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Catalonia: A Flawed Strategy

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Things quieted down in Catalonia after the non-referendum held on 09 November, as expected. The images of citizens lining up to peacefully cast their non-ballots were trumpeted around the world by the pro-referendum parties, who almost immediately fell to squabbling about next steps, independence credentials and the Govern’s budget. The most fervently pro-independence Oriol Junqueras of the ERC pushed for immediate snap elections; however, Catalan President Mas would only agree to that if the parties ran on a joint ticket. Eventually, after much debate, including the offer of a joint ticket led by a non-politician – a “respected Catalan of good standing” – Mr. Mas agreed to set a date for early elections: 27 September 2015.

That is a very long time away and world events have moved faster than the Catalan timetable: the war against the Islamic State, the first and second Minsk ceasefire between Ukraine and Russia; and the tragicomedy of the negotiations between Greece and the “Institutions”. Catalonia has struggled to stay in the news.

There were some interesting developments this week, however:

  • Spain’s Constitutional Court delivered its long-awaited, but not at all surprising, verdict[1] on the Catalan non-referendum and the Consultation Law that had originally been promulgated to authorize it. In a unanimous decision, both were found to be unconstitutional; with the Court giving their opinion that no autonomous community could address any question to any part of the population that affected the sovereignty of the whole. It reserved those competencies exclusively to the national government;

 

  • The General Council of the Judiciary (Consejo General del Poder Judicial or CGPJ) will also decide today in plenary session on whether to expel Santiago Vidal i Marsal[2], a justice seated in the Provincial Court of Barcelona, for his role in writing up a draft constitution for a Catalan state. Although Mr. Vidal acted in a private capacity and asserts that the draft was no more than a thought exercise and not an official or even commissioned work, the CGPJ is arguing that the Catalan judge is nonetheless in violation of ordinances limiting the private activities of sitting magistrates. It is expected that the CGPJ will approve the recommendation, despite some arguments against the severity of the proposed action[3].

President Mas held a press conference on Wednesday in Barcelona during which he responded to the decision of the Constitutional Court[4]. The Catalan leader expressed himself unsurprised, but saddened by the Court’s decision, lamenting that the Spanish state had closed off all other legal means for the Catalan people to express their will except the elections scheduled for 27 September.  Mr. Mas further stated that the status quo in Catalonia was “unsustainable” and that there was no longer any middle ground: “What is the alternative? Try again with a new Charter (of Autonomy)? Lose our self-governance and our identity?”[5]

masyvidal

The Drama Plays Out

Last year I published an analysis[6] of possible outcomes of the Catalan independence process. These “endgame scenarios” speculated on five mutually non-exclusive[7] paths for the resolution of the crisis between the Catalan government and the Spanish state, and I assigned probabilities to each outcome. These were:

5outcomes

I believe this analysis to have been reasonably accurate so far:

  • The Catalan government attempted to organize a referendum under the auspices of the National Congress of Deputies and was denied;
  • The Generalitat then promulgated the Consultation Law in an attempt to organize an unauthorized referendum (scenario 3);
  • When the Constitutional Court ordered the suspension of the Consultation Law during deliberations on its constitutionality, President Mas “allowed” the “civil actors in Catalan society” to go ahead and organize an unofficial referendum without official involvement by the autonomous community’s government (scenario 2);
  • We are now at the point where the Catalan government is seeking additional legitimacy and an electoral mandate through the process of an “electoral referendum” on the 27th of September (scenario 4).

The arguments I have read and heard in favor of this course of action is that winning democratic legitimacy is a prerequisite for any conversation with Spain and Europe on an amicable divorce: hence yesterday’s motion by representatives of the Esquerra Republicana de Catalunya (ERC) in the Congress of Deputies which called on the Spanish government to respect the upcoming Catalan elections as a true plebiscite and to negotiate a separation in case of a victory by the pro-independence parties[8]. Needless to say, the motion was buried: not even CiU voted in favor[9].

The corollary to this argument is that, with the support and backing of the Catalan people, Madrid will not be able to intervene, nor will Europe long be able to refuse Catalonia entry into the EU and the Euro (or even expel them). The economic and financial instability of the Union will not allow its members to play ducks and drakes with so important a region, and therefore pragmatism will win out very quickly.

On such logic are lofty castles built in the air.

