Catalonia’s Independence Referendum: What’s at Stake?

The consequences of this referendum are anybody’s guess. Five years ago, Spain was in a deep financial crisis, and politicians in Madrid and Barcelona were bickering more about money and Catalonia’s tax contributions to poorer regions than they were about sovereignty.

Still, the separatist Catalan leadership says it would not return to a negotiating table to discuss finances alone. And any reversal on independence could break up the region’s fragile governing coalition, which relies on the support of a small far-left party.

The political situation in Madrid is also far more complicated today than it was at the time of the last independence vote. In 2014, Mr. Rajoy’s Popular Party had a parliamentary majority and his political survival wasn’t at stake. Since late 2016, he has been at the helm of a minority government. A deepening territorial crisis could prompt opposition parties to push for his removal.

The most pressing challenge, however, could come from the streets of Barcelona. It’s unclear how Catalans might react if Madrid were to order a further clampdown. Since 2012, people backing independence have held peaceful demonstrations in Barcelona that have been among some of the largest ever in Europe. But tensions are reaching a boiling point, and Madrid recently sent thousands more police officers to Catalonia ahead of the vote.

Would Catalonia prosper on its own?

An independent Catalonia would be a midsize European nation, with Barcelona, one of Europe’s most cosmopolitan cities, as its capital. Economists disagree over whether withdrawal would hurt the region significantly, or would instead weaken the rest of Spain. But they agree that there would be a short-term economic cost as the two sides adjusted to a new political and territorial reality.

Much would depend on the financial and political terms under which Catalonia left, including how Spain’s debt burden would be split and whether Madrid would impose economic sanctions on Catalonia for withdrawing unilaterally. At previous times of tension, Spanish consumers have boycotted Catalan consumer goods like cava, the region’s sparkling wine.

And then there is the big question of whether Catalonia would be allowed to become a member state of the European Union and could continue to use the euro. (That issue is complicated by the fact that the most radical Catalan separatist party wants nothing to do with Europe’s common currency.)

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