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Archive for the ‘European Union’ Category

What Next for Catalonia?

Participation in the November 9 “participatory process” in Catalonia exceeded my expectations. According to reports, 2.3 million people participated in a nonbinding vote organized by volunteers, a figure that would amount to over 40% of the electorate. (No electoral roll was used for this election because of Spanish Constitutional Court rulings prohibiting the support of the Catalan government; voters had to show identification in order to vote.)

Of those who voted, 81% supported “Yes-Yes” (yes to Catalan statehood, yes to Catalan independence), 10% went “Yes-No,” and 4.5% voted “No.” Gràfic dades 3Many voters who would have otherwise voted “No” boycotted the process entirely. Still, in the last Catalan election, 3.6 million votes were cast. We could take that number to be a rough estimate of those who would actually turn out to vote in a binding referendum. Since over 1.8 million voters went for Yes-Yes in a purely nonbinding show of support, we can confidently predict that a binding referendum would yield a clear majority in favor of independence.

Another data point in favor of this conclusion is that just under 1.9 million voters voted in favor of Catalonia’s proposed new statute of autonomy in 2006, which was 73% of those voting. A binding referendum on independence would surely attract higher negative turnout, but there is no way around the conclusion that support for independence could well reach 55 or even 60% in such a vote.

What next? Catalan President Artur Mas said in a speech after the vote results were announced that he would pursue negotiations over a legally binding referendum with the Spanish state. But what will happen when the Spanish state refuses to negotiate with him, as it will assuredly do? Mas seems to be leaving the door open to a prolonged period of stasis, which is exactly what the Spanish government wants, thinking as they apparently do that the Catalans will eventually “return to sanity” if they simply wait long enough. On the other hand, he could simply be giving the Spanish government one last chance to negotiate, and if that fails, to go ahead with an extraconstitutional plan, such as the “plebiscitary election” favored by the Catalan Republican Left.

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Last week I was in Barcelona for two days, giving a talk at an event on “the right to decide,” sponsored by the Centre Maurits Coppieters (nonprofit arm of the European Free Alliance, the European Parliament group for ideologically mainstream minority nationalist parties) and by the Fundació Josep Irla (nonprofit arm of the Catalan Republican Left [ERC], largest pro-independence party in Catalonia). I also did some media interviews. You can see some excerpts of my interview with Catalonia’s TV3 evening news here (in Catalan).

I was interested in going to find out more about Catalonia’s independence movement and its prospects. For background on the Catalan movement, see my post here on Pileus from September 24, 2012, two weeks after the massive Catalan National Day demonstrations that kicked off the current process. (That post, including its forecasts, has held up pretty well, I’d say.)

Now that the Spanish Constitutional Court has invalidated the consulta (consultative plebiscite) that the Catalan Government had authorized with the support of over two-thirds of Catalan MP’s and three-quarters of the Catalan electorate, the way forward is murky. An official consultation will not now happen. Instead, tens of thousands of volunteer poll workers are signing up to help with an unofficial poll that will involve ballots and ballot boxes and occur on November 9.

It remains to be seen how successful the November 9 consultation will be. The pro-independence parties and civil society organizations are trying hard to mobilize voters and volunteers for the event. The anti-independence parties are boycotting the vote, as indeed are some far-left types who hate Artur Mas, such as the leader of the ex-communist, ecosocialist party ICV-EUiA, which otherwise supports the “right to decide” and remains agnostic on independence.

If the November 9 consultation is successful, then the pro-independence parties will try to negotiate a “unitary party list” for early elections to the Catalan Parliament. They will treat this election as a plebiscite-by-proxy, and if an absolute majority of seats and votes go to the pro-independence list, Artur Mas will take it as a mandate for independence.

However, several difficulties remain. The more radically independentist party, ERC, wants to declare independence right away after a successful “plebiscitary election.” Artur Mas’ party, Convergence and Union (CiU), is divided between independentists and those favoring a solution like confederation. (Technically, the party is a long-standing alliance between two separate parties, the now-independentist Democratic Convergence of Catalonia and the autonomist Democratic Union of Catalonia.) Generally, the last few days have seen more division and acrimony among secessionist leaders than the previous two years, and if it continues, that division will alienate voters. Civil society groups continue to call for unity among the pro-independence leaders.

Another difficulty is that while a majority of Catalans with an opinion on the matter favor independence (a recent El Mundo poll had the anti-independence side ahead within the margin of error, but their polls have always been biased in an anti-independence direction), polls suggest the pro-independence parties would not together gain a majority in early elections. The reason for this is that many independentists are not in the secessionist parties. For a successful result, the “unitary list” will need to contain important leaders from civil society and non-secessionist parties.

If the Catalan process stumbles now, it will be a shame, because it will show the Spanish government that they can face down demands for more autonomy simply by standing pat and threatening to arrest politicians. Spanish autonomous communities like Catalonia enjoy far less autonomy than American states (they are not allowed, for instance, to vary the overall tax burden from a central standard).

The most likely outcome of the process now seems to be (more…)

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The German Election (update)

In yesterday’s German federal election, the Christian Democrats dramatically increased their seat share and moderately increased their vote share, while their coalition partners, the classical liberal Free Democrats, lost all their seats for the first time in party history. Since the Christian Democrats came five seats short of a majority, it looks as if they will have to form a “grand coalition” with the Social Democrats, who improved slightly. A few observations:

  • The right improved their vote share, despite the FDP’s losses, because of the good performance (but not quite enough to win seats) of the moderately euroskeptic Alternative for Germany. The left lost vote share. Nevertheless, the central result of this election will be that the German government will move to the left, replacing the FDP with the SPD as the CDU/CSU’s junior partner.
  • Looking at the party list votes, 15.8% of the vote went to parties not winning seats. This is, by far, a new record.
  • The foregoing outcomes are due to the relatively high 5% threshold parties face for winning seats in the Bundestag.

As for what this means for the future of the Eurozone, I have no idea. Status quo, I suppose. But if the economy remains poor in four years’ time, I think we can expect quite a shakeup. The two biggest parties are now in the hotseat.

UPDATE: These interesting charts show that the euroskeptic AfD received almost as many votes from former supporters of left parties as from the right. That may explain why the left, overall, is down.

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If you see corruption in the upper tiers of government as a major problem for an economy’s health in the long run (and the balance of evidence suggests that it is, at least at high levels in capitalist countries), then externally imposed austerity might be the only way to root it out. Syracuse prof Glyn Morgan passes along this story from Spain:

Rato, Castellanos and others jointly own a commercial lot near Madrid that is leased to a third party, according to Ayala’s Jan. 10 statement to the court. They also controlled a company together while Rato, 64, was running Bankia, Ayala said.

At the same time, Lazard billed Bankia 9.2 million euros ($12 million) for work either assigned or executed during Rato’s 27-month tenure at the bank, court documents show.

Their relationship exemplifies how a network of leaders from the governing People’s Party helped their associates among the financial elite to profit while the country’s savings banks, known as cajas, racked up losses. That toxic combination flourished during the boom fueled by Spain’s entry into the euro in 1999 and served to deepen the crash that resulted in a 41 billion-euro bailout of Spanish lenders, according to Jacob Funk Kirkegaard, a senior fellow at the Peterson Institute for International Economics in Washington.

Whether harsh spending cuts are a good idea or not for countries like Spain, Italy, and Greece depends in part on how one values the long run versus the short run. Also from the story:

“The things that we need to do to make Spain work require pulling the rug out from under the core interests of everyone” in power, Ken Dubin, a political scientist who teaches in Madrid at IE business school and Carlos III University, said in a May 22 telephone interview. “This is a political racket run for the benefit of politicians who suck the marrow out of the citizenry.”

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Greece Update

My go-to guy on Greece these days is Harris Mylonas, a fellow Yalie from a few years back, now teaching at GW. Here’s his latest take on coalition negotiations in Greece. Bottom line: new elections in a few weeks are looking increasingly likely, and the result might yield something more stable. Also check out his book.

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For the first time in history, Britain has vetoed a new EU treaty. The purpose of the treaty was to impose tough new limits on budget deficits of member states. David Cameron argues that the new treaty would open the door to new financial regulations that would disadvantage Britain. His move is likely to prove popular in the UK, where a bare majority of voters with an opinion on the question favors leaving the EU altogether. The Europhiles at The Economist, however, are unimpressed. The remaining EU members appear headed for a new treaty technically outside the auspices of the European Union (however, there are obstacles, as Britain will likely insist that no EU resources be used for the new institutions).

From a strictly economic point of view, however, it was always unclear why Britain and other non-eurozone member states needed to be part of the treaty. Large budget deficits in Britain no more threaten the euro’s stability than do large budget deficits in Sweden or the United States. The European Central Bank has no reason to monetize British debt, and while British default – a highly unlikely prospect to begin with – would surely harm the European financial system, the ECB presumably would intervene in such an event by supporting financial institutions within Eurozone countries. As ever, the construction of new economic-policy powers for EU institutions is about politics: building a political-economic bloc with stronger economic bargaining power. Pay attention to Sarkozy.

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