Europe, Oh Europe

The big question surrounding the debate on Catalonia’s independence is the following: What are the economic consequences of having one’s own state?

If we are to be intellectually honest, the truth is that the answer is not at all clear. And it is not clear because, to answer it properly, we would have to compare what would happen if Catalonia secedes with what would happen if it does not. And both scenarios are full of uncertainties. For example, staying might have disastrous consequences if Spain collapses even further into the financial crisis or if the Spanish government continues to implement the policies of interterritorial redistribution and public investments that have ended up strangling the Catalan economy. On the other hand, the benefits of separation in the short, medium, and long term might be positive or negative depending on the institutions, laws, regulations, and policies instituted by its government once Catalonia becomes its own state.

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