Catalonia: Cooperation or Confrontation

Just-DivorcedOne of the main uncertainties surrounding the eventual creation of a Catalan state is how exactly this new state would fit within Europe. Many Catalans wonder whether this new scenario would allow them to continue to enjoy the economic benefits that come with belonging to the European Union (EU) and the euro area. Although statehood, by definition, would open the door to numerous alternatives, in Catalonia’s case there seems to be a broad social and political consensus about the desirability of staying within the EU and keeping the euro as a currency. How could an independent Catalonia go about achieving these objectives? In my opinion, the answer to this question depends on the kind of scenario the eventual founding of the Catalan state takes place in. Broadly speaking, we could distinguish between two possible scenarios: one of cooperation and one of confrontation.

In a scenario of cooperation, Spain would accept an outcome favorable to independence in an eventual consultation of the Catalan people, thus initiating a process in which both governments would work out the terms of a “friendly divorce.” This is precisely the framework provided in the accord between the Governments of Scotland and the United Kingdom, which commits both parties “to continue to work together constructively in light of the outcome [of the referendum], whatever it is, in the best interests of the people of Scotland and the rest of the United Kingdom.” In a scenario of this nature, whether or not Catalonia gained automatic admission to the EU (and, as a result, to the euro area) would be a mere formality, only important on a symbolic level. In the worst of cases, Catalonia would be admitted to the EU after a negotiation process that, given the extraordinary circumstances mentioned above, should end up being simplified and relatively quick. What would be most important would be to ensure, during the transition period, the continuity of the rights and obligations that govern the economic relations between Catalonia and the rest of the EU, and in particular, those regarding the free movement of goods, persons, and capital. This “extension” of the current regime should also naturally include all monetary aspects. Therefore, although Catalonia would not be a formal member of the euro area, the euro would continue to be its official currency, and the Catalan financial institutions would have access to the Eurosystem financing mechanisms and European payments infrastructure. At the end of the transition period, and after Catalonia is formally admitted to the EU, the new State’s central bank would take up its duties as a national central bank within the Eurosystem.

Read @ Col·lectiu Emma

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