- Support for independence fell from 49% in 2017 to 41%
- About 3,000 businesses moved after the referendum
- Madrid overtakes Catalonia as the region with the highest GDP
- The separatist government of Catalonia promotes dialogue
BARCELONA, Oct 27 (Reuters) – Five years after Catalonia’s bid to dissociate itself from Spain sent shockwaves across Europe, the independence movement is grappling with internal divisions, public support declining and the economic fallout from an exodus of businesses.
Catalonia lost its status as Spain’s leading economic power to Madrid after thousands of companies moved their headquarters out of the region, fearing the 2017 secession campaign would leave Catalonia outside the union European Union and its protections.
Support for independence has fallen from 49% at the time of the referendum to 41%, while the regional government coalition of parties that support separation is in crisis amid differences over how to take the movement forward.
The fallout serves as a cautionary tale for the independence movement in Scotland, which is pushing to hold another referendum next year on breaking away from the UK.
While the Catalan separatists do not regret their attempt at secession, they have learned lessons from it, including the “need for more support within our society and more international recognition”, said Oriol Junqueras, president of the party in the regional power Esquerra Republicana de Catalunya (ERC).
Junqueras was Catalonia’s deputy head of government when the region held an independence referendum that was banned by a Spanish court. Footage of riot police storming polling stations has been broadcast around the world as the prospect of a disorderly breakout looms.
Catalonia issued a short-lived declaration of independence on October 27, 2017. The movement died out after the Spanish government imposed direct control over the autonomous region.
Nine separatist leaders were sentenced to lengthy prison terms, with Junqueras given the longest of 13 years for sedition. They were all pardoned in 2021.
Around 3,000 companies moved their headquarters out of Catalonia in the six months following the referendum, according to consultancy Informa. Among them were banks such as Caixabank and Sabadell, utility company Naturgy and telecommunications provider Cellnex.
Many have retained executive offices in the region, but the legal ruling means some taxes are paid in rival regions such as Valencia and Madrid, Catalonia hosts fewer business events and foreign businesses have opted for less risky locations .
Around 30,000 jobs were not created in Catalonia between the third quarter of 2017 and 2019 due to political and security problems, according to the BBVA bank.
The corporate moves “have been very detrimental to the Catalan economy and the situation has not been restored,” said Guillem Lopez Casasnovas, professor of economics at Pompeu Fabra University in Barcelona and a former board member. administration of the Bank of Spain.
The Barcelona-based water group Aigües de Barcelona is the only major known company to have returned.
A spokesman for Caixabank, Spain’s biggest domestic lender, said its decision to move its headquarters to Valencia was permanent.
The possibility of a return to Catalonia “is not on the table”, a Sabadell spokesperson said.
The Caixabank Foundation, which in 2017 said the move from its registered headquarters was “temporary” but has not returned, declined to comment, as did Naturgy and Cellnex.
Catalonia must send “unequivocal signals” that legal certainty is guaranteed to encourage companies to return, said Josep Sanchez Llibre, president of main Catalan business association Foment del Treball.
ADVANTAGES FOR MADRID
Madrid have been the main beneficiary of the turmoil.
The Spanish capital overtook Catalonia as the region with the highest GDP from 2017 to 2020. Foreign investment has slowed in Catalonia since 2017, while increasing in Madrid.
The Catalan government defends its economic record. Foreign affairs adviser Meritxell Serret, who was part of the 2017 government, said the company moves were mainly politically motivated and “did not have great economic effects”.
She highlighted lower unemployment in Madrid and the Spanish average and strong industrial and technological sectors.
Junqueras insisted that the Catalan separatist movement is still strong, pointing to the increase in the number of pro-independence lawmakers over the past decade.
He said the international community has recommended a more conciliatory approach, even if the movement’s hardliners disagree.
Like Scotland, Catalonia’s independence movement is now pushing for another referendum, this time with the approval of the Spanish government. But as with the UK government and Scotland’s bid, Spain has so far rejected the proposal.
“We are convinced that negotiation is the right tool to resolve political conflicts,” Junqueras said.
Reporting by Joan Faus; Additional reporting by Jesús Aguado and Belén Carreño in Madrid Editing by Charlie Devereux and Andrew Cawthorne
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