Feeds:
Posts
Comments

Archive for the ‘secession’ 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.

Read Full Post »

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…)

Read Full Post »

On Friday the 17th of October I will be speaking at the annual conference of the Josep Irla Foundation in Barcelona, Catalonia. The theme of the conference is “Catalonia’s right to decide.” I will be in town Thursday and Friday and would enjoy meeting with any Pileus readers while I am there. Please contact me at jason.p.sorens AT dartmouth.edu. If you are interested in coming to the talk, here is a program in English, and here are the details:

When: Friday 17th October 2014

Where: Barcelona – The Mirador, Centre de Cultura Contemporània de Barcelona

Address: Montalegre, 5 – 08001 Barcelona

Interpretation: English

Read Full Post »

Ten days ago, the Washington Post published an op-ed of mine on whether the United States will ever see a strong secession movement like that in Scotland. I took the “yes” position and also took the opportunity to boost the Free State Project, while also making clear that it does not support secession. While it’s easy to think that current political equilibrium is stable, there are several considerations that make me think the U.S. will eventually (50 years from now, more or less) see a strong secession movement, most of which I mentioned in the piece but some of which I did not, for reasons of space: (more…)

Read Full Post »

To favor creating a new state somewhere is to be a dirty nationalist. To favor keeping all existing national states precisely as they are is very progressive and enlightened and not nationalist at all.

How do these people believe this stuff? Even though independence would be bad for Scotland in the short to medium run, part of me hopes that they vote Yes today just to give the Westminster, Transatlantic, and Eurocratic establishments a good, hard kicking.

Read Full Post »

Unless the polls are systematically biased or there is a late-breaking surge in support for “Yes,” the “No” campaign looks set to squeak by with a narrow victory in the Scottish independence referendum. On the betting markets, a “Yes” vote has plunged below an implied probability of 20%. What has this decline in the prospects for independence done to capital markets? In my last post on the subject, I found that British firms and the pound were nearly untouched by what was at the time significant momentum for “Yes,” but that a nine-firm Scottish equity index was hit hard. If those losses reflected unease about independence, then the latest news should have caused growth in my Scottish equity index.

The biggest decline in the Yes team’s chances actually came overnight September 11-12, when the chances of Scottish independence abruptly fell about 10 percentage points on the release of new polls in the evening of September 11. (For a full list of recent polls, see Wikipedia.) The Yougov poll showing “No” in the lead (a dramatic reversal from its previous poll) seems to have been leaked just before the closing bell on September 11.

betfair independence odds

Accordingly, I examine the performance of the Scottish equity index on the London Stock Exchange between 4:30 PM and 5:00 PM local time on September 11, when the odds of Scottish independence declined so rapidly. These are the nine stocks I include in the index: SL, SSE, FGP, WEIR, SGC, AGGK, WG, ADN, and MNZS. Of these, eight of nine rose on the poll news. Again, I weight by each stock by its market cap to create the index. The index rose 0.5% on the news, a rather small increase compared to the 1.7% decline after the shock Yougov poll showing “Yes” ahead. The overall patterns were pretty similar, though. The two transportation companies, Firstgroup and Stagecoach Group, were basically unchanged between the two. Energy-linked firms and Standard Life led gainers. Aggreko (temperature control systems) registered a small gain, and Aberdeen Asset Management a somewhat larger one.

Roughly a ten-percentage-point drop in independence likelihood led to a 0.5% gain in the value of Scottish equities, less than a third of the loss in Scottish equities after an eight-percentage-point gain in independence likelihood just a few days prior. On balance, these results suggest we should revise downward the costs of secession suggested by the prior post.

One objection to this interpretation might be that the leak of the Yougov poll just before the closing bell gave traders little time to respond. But this does not appear to be the case. The Scottish equity index was flat at the opening bell on September 12, suggesting that there was no new information for traders to consider.

Here are two more interpretations. First, betting markets are less liquid and well-capitalized than financial markets. The actual gain in the probability of Scottish independence after the first Yougov poll may have been greater than the immediate response on betting markets. Second, the shock of a poll actually showing “Yes” ahead may have led traders to overestimate the likelihood of Scottish independence, and perhaps even the costs of secession (in a moment of panic). Having been inured to the initial shock and its aftermath, traders then took later news with more equanimity.

Overall, though, the results are still suggesting net economic costs to Scottish independence. How much of the emphasis should be put on the “Scottish” part of that phrase and how much on “independence” remains a matter of debate, but clearly energy and financial firms are more affected than transportation and service ones.

Read Full Post »

The Oxford Review of Economic Policy has a brand-new special issue on the economics of independence. The entire issue seems to be open-access right now, so check it out. (HT: Doug Irwin)

In Scottish news, polls have turned a bit against independence, and betting markets now price a “Yes” at around 22-24%. I will take another look at how this affected capital markets, and what that implies about the economics of independence, a bit later in the week.

Read Full Post »

Older Posts »

Follow

Get every new post delivered to your Inbox.

Join 1,024 other followers

%d bloggers like this: