CNN – Spain’s next threat: Losing 20% of its economy

It’s September 11, 2012. The National Day of Catalonia. And an estimated two million people are on the streets of Barcelona waving banners “Catalonia — The next state in Europe” and “Independencia.”

Separatist Catalans are calling for sovereignty from Madrid and the rule of the conservative People’s Party, led by Prime Minister Mariano Rajoy.

Losing 20% of the economy is the last thing the Spanish government needs right now. But if those calling for Catalan independence get their way, that could be exactly what happens.

Catalonia — a region in the northeast of Spain and home to global brands and tourist attractions including Barcelona Football Club and the Gaudi House Museum — represents one fifth of the Spanish economy.

The Catalan independence question comes at an inconvenient time for Rajoy’s government. Spain, part of the eurozone mainstay, is grappling with unsustainable borrowing costs and a soaring public deficit while trying to placate public anger over a lack of jobs andstringent austerity.

Out of the hardship, regional disputes in northern Spain have started to resurface, particularly in Catalonia. Economists at Deutsche Bank say the political turmoil in such a prosperous region could be the catalyst that forces the Spanish central government into seeking aid from Europe’s permanent bailout fund, theEuropean Stability Mechanism.

As the industrial heartbeat of the eurozone’s fourth largest economy, Catalonia is the most populous and affluent region in Spain. Situated on the Mediterranean and bordering France, the area is home to seven million people and made up of four provinces: Barcelona, Lleida, Tarragona and Girona.

Read @ CNN