Article written by Fernando Betancor, an American economist living in Madrid, Spain. He is an active member of Democrats Abroad and an advocate of political and economic liberalism. He publishes articles on his website Common Sense and tweets @fdbetancor.
On the 11th of September, Catalans celebrated “La Diada”, the equivalent of America’s Fourth of July. The major difference is that La Diada doesn’t celebrate independence, it commemorates the loss of the historic rights suffered by the Catalans upon the defeat and occupation of Barcelona in 1714 during the last year of the War of the Spanish Succession. These ancient privileges dated back to the Kingdom of Aragon and the fight against the Moors; they had been slowly accumulated and defended against feudal lords and centralizing kings and ministers for centuries after the Kingdoms of Aragon and Castile were united in a dynastic union that gave birth to the Kingdom of Spain. Upon the death of Charles II, the Spanish Habsburg dynasty ended without a direct heir: but there was a familial connection by marriage to the Bourbon line of Louis XIV through Phillip, Duke of Anjou, as well as the Austrian Habsburg line, put forward by the Archduke Charles. The French and Castilians backed the Bourbons; pretty much everyone else backed Charles, fearing the power of France should she have access to the still considerable wealth of Spain’s American Empire. To make a long story short, the French were defeated in Europe, but successfully installed Phillip on the Spanish throne; the Catalans, who had backed Charles, were left to their own devices after more than a decade of bloodshed in the rest of Europe. The Castilians were not gentle when they sacked Barcelona: indeed, parts of the city were razed completely and rebuilt by the occupying forces.
This year’s commemoration marks the 301st anniversary of that defeat and subsequent subjugation; but many pro-independence Catalans think it will be the last time La Diada is celebrated. They are hopeful to soon replace it with a true Independence Day. Approximately 1.4 million people took to the streets – a remarkable number considering Barcelona’s urban population is 1.6 million. Despite an atmosphere made tense by the impending regional election on 27 September and an increasingly bitter debate on independence and what it means to be a Catalan, the festivities were remarkable for their peacefulness and civility. Not even the most fervent unionist could accuse the masses of any violence or excess, even if they would not have been at all pleased by the enormous estelada, the Catalan independence flag, hanging prominently from the Arc de Triomf.
That possibility looks increasingly likely. Back in July, the Spanish national press – and I use both adjectives deliberately – was crowing that Junts Pel Sí (JPS) was polling less than its constituent parts had polled separately during the European Parliamentary Elections in May 2014. JPS is the principle pro-independence party consisting of the governing Convergéncia Party and the main opposition, Esquerra Republicana, along with some smaller organizations and civic actors. Voter intention for JPS stood at 35.8%, very far from the necessary majority. Even with the 4.2% of voter support for CUP, another pro-independence party, the pro-independence factions would have depended on support from Sí Que És Pot, which is lukewarm at best.
Three months later, and only two weeks from the election, voter intention for both Junts Pel Sí and CUP has surged to just over 38% (+3%) and 5.9% (+2%) respectively, while the “alternative” federalist parties of Ciutadans and Unió have fallen dramatically to 14.8% (-4%) and 1.5% (-3%) respectively. The Catalan Partit Popular continues its descent into irrelevance. As it stands, the pro-independence movement would fall short of a majority of votes, but would have a majority of seats in the Catalan Parliament, which raises an interesting dilemma. Artur Mas has said that even one seat more than a majority is enough for the process to continue; and strictly speaking, that is how parliamentary democracies work, like it or not. However, the intention all along has been to win a resounding mandate, and I’m reasonably certain that Mr. Mas and other independence leaders would prefer to win both a parliamentary and an electoral majority.
That is still a possibility. Recent polls in Europe have been notoriously bad and Spain is no exception. The pollsters were far off the mark regarding the recent autonomous community elections. It is entirely possible that “get out the vote” efforts will successfully mobilize the latent supporters of Convergéncia and Esquerra in the numbers seen during previous elections. The enormous organizational effort involved in La Diada and the short-term boost provided by it ought to give the naysayers pause for thought.
The likeliest scenario now appears to be that Junts Pel Sí and CUP will continue to strength enough to secure a 3 or 4 seat majority in the Parlament, but not an outright electoral majority. Is that an ideal situation for Junts Pel Sí? No; but there wasn’t majority support for the American Declaration of Independence in 1776 either. In such a case, the process will continue.
