Friday, October 19, 2018
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Carmen P. Flores

​The Catalonian political crisis and its effects on the economy

Editor of TEJ. Journalist

The Catalonian political crisis, compounded by the so-called referendum on October 1st, and the "proclamation" of the UDI, 26 days later in the Catalonian Parliament, has meant almost the final straw for the Catalonian business sector. The month of October will be remembered by all as a black October to forget.


Portada 7


The maximum representatives of the Catalonian government, Carles Puigdemont and Oriol Junqueras have not considered, or have not wanted to consider the effects that their actions were going to have on the Catalonian economy, despite the direct and indirect messages that diverse voices knowledgeable about the situation sent them, while the two of them were still immersed in their road map.


More than 3,000 companies have moved their operational headquarters from Catalonia and 1,000 of these also their tax domiciles. 


Meanwhile, those who caused this disaster, at its head or as part of the electoral lists of 21st December. That is, if they fail to explain their economic formulas for the future and the strategies they have in place to return to normal in their electoral manifestos why these companies should return to the territory once again, to most of the companies that have left. They are not guilty and continue talking about unilateral independence, as if the issue was not their fault. 


The European Commission has estimated the cost of the economic slowdown as 5,000 million Euros, the impact of the Catalonian crisis on the growth of the Spanish gross domestic product.


Meanwhile, businesspeople are still worried about the situation and expectantly await the results from the 21st December, and the possibility of repeating a government that continues with the independence mantra. It would mean, once again, continuing political instability and new elections. Quite a perverse formula for the battered economy.


The division within business is also evident: a minority of businesspersons have manifested publicly -not everyone- as being in favour of independence, while the majority are for constitutional business-as-usual and compliance with the Statute. 


The political crisis is punishing more tourism than the jihadist attacks last August, as shown by the data provided by different sectors.


A survey carried out by the employers' organisation Pimecha detected that almost 70% of Catalonian businesses recorded less sales in October than last year. 


According to the same study, 80% of companies in the tourism and hospitality sectors blame the political situation. There are few businesspersons who are willing to talk about this issue in public. They are afraid to express their opinions freely.


The boycott of Catalonian products has increased in recent times, with the consequent concern for the companies affected. With this complex political panorama, but not yet knowing the results and the make-up of the new government in Catalonia, the uncertainty continues hovering over a Catalonia that has been socially and economically punished.


In this issue of the TEJ, we intend to present the opinions of experts in economics so that, given this information, readers may have more elements of judgment at their disposal about the economic future of Catalonia, Spain and Europe.

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