Views expressed here are the views of the national delegation and do not always reflect the views of the Group as a whole

Catalonian independence is a threat and has economic consequences for the Eurozone

18.10.2017 - 12:15
Catalonia Spain and Europe flags

What happened in the past?

Catalonia is starting to feel the “Montreal Effect” when business, companies, banks and corporations left Montreal because of the threat of the independence of Quebec.

When the first referendum in Quebec in 1980, more than 700 companies left Montreal. They’ve never come back.7 out of 8 Quebec’s banks also left the province[i].

After the second referendum in 1990, Montreal lost the 21.9% of the Canada’s top companies[ii].

And what’s happening in Catalonia now

Six out of seven Catalan companies listed on the Ibex 35 (Spain's principal stock exchange) are moving their headquarters to other cities due to the secessionist challenge[iii].

Started with the region’s two largest banks, Sabadell and CaixaBank. People close to both banks said the decision was motivated by the need to provide certainty that they would remain within the EU. Both banks have lost €9.000 million in deposits and saving accounts[iv].

Most of the financial companies which are leaving Catalonia are stressing that they are adopting these decisions in order to protect the interests of our customers, shareholders and employees, under the supervision of the European Central Bank and the regulations of the European Banking Authority.[v]

Until today, more than 700 enterprises have left Catalonia[vi]. According to the Association of Property and Mercantile Registrars, around 150 companies are leaving Catalonia every day[vii]. In other words, 20 companies per hour in working time.

The creation of mercantile societies in Catalonia falls 26%, while it rises 14% in Madrid.[viii]

Tourism business is also suffering. Tourist reservations have fallen 50%, with a foreseen impact of €1.800 million[ix] in Catalan economy.The Chairman of the Association of Property and Mercantile Registrars of Catalonia has said[x]:  "Financial institutions were the first to leave, then the energy companies and the most emblematic ones, and now it is the small and medium enterprises (SMEs) that are moving their headquarters away”.

Catalonia, a threat to the European Union and the Eurozone

The Catalan nationalists’ push for independence risks opening a Pandora’s box. Other European separatist and autonomist movements will take heart from the insurrectionary mood of Catalonia. In fact, Catalonia is being the battleground for the new national-populist movements.

Spain’s Finance Minister has announced that government will change its growth forecast for 2018, now set at 2.6%. It will be slightly reduced in the draft budgets as a result of the Catalan crisis. If political tensions keep going on, Catalonia can go into recession while the rest of Spain keeps growing.

Spain is the fastest growing economy and the one which is creating more jobs within the Eurozone at a faster speed. Without Catalonia, Spain will continue to be the fourth largest economy in the Eurozone, after Germany, France and Italy. However, if the Catalan crisis becomes chronic, that will mean a weaker Spain and, therefore, a weaker and more unstable Eurozone. And citizens will be again the ones to pay for the crisis.

Besides, a hypothetical secession of Catalonia would mean a reduction of the real Catalan GDP between 25% and 35% and the unemployment rate increasing up to 35% or 40% of the active population. The inflation rate would rise to approximately 20% or 30%

The region would not be able keep the single currency. The exit from the euro and from the European Union is automatic.

They would have to introduce a new currency; serve a public debt in a foreign currency without access to bond markets; and have restricted access to the EU market. It would be unable to call upon the help of the European Stability Mechanism (ESM) and the European Central Bank (ECB), which were both central in bailing out Greece.

Examples of companies leaving Catalonia and or cancelling investments

CORDORNIU, one of the most iconic companies of Catalonia, founded in 1551 (probably Spain’s oldest company) and almost 900 employees has decided this Monday to move its corporate address to another region.

GRUPO PLANETA, Spain’s leading publishing and media group and now multinational enterprise founded in Barcelona in 1949, has decided to move its corporate address to Madrid last October 11, just immediately after Puigdemont’s independence speech.

GRUPO CATALANA OCCIDENTE: One of the leaders in the Spanish insurance sector and in global credit insurance. Founded more than 150 years ago. With 19.000 insurance brokers, 1.600 branches, 7.000 employees, 4 million customers and presence in more than 50 countries, decided last Tuesday to change its corporate address to Madrid.

SABADELL: is Spain’s fourth largest private banking group and the second one in Catalonia. Founded in 1881 in Barcelona. With € 217.457,8 million of total assets, € 450, 6 million of net profit, 2.800 branches, 26.384 employees and 11 million customer only in Spain, the bank has decided to move its headquarter to Alicante.

CAIXABANK: CaixaBank is the leading retail banking entity in Spain and one of the main IBEX 35 companies. The bank has € 347, 927 million in total assets, 15.8 million customers in the Iberian market, 5,468 branches, the main commercial network in the Iberian Peninsula and more of 37,000 employees. On October 6, the Board of Directors, “in light of the current situation in Catalonia” approved the move of its registered office to Valencia.

AXA EXPAÑA: The Board of Directors of AXA Spain decided on October 11 to move its headquarters from Barcelona to Bilbao, in order to guarantee legal certainty and to protect customers’ interests.

ABERTIS: Abertis is the international market leader in the management of toll roads, managing over 8,600 kilometres in 14 countries in Europe, the Americas and Asia. It is the first national operator of toll roads in countries Spain and also has a significant presence in France and Italy. In a press release on October 9, the company stressed that due to the legal uncertainty created by the current political situation in Catalonia, they change the registered address Madrid[xi].

GAS NATURAL FENOSA: Pioneer in gas and electricity integration, Gas Natural is a multinational group which is currently present in more than 30 countries and 22 million customers on the five continents. It begin its work in Barcelona in 1843. Actually it has around 20.000 employees. On October 6, the company informed it had changed its registered address to Madrid.














Zimbabweans Await Election Results Following General Election
01.08.2018 - 15:12

Zimbabwe elections: unlevel playing field and lack of trust

Improved political climate, inclusive participation rights and a peaceful vote, but unlevel playing field, intimidation of voters and lack of trust...
16.07.2018 - 18:15


The summer holidays have started! Which EU country are you going to visit this summer? Did you know that your holidays may be less hassle...
Ensuring that consumers have the same quality of product across the EU
12.07.2018 - 12:00

Ensuring that consumers have the same quality of product across the EU

Last year, it emerged that there were differences in the quality of food and non-food products being sold in different EU countries between, for...
Back lit money bags with euro symbol in vault
12.07.2018 - 10:37

EPP Group wants independent Monetary Fund under Union law

The EPP Group wants the planned European Monetary Fund (EMF) to be independent and integrated into Union law. "The European Stability...

Highlights of the week

09.07.2018 - 13.07.2018
Cloud computing security

More muscle to combat threats to our networks

As threats to our vital networks and information structures are rising, we need to strengthen our ability to prevent, detect and respond to problems...
Happy family with child and shopping bags in city

Better work-life balance for parents and carers

On Wednesday afternoon, the Employment and Social Affairs Committee will vote on the legislative draft Report establishing a better work-life balance...
Human Hand Holding The New Apple Tv Siri Remote

New audiovisual media rules

Members of the Culture and Education Committee will endorse the political agreement reached on the reform of the EU legislation on Audiovisual Media...