12.02.2014

Catalonia has a date and a question for its referendum on independence. The debate about what may happen with our country in the event that it wins is wide open. The months go by and we keep asking what kind of relationship Catalonia might have with the EU. Some believe Spain's Foreign Affairs Minister Margallo when he says that 'independence would keep Catalonia out of the EU forever'. But does the EU really have any incentive for that to happen? What could the EU gain by admitting an independent Catalonia?

1. Central Europe would have a new strong ally in the Mediterranean

A country like an independent Catalonia is not small by European standards. It would be eighteenth in terms of population and 13th in terms of its GDP (tied with Finland and Portugal) and it would export as much as Denmark (58 billion euros abroad and 55 billion to Spain).

It is the home of more than 5,300 multinational companies, many of whom use the Catalan territory as their base of operations for their exports to the rest of the Union. Novartis, for example, exports 90% of its production to the European market.

Keeping the economic paralysis that exists in the south of Europe in mind, a State of Catalonia, which would develop as a prosperous state in the European Mediterranean, could act as a Franco-German anchor in the region and as an example of good practices to follow for the rest of the Mediterranean states.

Catalonia can be, without a doubt, a natural ally of both the Protestant corridor of Holland, Finland and Germany in order to advance a responsible European integration, and at the same time of free traders Denmark and Sweden who will want to preserve the common market at any price. It will also be an ally of France, keeping in mind that France is today Catalonia's top commercial partner. The State of Catalonia small size will also let it be seen not as a potential competitor of the most populated states, but as a catalyst and ally in the Mediterranean zone.

Because of its commercial potential, leaving Catalonia out of the EU would be too big a risk for the Union itself. A prosperous Catalonia excluded from the EU would send a dangerously encouraging signal to Euroskeptics all over.

2. Independence could force Spain to make reforms

Today, the elites of some Spanish and Italian regions can think that their economic development is not necessary in order to provide their citizens with quality services. They can get the same results thanks to the millions of euros that are transferred to them from the other more prosperous regions and from the European subsidies that lower income regions receive.

Catalonia's independence could be the first movement in a larger series that ends this 'rational underdevelopment' that many regions of Mediterranean states suffer, particularly in Spain.

This is a situation that worries many Europeans. Notice, for example that the Spanish State will have ended the year 2020 with 35 uninterrupted years as a net receiver within the EU. It didn't even contribute when countries as poor as Romania and Bulgaria entered the Union.

A state of Catalonia, therefore, would mean the loss of transfers to any of those Spanish regions and could generate a reaction that incentivizes policies based on a productive economy.

Not being able to look forward to the 16 billion euros of Catalonia's fiscal deficit could be the opportunity that the Spanish state needs for many Spanish regions to become responsible for their own expenses and to reform their finances in order to become more sustainable.

3. It would give incentives to the EU to end its democratic deficit

On the other hand, the entry into the EU of the State of Catalonia would help shed light on the inherent contradictions and inefficiencies in the way the EU works today.

At the same time that a new State and new interests are added to the European playing board, the need for reform will become more apparent and it will be more necessary than ever that the European institutions become more democratic. The entry of a 29th member will make it crystal clear that decisions cannot continue to be made either unanimously or in midnight summits. It will be necessary to give real power to the European Commission and to the European Parliament in order to make the Union work.

Finally, it's good to point out the example of the United States of America (made up of fifty states) to see that the claim that 'an EU is weakened by having too many states' is little more than a fallacy.

4. It would reinforce Europe's 'soft power'

It's very possible that the successful existence of a State of Catalonia within the EU would serve as a peaceful and democratic example for those national communities around the world who aspire to independence.

The act of accepting as a matter of course that the Catalans (and Scottish) democratically choose with the ballot box what their future should be as a country would be an impetus for prosperity and peace. Armed struggle would be dealt a serious blow, and the celebration of referendums could end up becoming the new democratic standard that Europe exports to the world.

This fact would increase the EU's prestige as a source of peace, as well as its capacity to mediate in all kinds of international conflicts.

5. The State of Catalonia, a generous net contributor

With respect to its economic contribution, Europe doesn't have to worry. Catalonia's generous character is historically significant and can address European requirements without any trouble.

Looking at Finland as an example, we see a Scandinavian country that has a fiscal deficit with the EU that is just 520 million euros each year. With respect to their contribution to the bailout funds of the euro zone, the Finnish guarantee (but don't contribute) up to 12.5 billion euros that they would only have to pay in exceptional cases. In comparison, current Catalonia collaborates with 16 billion euros each year thanks to belonging to Spain. About 32 times more than the Finnish contribution to the EU budget.

In addition, according to economist Oriol Amat, the contribution that Catalonia currently makes to the EU is 1.3 billion euros per year.

Conclusion

Europe has much to gain by accepting an independent Catalonia. The matters addressed here are just a few of the many issues that will have to be evaluated by EU institutions in order to decide what should happen with Catalonia. There are economic ones, but there are also very important political ones.

Recently, for example, economist Xavier Sala i Martin revealed one important issue very clearly through a verbal exchange with Barroso. Would the EU prefer to recognize independence won with votes or with arms?

Beyond the Spanish government's predictable hysteria, the EU institutions and the 28 states of which it is composed should make a rational, cool analysis before deciding what kind of relationshiop an independent Catalonia should have with the EU.

Aleix Sarri.

Barcelona, 1985. Degree in Biotechnology and Masters in International Relations. I live in Brussels and work as an advisor to the European Parliament. I read above my possibilities, although I write a fair bit less. I believe that if Catalans had their own business press, we would have become independent a long time ago. @aleixsarri

This article appeared originally in Cercles Gerrymandering. It is translated and reproduced here with permission.