Even if Junts Pel Sí had, on its own, won an electoral majority, it is unlikely that this victory would have been followed by a unilateral declaration of independence (UDI). Pro-independence leaders are playing a very dangerous game and they know that any misstep could land them all in jail, or worse: the last time a Catalan President tried to declare independence, he was shot. Like in most aspects of life, timing is everything. The timing of the regional elections cum plebiscite: right after La Diada and while the hated Partido Popular was still in power in Madrid. The timing of independence is different: Junts Pel Sí does NOT want the Partido Popular, with its absolute majority in the Spanish legislature, to still be in charge. That is convenient, because the Spanish general elections are in December and every indication is that Spain will lurch into a fragmented government.
A strong showing by Podemos would be the most favorable outcome from the Catalan point of view: though opposed to secession, Podemos is on the record as supporting people’s right to decide, a broad revision of the Spanish Constitution, and opposed to the use of force against the people. There is no realistic scenario where Podemos would be in a position to achieve their goals; but as a senior coalition partner with the Socialists and United Left, they might be in a position to restrain Madrid.
Restraint is necessary: I’ve always argued that the risk of a violent Spanish reaction to a unilateral declaration of independence is high. That implies an escalation from legislative and judicial measures – which would be ignored – to suspension of autonomy and police measures. If these are met with resistance, a state of insurrection and military occupation might follow. There is nothing in Spanish history or culture that would lead me to believe that they would act otherwise. Pro-independence leaders in Catalonia have argued that the Spanish position is weak, and this is true: but it is not any weaker than in 1898 when the Spanish government resignedly went to war with a far more powerful United States. The government of Práxedes Sagasta knew it was going to lose; but they felt that the national honor demanded they go down fighting. The Partido Popular has not changed a jot in sentiment.
How do you gain independence without provoking a reactionary backlash? Very slowly. In the Pacific, the Chinese face a similar problem of pushing the boundaries of their sovereignty without provoking a military response from Japan or the United States. Over there, they are pursuing what are called “salami slicing tactics”; but while the Catalans have their own national deli meat, “butifarra-slicing tactics” work in exactly the same fashion. The outcome remains the same: independence. The means to achieve it are to encroach upon the institutions of the state and slowly appropriate them. To create a shadow administration that does everything the central authorities do, but without any irrevocable breach until the time is right. In other words, the Generalitat will create a Catalan tax authority in parallel to the Spanish one, but will still pay taxes to Madrid. It is a delicate balancing act: the Spanish state will see these parallel structures being built, but no single step must be sufficient cause to “send in the tanks”.
This process is not a secret, it has been well-publicized by Messrs. Mas and Junqueras previously. The “plan of action” envisages an 18-month transition period after a victory by Junts Pel Sí, culminating in a declaration of independence, a Constitutional referendum and the first elections of the independent Catalan Republic. What does the transition plan look like?
- An initial declaration of a mandate and formal avowal of the transition process by the Catalan Parlament;
- Formation of a unity government, which actually means a government formed of all pro-independence groups. Convergéncia would take 60% of the posts and Esquerra Republicana the other 40%. That would be conditioned on the need for CUP support: they would demand a number of posts proportional to their votes. A few posts might be reserved for pro-independence personalities outside of the three parties to demonstrate a broad and representative civic base;
- An invitation to the Spanish government to recognize the mandate and to enter into negotiations for a peaceful separation;
- The initial drafting of a new constitution, led by civil society. Critically, the Generalitat would not be involved at this stage, thus avoiding gifting Madrid with a justification for intervention;
- The continual creation of parallel state structures in the area of taxation, law, security, telecommunications, infrastructure, water and energy, and external relations;
- After 8 or 9 months, the Parlament would vote on a declaration of independence and authorize both a referendum on the new Constitution and elections for the new Catalan Republic. These would be held no more than 18 months from the date of the elections on the 27th of September 2015.
At any point, the declaration of independence could be accelerated, depending on the attitude that Madrid takes.
It is questionable whether the 18-month period is really necessary; Mr. Mas’s government has been assiduously building parallel state structures for some time now and there is probably little left to be done accept draft a new constitution. On the other hand, the delay is advisable: the Generalitat wants the Partido Popular out of power before moving aggressively. Time is also needed to demonstrate the complete intransigence of the Spanish state to any sort of negotiation whatsoever: if conclusive enough, it could convince many leaders of Sí Que Es Pot to revise their opposition to independence and vote in favor. The larger the “sí” vote on the declaration, the greater the legitimacy of it.
I am confident that the language used in the initial declaration of a transition mandate will be so worded as to avoid giving Madrid an excuse to declare it outright treasonous. The majority of the politicians in Madrid and Barcelona are lawyers; they will appreciate the nuances. That won’t stop Madrid from trying to intervene legally, but Brussels won’t tolerate the iron fist short of a declaration of independence, so the new Generalitat probably won’t face anything worse than what Mr. Mas’ Administration has for the past 24 months.
