22% is also fueling rhetoric from pro-independence parties.

In its latest response to the debt crisis, Spain approved a budget Thursday that froze public sector wages for the third year in a row, cut government spending by 12% and imposed a new 20% tax on winnings from lotteries above $3,230. Spain was also expected to raise the retirement age from 65 to 67.

If Catalonia were to leave, Spain would lose an economic engine that makes up 20% of the national economy and has one of the most important commercial harbors in the Mediterranean.Mikel Buesa, an economics professor at Madrid's Complutense University, thinks both Catalonia and Spain would suffer with the split.

"Surrounding Catalonia with borders would bring its GDP down by 30%, Spaniards would boycott Catalan products (like in 2006), and many companies would leave the territory, possibly to settle in Spain," Buesa said.

Others disagree.

"Catalonia doesn't need Spain," Guerrero said. "Last year we already exported more to foreign countries than to Spain, and Catalonia alone exported 25% of the total Spanish exports."

The European Union has already warned Catalans that if they leave Spain they will have to seek readmission to the bloc, a process that, according to Buesa, could take years with all EU members unanimously required to approve the candidacy â?? including Spain.

That has left the leader of Catalonia, Artur Mas, in a tricky position. While seeing his region leave Spain is not his top choice, the Spanish government is refusing to negotiate while pro-independence sentiment at home rises.

"With all its refusals, Spain is showing us the way out the door," Calzada said. "It won't be easy, but I am convinced that we will stay afloat, just like we always have."

Posted 9/27/2012 12:26 PM ET
Protesters stand in front of riot policemen during a demonstration Tuesday in Madrid.
Dominique Faget, AFP/Getty Images
Protesters stand in front of riot policemen during a demonstration Tuesday in Madrid.