Words ought to be a little wild, for they are the assault of thoughts on the unthinking
- J.M. Keynes

Monday, 26 November 2012

Thoughts on Catalan Election Result

One has to feel sorry for Arthur Mas, the pro-independence Catalan leader. In September he seized upon the vote-winning idea of Catalan independence with the implicit subtext that all economic problems would magically vanish upon its arrival. Until recently it looked as if he would get an absolute majority and a great lift in popularity, status and bargaining position. Instead everyone won but him.
Ironically voters found the idea of independence so alluring that they voted for more radical pro-independence parties than Mas’s CiU. As the FT reports, CiU which had 62 seats in the previous parliament crashed to 50 seats when once it was projected to achieve an absolute majority of 68 in a 135 seat parliament. The biggest amongst the more radical separatist parties, Esquerra Republicana (ER), more than doubled its seats in the Catalan parliament (21 from 10). Together with the CiU, pro-independence parties now control 87 of the 135 seats in parliament.
This more radical pro-independence parliament is likely to have more serious repercussions than a parliament with a CiU majority especially as the record high turnout of 69.56% (compared to 58.78% in 2010) shows a clear mandate for independence. Mas probably opened Pandora’s box hoping to find a cure for his plummeting popularity due to forced austerity. Frozen from capital markets with €42bn in debt and clinging on to emergency credit lifelines from Spain he desperately needed to up his bargaining power. Unfortunately, he unleashed the evil of populism.
The result itself is not surprising since it is part of the process of growing extremism which is underway to a greater or lesser extent in all of Europe. However, it presents Spain with a Catch-22 situation. To do nothing would increase resentment and further fuel the shift towards the radical pro-independence parties. To appease Catalonia will set a precedent for other Spanish regions who are surely watching the performance of the independence card. Given the propensity of politicians to steal from the future and shore up the present, the likely scenario is for Rajoy and Spain to do nothing and rebuff all Catalan demands. This is a relatively easy approach since constitutionally Catalonia has little power and the central government can always handle strikes and demonstrations with a little tear-gas. Also, taking a hardline stance makes Rajoy appear strong and keeps the economic trainwreck on the rails for sometime longer.
Of course the eventual denouement is going to be far worse but that is always someone else’s problem.

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