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I'm happy to welcome back professor
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morrow Guillen and he's a management
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professor here at Wharton and he's also
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a native of Spain which makes it
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especially appropriate because we want
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to talk about the recent elections in
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Catalonia which many saw as a kind of
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proxy for an independence movement there
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was a court decision in Spain last year
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which prevented a legal vote on
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independence as i understand it for
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Catalonia nevertheless these regional
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elections which have just taken place
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we're viewed by many as a sort of Club a
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site or a proxy of that and and could
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have had some sore could still have some
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serious ramifications so I wanted to ask
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some thought there was going to be a
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clean outcome it didn't come out so
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clean or so clear so could you put it in
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context and tell us it was a little bit
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messy and it's going to make the
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politics messy going yeah I think macys
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the word although as you know the mock
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receipts are always missing right but I
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think the outcome of these particular
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election is especially messy and of
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course you know this is only three days
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after the election has taken place so
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you know one also has to be careful
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about over interpreting the results
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because we don't know exactly what kinds
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of conversations and the coalition
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building efforts are being made by the
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various parties right depending on their
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seats in parliament i also want to
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clarify one important thing which is
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that i was born in spain but I've side
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of Catalonia although my father was from
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Catalonia so I don't claim though to
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represent both sides of the issue and
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you know i think in Spain and Catalonia
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everybody in the world is always
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differences of opinion and there's a
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diversity of views right but yeah the
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outcome is messy because on the one hand
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what you have is that the parties that
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were that proposed a independence for
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Catalonia won a majority of the seats
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but there are two parties there there
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were two lists competing for seats and
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they don't entirely agree as to what the
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process should be moving forward right
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that's one of the problems here the
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other is that although they got a
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majority of the votes the only of I'm
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sorry of the seats the only
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got about forty eight percent of the
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votes and the reason for that is that
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the electoral law is such that the rural
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areas in Catalonia have an over
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representation in Parliament relative to
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their population whereas the greater
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metropolitan area in Barcelona which
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includes many industrial towns around it
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iced under represented in terms of you
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know its population wait but the
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Nationalists the independent movement is
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a stronger in the rural areas in the
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smaller cities than it is in Barcelona
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itself so the result is very messy and I
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think it is fair to say that you know
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the last couple of years have you know
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resulted in a situation in which a
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Catalan society is deeply divided evenly
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split right apparently between these two
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options there is a lot of issues
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connected with this if there were an
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independent Catalonia I mean there's the
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membership in the EU this is assuming
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the Catalonia left which isn't we're not
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assuming that but if it did leave the
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membership in the EU using the Euro
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membership in NATO all of these things
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there's also a big issue about debt that
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Catalonia owns but hoes i should say but
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that's also tied in legally with with
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spain and spain's overall that could you
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talk about some of those issues well if
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a any part of an existing country where
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to become independent there's a you know
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a number of very difficult issues that
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need to be addressed one is there is
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dead as you said that may be attributed
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to the region but that that is actually
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right now dead of the entire country
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right but there's also resources right
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so those conversations those
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negotiations in any case not just in
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this case would be extremely difficult
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right because there are assets and there
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are liabilities and if there's a divorce
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you need to come up with some
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arrangement as to how you are dividing
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up not only the assets right but also
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the liabilities you know the issue of a
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european union membership and the issue
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of nato membership scythe inc those two
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are separate but
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I don't think they are as severe in this
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case as there would be in the Scottish
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case it's in the case of Scotland you
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won one has to remember is that most of
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the population in Scotland right is
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pro-european union right as it is in
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Spain and in Catalonia but if you go to
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England most of the population right a
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majority of the population is probably
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against membership in the European Union
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as you know Prime Minister David Cameron
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has promised and a referendum in the UK
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about EU membership right so that's one
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very big difference that is to say that
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if Scotland were to you know become
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independent in the UK right from the UK
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then probably England and Wales would
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leave the European Union because most
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people want to leave right but Scotland
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you know would become a member right how
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quickly it depends on how fast in
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Scotland we're able we'll be able to
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replicate the kinds of institutions that
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Europe expects you to have like a
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central bank like a you know all of the
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institutions of the of the of the state
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right in the case of Catalonia you know
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both are people living in Catalonia and
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people in the rest of Spain want to be
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part of the European Union so the issue
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there is would kind of lonely be ready
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right that would be the issue and the
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other issue of course is whether any
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existing member country with Vito right
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catalonia's membership because culinaire
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would need to apply and people are
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saying well Spain might veto it or
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somebody else my video Catalonia and
