Catalonia´s economic impact of the referendum

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Catalonia and Spain are going through one of the most crucial moments of the Spanish history. After the petitions to the central government for an auto determination referendum and the negatives of the last one, the last October the 1st, the Catalan government decided to do a referendum, backed up for the main part of the parliament in the cation congress. Out of this referendum came out some political interpretations that won’t be discussed in this article, rather, we will look at the economic impact that experts have on the Independence of Catalonia.  

Nicholas Sambanis and Branko Milanovic claim “Richer regions are more likely to want more autonomy and conflict arises due to a disparity between desired and actual levels of sovereignty”.

“Giving Catalonia full fiscal autonomy would deprive the central state of an important source of money” – Analyst at risk consulting firm Stratfor. Where named region owns the 20% of Spain’s economy. Spain Finance Ministry said if Catalonia were independent the regional economy could shrink 30%.

“It will leave Catalonia a long period of uncertainty, it could exceed those of Brexit” According to Dutch Bank ING.

The leader of the Catalan government, Carles Puigdemont accuses Spanish central govern in Madrid of “undermining the European civil rights, freedom of speech, freedom of information and freedom of assembly”.Nationalistic parliamentary, majority of the Catalan Parliament – 47%- holds a mix of ideologies that goes from far left to center right. The division in the parliament is real as well, there are some parties that argue a more direct secessionism vision to Spain, rather other sectors of the Parliament prefer to sit-down with the Central Government and find together a more well-balanced solutions that harms less both implicated parts.

Of which there is no doubt is that if Catalonia completes its secessionist move,  automatically will have to leave the European Union, and the fear of falling out of European single market along with the economic impact  will arise. Investment would be redirected outside of the region and Spain will lose about 2% of its P.I.B. and hefty contribution to overall Spanish economy.  – (Express UK)

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In front of all these positions that defend the worst case if Catalonia gets the autonomy stand those who, on the opposite site, claim that the Catalan economic impact or the Spanish one won’t be even affected.

An analyst for the Société Générale states that “the actual exposure of Ibex 35 companies to Catalonia is minimal” That is good news for the Spanish economy. There is a 34% of revenue coming from inside Spain for those companies and a 50% of investors away from the European Union, that is a huge amount of business outside of the Spanish market.

However, in a sign that investors are worried, the yield on the 10- year Spanish bond -which had been one of the best performing in the eurozone this year-  jumped to its highest level since March, which means that the prices of the houses are growing.



In the middle of all this controversy and unknown stand the companies. A big number of them have started to pack the bags and leave the region, searching for a more stable economic frame where they can invest.

Since October the 1st, more than 1800 companies have left the region of Catalonia. At the beginning it was only Banking institutions, Food dealers or Insurance companies, however it has get to a point where even the medium and small size companies (PYMES) are starting to look for a better environment in which grow their companies.The 9th of October a total of 212 companies left the city of Barcelona, on the 10th 177 and 11th of October 155, that develops in a total of 544 in barely 3 days. Not only the wealth of Barcelona is being affected by all this situation, but the other parts of the region as well. Out of those 1.821 companies which moved to other places of Spain, 1.639 had headquarters in Barcelona, 36 in Girona, 71 Lleida and 75 in Tarragona.

Caixa Bank, Gas natural, Abertis, Banco Sabadell, Grupo Planeta… are examples of big institutions who have decided to leave the community too.

Caixa Bank sent a memorandum to its clients regarding the problem and defending the position in “our commitment to the defense of their interests”

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Startups HUB

Catalonia counts with a total of 1.200 startups which all together check in an amount of 1.2 millions of €.  That translates in a total of 1.440 million € by the end of the each year.

The reaction to the situation will get the investors as well, when last year, the Startups in Barcelona obtained a bigger amount with 282 million € from the investors, in comparison with Madrid, the capital city of Spain, which “only” got 173 millions.

In a pool made to Small business (Pimes) in Barcelona shows that 1 out of 3 companies claim to get a bad echo of the breakaway plan.The independence bearing is starting to harm Startups as well, however it is something that actually does not bother the “newborn” companies. Barcelona´startups have the feature of being young, peaceful, multicultural with obviously global values, open and dynamic. Most of them are digital based companies, which implies a software based product/service and the actual place where the company is established doesn’t have a substantial attention to the strategy.

TravelPerk said “Barcelona is an amazing place. People want to move here, which is why it became one of Europe’s most international cities and the startup scene is growing so fast. At TravelPerk, we are 54 people from 28 different nationalities! We don’t see that changing anytime soon” People will continually come to Barcelona to start new business.

Another CEO from a Barcelona based startup is Dennis Klett, from Lodgify. He expressed confidence in the fact that the digital-service-based nature of this business would withstand any upheaval. “Lodgify wouldn’t be affected by the independence of Catalonia. I don’t foresee an impact on our business considering our software is an online-based global product and is accessible from anywhere around the world,” he said.

Another similar case is the one by Rocketroi, Its CEO Nacho Rodés. In a more dulled vision says that most of their business are out-of-border-strategies and he doesn’t see a actual chain reaction for the company.

The actual harm and economic impact of the situation for the startups and, being honest, most of the implicates in the scenario, is the “up in the air” moment. Even if Catalonia finally completes the movement, businesses, investors and furthermore involve people will find the solution to a more beneficial situation for the, however what is damaging the Barcelona tech scene is lack of knowledge in what the taxes will be, legal framework, possible new laws, actual economic impact, currency, European Union implications

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ID Finance’s Dunaev agrees to that and states that even though the strong and powerful fintech that Barcelona has, it has to be able to “operate a pan-European franchise with a strong regional presence of the financial incumbents: banks, insurers, asset managers, consultants, data and technology providers.’

All this situation generates uncertainty. A recent poll conducted by Metroscopia showed that 62% of respondents in Catalonia said they were “worried” about the economic impact and future of their region, compared to 31% who said they were “excited”.

Ferran Brunet, an economist at the Universitat Autonoma of Barcelona said, “Uncertainly resulting from the referendum had already hit the Catalan economy causing business to delay investment decisions. This would only get worse if there was a declaration of independence”

Where you place yourself for or against the independence movement, there is no question that the uncertainty of the situation that it brings along, carries a fear for the investors in future operations, trades or strategies. Bad news for a city such as Barcelona, where the economy and the Hub of entrepreneurs is growing with excellent numbers and has been identified – at International level – as one of the most important cities for entrepreneurs in Europe.


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One Comment

  1. Empresari català

    Where did you get the source from “more than 1800 companies have left the region of Catalonia”?
    Because that’s not true, it’s false.
    These companies didn’t LEFT the region, they’re still there, workers didn’t move, assets didn’t change from any physical place. They just changed their “registered office”, which means, they just changed the official address of the company.

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