Then it will just be a matter of slicing that butifarra very thinly. Time appears to be on the side of the Catalans, for a number of reasons:
- The Partido Popular government, with its absolute majority in the legislature and nationalist authoritarian streak, is unlikely to outlast the December elections. If the outcome of the autonomic elections is any indication, they will be replaced by a much weaker “Broad Front” government consisting of the Socialists, Podemos and the United Left;
- In the meanwhile, the Partido Popular is likely to continue making its usual gaffes, such as a recent statement by the Defense Minister declaring that armed intervention in Catalonia would not be necessary if everyone obeys the constitution: leaving little to the imagination should events to the contrary occur. These declarations rightly infuriate all but the most ardent unionist Catalans, but they whip up the conservative, nationalistic base of the Partido Popular. This is, of course, a far more important consideration than pouring oil on troubled waters or attempting to mollify millions of people you call your countrymen.
- The more the Spanish government and judiciary are viewed as irredeemably corrupt and biased against Catalans, the more adherents to the pro-independence cause will come out to vote, which is why the police raid into Convergéncia’s headquarters as part of a corruption probe are so ill-timed. No one doubts that Convergéncia has some skeletons in the closet – it is part of the rotten Spanish political system after all – but no one doubts that the investigation was ordered by Madrid. They are therefore presented with the spectacle of a Catalan party being singled out (again) whilst Luís Bárcenas is treated to a tax-payer funded vacation and every one of the Popular politicians fingered by him as part of one of the largest corruption probes in history – from Mr. Rajoy on down – continues to hold office, immovably fixed like some degenerate Rodin sculpture. More of the same is sure to follow;
- The much vaunted Spanish recovery – a recovery in GDP and corporate profits, but not in employment or social welfare – is likely to slow down or even reverse itself. Instability in China’s financial markets and a wider slowdown in Asian economies in general is one factor; another is the outflow of hot money from Latin America and Asia back to the United States in anticipation of a Fed rate hike. Brazil is on the verge of a serious recession and has just been downgraded to junk status; Mexico is also weakening. They will drag down the rest of Latin America; which means that Spanish corporate profits are going to take a severe beating very soon. So much for the “austerity miracle” of Mr. Rajoy;
· So far, Spain’s foreign creditors and bond traders have paid little or no attention to the true political situation of the country. That is changing rapidly. With the public debt-to-GDP ratio continuing its inexorable rise, the stability of the Spanish state to make those payments matters very much. Already the risk premium of the Spanish bond over the German 10-year Bund has begun to creep up and is once again above Italy. Although the ECB maintains the capability of intervening massively to provide the Spanish sovereign with unlimited liquidity, it also means that Mario Draghi would have the same power to make or break the Spanish government as he had over Alexis Tsipras and the Syriza government of Greece. Should Spain pursue a course that runs counter to EU interests, the leash will be very short indeed.
This is a two-edged sword, however, as the ECB can also choose to backstop any policy from Madrid it does agree with, which it essentially what it has been doing for the past 3 years. It is not yet clear if the EU will be willing to intervene decisively in a “domestic matter” or one which sets a precedent that they are at pains to avoid: not to mention the latent issues of Scotland, Flanders, Padania, Corsica and other regions within the EU, there is also the burning problem of the separatist regions in Ukraine’s eastern provinces. Russia might capitalize on EU support of Catalan independence to push for the secession of Donetsk and Lugansk.
The fundamental causes of Catalan discontent are not going to disappear with the Partido Popular government, though the latter has acted as a tremendous irritant over the past four years. There is no consensus in Spain that would reasonably permit a productive constitutional reform; nor is there appetite in the other regions of Spain to transfer greater fiscal authority to the Catalans, since that would make the central government’s fiscal position untenable. Theoretically, Spain could rectify this situation, but practically it will not; therefore, the “Catalan process” is likely to continue to its logical conclusion.
Sources and Notes
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 It is an interesting historic footnote to consider that Isabel, Queen of Castile had two suitors: Fernando of Aragon, who she eventually married; and Joao of Portugal. If she had fancied Joao, the whole history of the world would have been very different.
 “Gateway to Catalan Republic: 1.4 million rally for independence in Barcelona,” RT, 11 September 2015
 The American Colonies were divided with roughly 40%-45% fervently patriot, 15%-20% fervently Tory and the rest neutrals, who simply wanted to be left alone and govern themselves; with significant regional variations. It was the British military occupation and the war that followed that truly broke the last links of the old allegiance to the Crown. Source: Michael Schellhammer, “John Adams’s Rule of Thirds,” Journal of the American Revolution, 11 February 2013
 Filipe Pacheco and Blake Schmidt, “Brazil Credit Rating Cut to Junk by S&P Amid Budget Strain,” Bloomberg, 10 September 2015