Down A Blind Alley

I believe that this reasoning is seriously flawed, on a number of levels. The history of the European Union, especially its recent history, ought to dispel any illusions that democratic legitimacy matters in the slightest. Democratic legitimacy and 5 euros will buy you some butifarra[10]. Europe’s record of respecting democratic legitimacy is atrocious:

  • In 2001, the Irish Constitutional Court found that the changes proposed by the Nice Treaty imposed changes on the Irish Constitution, which required approval by popular referendum. When the Irish were the only member state to reject the Treaty (in fact they were the only ones to vote on it), the Irish government was told to organize another vote and “make sure it turned out the right way.” It was approved in 2002 in a second referendum;
  • The exact same thing happened in 2008, when Irish voters rejected the Lisbon Treaty, only to be forced to vote again and approve it in 2009;
  • At the start of the 2008 Financial Crisis, the Irish government initially refuses to guarantee the liabilities of the Irish banks, calling such an action “obscene”. Then President of the ECB Jean-Claude Trichet threatens to remove all ECB deposits from Ireland, essentially leaving the country bankrupt. The Irish government is forced to nationalize the private debts of the Irish banks and accept and ECB bailout;
  • Lest you think Europe has something against the Irish, the next in line to receive this treatment was Greece. When Prime Minister George Papandreou balked at accepting the punitive terms of the Troika for the full Greek bailout package and proposed to submit them to a plebiscite, he was quickly “ordered out” and replaced by the safe EU technocrat Lucas Papademos, a former Vice President of the ECB and former subordinate of Monsieur Trichet’s;
  • It was then Italy’s turn: Prime Minister Silvio Berlusconi, for whom I have no love, was also “ordered out” in October 2011 and replaced by another safe man: Mario Monti, a noted economist and long-time civil servant, who had also spent 10 years in Brussels as an EU Commissioner.
  • Returning to Greece, newly elected Prime Minister Alexis Tsipras and rock-star Finance Minister Yanis Varoufakis felt they had a very solid negotiating position vís-a-vís the Eurogroup thanks to their impressive electoral plurality as well as the soundness of their economic arguments. They were quickly disillusioned of the relevance of either; indeed, they were browbeaten again and again until they submitted on terms that they had consistently rejected as “absurd and unacceptable”. And they were lucky not to get a worse deal.

eliminated

Since November 2011 there has been a consistent theme in Europe: Spain has supported Germany’s position through thick-and-thin, even against her own economic interests. Why November 2011? That is when the Partido Popular won the last general election. Mariano Rajoy, newly installed Prime Minister quickly came to a few conclusions:

  • Going up against Germany and the ECB was a really bad idea, democratic mandate or not;
  • Spain was going to need money – lots of it – and soon, and those were the only two lenders the country could count on;
  • In the event the Catalans actually carried through their promises of making trouble should the PP win the elections, it was better to have those two on the side of Madrid.

I rarely compliment Mr. Rajoy, and never on his brilliance, but he was spot on with all three suppositions. Time and again, Spain has played the poster child of austerity; time and again, Spain has rejected overtures from France and Italy to form a “Mediterranean bloc” to act as a counterweight towards the policies coming out of Berlin and Frankfurt; and when Messrs. Tsipras and Varoufakis came to town, it was Mr. de Guindos who handed Mr. Schäuble a new bat every time the old one broke over a Greek head.

The price has been heavy: Spain’s unemployment rate peaked at 26% and remains stubbornly at 23.7%. Spain is the country in Europe with the greatest risk of poverty and the greatest degree of income inequality, so while the GDP has been growing nicely over the past few quarters, the gains have not been distributed widely at all across the population. Indeed, GDP per capita has fallen to below the 2006 level while the country has been pushed into wage and now monetary deflation.

But loyalty has been rewarded as well: Spain has yet to meet any of its fiscal targets and continues to run and enormous deficit yet nary a word of rebuke from Germany, the ECB or the IMF. Spanish Finance Minister, Luís de Guindos, has done such a good job as Schäuble’s attack dog that he has been promised Jeroen Djisselbloem’s job as Chairman of the Eurogroup, to better bark at recalcitrant member states who question austerity. Another long-time Popular politico, Miguel Arias Cañete, was also thrown a bone as the new EU Commissioner for Climate and Energy. Mr. Cañete, who spends more time with his foot in his mouth than on the ground, is uniquely qualified to run a ministry dedicated to “sustainability and climate action” having previously been the director of two petroleum companies. But this sort of horse-trading is minor league stuff; it is the grease on the wheels of the machinery in Brussels and Strasbourg.

The really bill will come due on the 28th of September, after the Catalans have voted for a new government. Assuming firstly that the fragile pro-independence coalition between ERC and CiU doesn’t break apart before the election, and further assuming that the pro-independence vote remains at the same level as in 2012 – about 67% of the vote – or increases, then the matter comes to ahead:

  1. The newly formed Generalitat would ask the Spanish government to enter into negotiations for a separation based on the popular mandate just received;
  2. They would be categorically refused;
  3. The Catalan government would then either proceed to propose a unilateral declaration of independence in the Catalan Parliament or else the government would fall.

My personal opinion is that, having come so far, the Catalans would opt for the unilateral declaration of independence. They would then appeal to Europe for intervention on their behalf.

I urge them to prepare themselves for disappointment.

