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Catalonia declares intent to hold independence referendum

The unilateral law passed by Catalonia’s parliament today in effect embarks the Spanish region on a path to independence from Madrid.

Catalonia’s parliament Wednesday overwhelmingly passed a bill unilaterally claiming the region’s right to decide whether it seeks an independent state within the European Union, setting a 2014 timeframe to carry out a referendum on the issue.

The vote “to start a process” that would eventually culminate with a referendum was approved with 85 votes in the 135-member chamber, and 41 votes against. The bill defines the region of Catalonia, Spain’s economic motor, as a “political and legal sovereign entity” with the right to secede, if a majority of its 7.5 million citizens decide to do so through democratic means.

Representatives in the regional parliament of Spain’s ruling Popular Party voted against and immediately walked out the chamber to protest the approval. Five representatives of the Socialist Party also broke ranks with their bloc and refused to vote, instead of voting against. The chamber broke into a long applause after the bill’s passage.

The unilateral law passed by Catalonia’s parliament in effect embarks the region on a path to independence, albeit in a careful, peculiar way. While technically a move toward a clearly unconstitutional act – Spanish law doesn’t give regions the authority to call referendums that affect all Spaniards without the approval of the national parliament – the bill does not include reference to “independence” or “statehood.” As such, it doesn’t actually approve any unconstitutional decision, just the intention to make one by 2014.

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But it’s at the same time the most serious challenge to Spain’s territorial integrity in decades, because it disregards Spain’s Constitution or the authority of Spain’s parliament on the issue of self-determinism. It would be the equivalent of the Texan legislature declaring its intention to ask its citizens whether they want to remain a part of the United States, regardless of what Congress or the Supreme Court had to say about it.

“This doesn’t make much sense,” says Fermín Bouza, a sociologist and expert in public opinion in the Universidad Complutense de Madrid. “It’s a non-starter. Spain won’t budge an inch on its territorial integrity, and a referendum would expose” the impasse.

The vote “is unlikely to boost the momentum for holding a referendum. The declaration represents just another step in the coalition’s plan to gain more legitimacy for a vote,” wrote Antonio Barroso, European analyst of political risk consultancy Eurasia Group in a research note.

A nonstarter issue

Few believe Catalonia will become independent any time soon. The government of Prime Minister Mariano Rajoy has suggested it won’t yet confront the unilateral Catalonian declaration in the Constitutional Court, the country’s highest, but rather will wait for the smoking gun: when a referendum on independence is legally called.

In 2008, the Constitutional Court nullified a much less ambitious attempt for independence by the Basque parliament, which called for a referendum to ask Basques if they wanted the right to decide. The court said then that any referendum that would affect all Spaniards would have to be first approved by the national parliament, and that all would have to be asked, not just those in one region.

All major parties have said they would vote against approving a Catalonian referendum on the issue, and polls have consistently showed that the vast majority of Spaniards would vote against any region seceding. But Catalonia’s parliamentary vote today does open Pandora’s Box on the still unresolved issue of Spain’s federalism.

A calculated move?

Analysts say the Catalonian vote has more to do with internal Catalonian politics and with pending fiscal negotiations over how much Catalonia should contribute to the central government to subsidize much poorer regions in Spain.

Catalonia’s economy is the size of Portugal’s, but credit markets have long shut it out as its deficit increases. In 2012, the deficit was equal to 2.3 percent of its GDP, much higher than originally targeted. The central government has bailed out Catalonia several times, and regional austerity cuts have been more severe than in most other regions.

In November regional elections, Catalonia’s conservative CiU coalition, led by regional President Artur Mas, shed voter support despite its independence drive, and it was forced to seek an alliance with with ERC, the traditional left, pro-independence party. But the only issue uniting them is the referendum, and Mr. Mas’s government is fragile.

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“Mas is just trying to show public opinion [that] he leads a strong parliamentary coalition,” Dr. Bouza says. The show of strength could be useful as the Catalonian government continues to impose austerity to cut its deficit and return to growth.

Mas is also trying “to gain leverage in the upcoming negotiations on funding” for regions, according to Mr. Barroso of Eurasia Group. The government “seems to be willing to make concessions in order to give Catalonia a fairer fiscal deal.”

A new regional leadership in the Basque Country also wants to negotiate its fiscal pact with Madrid, as well as its ties to Spain. But any negotiations will inevitably involve all regions and require constitutional reforms, which implies a long process that the government will try to postpone, especially while it manages the grueling economic crisis.

Largely uncertain though is how far Mas will pursue the referendum and a confrontation with the central government. Spanish political and economic stability is already badly hurt from the economic crisis.

Rajoy will have to decide how to placate growing frustration in Catalonia and the Basque Country, while preserving political stability and improving the economy.

“It’s up to the state to build a more fair system. There has to be a negotiation to address Catalonian and Basque [fiscal] demands. You can’t just say nobody has a right to independence,” Bouza says.

And Catalonia’s parliamentary vote in effect presses the case. “This issue, forgotten by public opinion, is back in the back on the table, exposing the lack of flexibility of the state and the constitution to open up negotiations.”