Spain: Legislators in Catalonia elected Carles Puigdemont, who has been pushing for independence for the big Spanish region for years, as president on January 10.
His victory is highly significant for the future of Catalonia, where separatist sentiment is on the rise and the new leadership has said it wants independence within 18 months.
Pro-independence parties won the majority of seats in Catalan parliamentary elections last September. Most Catalans would like to see a referendum on independence, although they are divided on what the region’s future relationship with Spain should be.
The escalating calls for independence have been driven by a host of factors: the unsucessful economic policies of Spain’s central government, the ongoing European financial crisis, Spain’s slow economic recovery and the current gridlock in Spanish politics after inconclusive national parliamentary elections in December 2015. Ironically, the Catalonia issue may encourage national parties on both sides of the political spectrum to form another government, led by Mariano Rajoy, the current conservative Spanish prime minister, says Angel Saz-Carranza, director of the ESADEgeo Center for Global Economy and Geopolitics in Madrid.
Prospects for independence depend on “whether new Catalan leadership actually executes its threats of disobeying the constitution; fear of prosecution; fiscal dependence on the Spanish government”—and whether Spain’s government offers the Catalans a good deal, says Saz.
An independent Catalonia would have a substantial impact on markets. The region accounts for 16% of Spain’s population, according to a recent report from the government of Catalonia, but contributes 20% of Spain’s GDP and 25% of its foreign trade. Europe would feel the bite as well. Catalonia makes up 34.8% of Spanish exports, with 65% of those exports flowing to the European Union.