'Potentially Disastrous' Business Chiefs Warn Against Catalan Secession
CEOs and bankers are warning that the Spanish region of Catalonia could wreck its economy if it decided to declare independence from Spain. But regional president Artur Mas, who favors secession and wants to hold a referendum on it, is expected to be re-elected in a vote on November 25.
Two weeks before the Spanish region of Catalonia holds an election, business leaders are warning against a secession from Spain, which is favored by the region's president, Artur Mas, the head of the nationalist party, Convergence and Union (CiU).
Opinion polls show Mas might get an absolute majority in the November 25 election. He wants to hold a referendum on independence from Spain, even though the Spanish government has said such a vote would be against the constitution.
Catalans argue that they are unfairly treated by the central government and could better manage their finances on their own. Mas called an early election after his demands for more fiscal autonomy were rejected by the central government in September.
But Catalonia's business elite fears a secession would lead to major losses. Some economists have caluculated that independence could cut the region's GDP by as much as nine percent, even if the new state were allowed to remain in the EU and in the euro zone. But the EU Commission has warned that wouldn't be possible.
The head of Spain's biggest publishing company has already said the company would move its headquarters away from Barcelona if Catalonia seceded. International investment banks like JP Morgan and UBS have said Catalonia would face a "potentially disastrous" future if it leaves Spain.
Spain's King Juan Carlos has expressed fear that independence would not only split up the country, but would also lessen Spain's attractiveness to investors. He recently invited business leaders for talks to assess the level of support for Catalan independence.
According to a recent opinion poll, some 57 of Catalans would vote for independence in a referendum -- but only 40 percent would back it if the move entailed having to leave the EU.
The November 25 election is an extra problem for Spanish Prime Minister Mariano Rajoy who is trying to convince financial markets that Spain can bring its budget and economy under control in the euro crisis.
Independence calls have been fuelled by cuts that Spain's 17 autonomous regions have been forced to make in education and healthcare, the two main areas they have control over.