Indeed, I now firmly believe that they should prepare themselves for jail. Mr. Rajoy will request and receive carte blanche from Berlin to deal with Catalonia as a purely internal matter and to use any and all means necessary to restore order and compel obedience to the national authority. Nor do I believe that Mr. Rajoy will, in the end, cringe from doing so. Thanks to the odious reform of the Citizen Security Law, passed late last year with only the votes of the Partido Popular delegates, the government now has the legal tools to fine, prosecute and imprison pretty much anyone it finds offensive. The criminalization of peaceful protests and of undefinable acts as vague as “insulting the honor of Spain”- which frankly hearken back to the days of the dictatorship – guarantees that a substantial proportion of the Catalan population could be persecuted should the government choose to do so.

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No one will speak for Catalonia; she will find no friends in any capital of Europe. Some sympathy perhaps; the Baltic States and the former Czechoslovakians might remember their own struggles for independence, whether or not the cases are remotely comparable. But no one will contradict the “Institutions” that run the European Union, with whom Madrid has assiduously cultivated a deep and interested friendship. Catalonia is too far west to play the Russia card; and there will be no deus ex machina coming out of the United States, whose principle emotion will be one of annoyance at yet another distraction from the serious matters of combating the Islamic State and preventing the disintegration of Ukraine.

Does this mean that Catalans who wish for independence are doomed? Not necessarily.

What is doomed is the notion that Catalonia can get its independence simply by voting for it, along with the Euro, the EU, NATO and a pat on the back. Assuming that narrative was ever believable, I don’t believe it is any longer. Catalan independence “on the cheap” is not going to happen, and believing it can only lead to grievous errors in judgment and policy. Thomas Paine wrote in 1776:

“What we obtain too cheap, we esteem too lightly; it is dearness only that gives everything its value. Heaven knows how to put a proper price on its goods; and it would be strange indeed if so celestial an article as freedom should be highly rated.”[11]

The vote on the 27the of September may still be a necessary precursor to independence for internal reasons; but no one should cling to the illusions that it will hold any weight with Spain or Europe. If a sufficient number of Catalans are determined to continue down the path towards independence, it should be with eyes wide open and the expectations of a hard road:

  • The necessity of a unilateral declaration of independence leading to Spanish government crackdown on politicians, institutions and civil societies that support it. There will be no negotiation;
  • Peaceful civil unrest, economic dislocation, work stoppages: all would have to be carried out for years. The economic cost to Spain would have to be enormous and of long duration before Catalonia could reasonably hope for independence;
  • Even assuming this was successful – if unrest in Catalonia put foreign creditors and investors to flight despite the ECB backstop to Spanish debt – then Catalonia would have to plan to be out of the Euro and out of the customs union for the foreseeable future. No one is going to let them in and Spanish history does not lead me to think they will forgive and forget.

None of the above considerations are absolute bars to independence; certainly not the third point. There is no reason to think Catalonia could not do very well outside the Euro and even outside the EU; indeed, they might be outside the Euro only a very short time before everyone else joins them. However the implication is that pro-independence Catalans need to change both their planning and their narrative. It would be a mistake not to plan for the worst: expulsion and a new national currency. And it would be a disservice to their people not to have a frank debate on how willing they are to pay the price for freedom.

There remains one additional possibility not considered in my earlier analysis: Mr. Mas could postpone the Catalan elections until 2016. He would be gambling on a Podemos victory, either outright or in a coalition of the left, in the general elections to be held near the end of the year. Such a result would radically change the balance of power in Europe; at the very least, Madrid could no longer count on unconditional support from Germany and the ECB. While I don’t think a Podemos government would be willing to negotiate an amicable divorce with Catalonia any more than a Populares government would, it would find itself just as friendless as the Catalans and espousing an economic and debt ideology that is anathema to Berlin. Suddenly, the Catalans might have more room to maneuver.


Sources and Notes:

[1] Manuel Marraco, “El Tribunal Constitucional anula la declaración soberanista catalana,” El Mundo, 25 February 2015 (in Spanish)

[2] Europa Press, “El CGPJ decide hoy si expulsa al juez Santiago Vidal por elaborar una Constitución para Catalunya,” La Vanguardia, 26 February 2015(in Spanish)

[3] “El CGPJ expulsará hoy de la carrera al juez que redactó constitución catalana,” La Vanguardia, 26 February 2015 (in Spanish)

[4] “Mas afirma que la decisión del TC evidencia que la única vía “legal y democrática” para la consulta es el 27S,” Catalunya Press, 25 February 2015 (in Spanish)

[5] “”¿Cuál es la alternativa? ¿Volver a hacer un Estatut? ¿Renunciar a nuestro autogobierno y quedarnos diluidos?”

[6] Fernando Betancor, “Catalonia and Spain: Endgame Scenarios”, Common Sense, 21 April 2014

[7] In other words, one scenario could shift and become another scenario under certain circumstances

[8] Fernando García, “CiU se abstiene en el Congreso ante una propuesta soberanista de ERC,” La Vanguardia, 26 February 2015 (in Spanish)

[9] The CiU deputies abstained, arguing that Catalan matters would be decided in Catalonia.

[10] A typical (and delicious) Catalan sausage.

[11] Thomas Paine, “The Crisis,” 23 December 1776

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