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that's obviously this thing possibility
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but what I think is very clear and you
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know this is not just an opinion of mine
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it's based on analysis right but of
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course there are other analysis that
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come to the opposite conclusion is that
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I think a separation of Catalonia from
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Spain would be at least in the short run
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right very harmful to both Spain and
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Catalonia right and I say this because
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obviously there is a very long shared
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history right but more importantly
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because it is still a fact that has been
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demonstrated by this election four days
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ago that the support for independence in
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Catalonia is at best half of
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half of the of the of the country right
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is half of the population so it's very
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difficult to set into motion a process
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of separation process for independence
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when you have fifty percent of the
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people living in that part of the
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country opposed to it the rifts the
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conflicts the frictions that these would
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create I think would be so severe that I
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think most reasonable people would think
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twice about the benefits from that sip
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and this is with in Catalonia so
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absolutely Catalonia you know the
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elections have demonstrated is divided
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now I would like to add another thing
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which is very important I think both the
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central government in Madrid and the
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Catalonian government with their actions
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have polarized public opinion and have
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polarized the voters as if there were
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only two choices right the two choices
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being things remain the same or
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Catalonia becomes independent and there
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is very good survey research indicating
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that if you offer catalonian people who
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live in Catalonia a third choice
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somewhere in between which is for
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example to renegotiate the way in which
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Catalonia relates to the rest of Spain
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or perhaps to create more of a federal
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system in space or Spain is not a
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federal country right like the United
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States or like Germany then if you offer
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that third intermediate choice then
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suddenly what you get is maybe twenty
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percent of people want independence
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twenty percent want the status quo but
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you have a large majority like sixty
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percent of the population who would
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rather take the third intermediate
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option so this is really interesting
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because I did want to get to the
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fundamental issue which is what is the
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big beef for those that want to become
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independent what is their chief
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complaint it has something to do with
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feeling that their region produces more
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tax per capita I guess than other
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regions so that they're giving the
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federal system more than they're getting
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back there's also i guess some
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historical reasons about how catalonia
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became part of spain to begin with which
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wasn't even all
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that long ago as I understand it and and
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there are some other thing so I did want
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to ask you what are the chief complaints
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for those that want to break away and
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then also may be compared as you did
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with with Scotland how the Catalonian
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system may be similar or different from
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say Quebec or maybe there's other
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aspects between the relationship of
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Scotland and England that you'd want to
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touch on all yeah absolutely so first of
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all I mean one has to be very respectful
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about you know people's identities and I
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think everybody has to respect that you
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know some people may feel more Catalan
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than Spanish or they may feel only
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Catalan right or they may feel Spanish
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but they also think that you know they
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they have a connection to Catalonia
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right so there's all sorts of identities
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and shared identities or dual identities
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that people have and I personally want
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to be like really respectful to all of
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them including you know the people who
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feel that colonial should be an
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independent country and they feel only
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Catalan you know the reality though is
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that those people are in the minority
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right that is the reality that is the
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fact that I think this election
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corroborates now having said that right
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there are also other more you know
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rational issues at play because identity
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is at the end of the day is an emotional
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issue but it should be respected right
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that's really important there's the
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money issue as you said so Catalonia is
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one of the three richest parts of Spain
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along with Madrid and the balearic
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islands which are on the Mediterranean
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well in every country in the world the
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parts of the country that are richer
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make a bigger contribution to the budget
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right just because they're Richard that
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happens in the united states california
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makes a bigger contribution than alabama
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right to the federal budget in the sense
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that they get back right in service is
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less than what they contribute in the
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form of taxes this happens everywhere
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right so the situation of Catalonia
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within Spain is different than the
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situation of Scotland in the UK because
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in Scotland because of the decline of
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manufacturing industry is not as rich as
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some other parts of England especially
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the london metropolitan area right and
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that's also the case in in canada with
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Quebec so the Catalonian case is
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different right so absolutely I mean
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catalonia is contributing more to the
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central budget but that's not
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necessarily because it is being
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discriminated against a lot of that are
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not saying that all of it but a lot of
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that is driven by the fact another
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Richard right and therefore in any
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political system in any arrangement
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right that you can find you will always
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see that Richard regions contribute more
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proportionally speaking than the amount
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of services or the value of the services
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that they get from the central budget
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right so I think that's important to
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clarify and having said that once again
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there are people who believe that
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California should be independent I think
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they are more driven by their identity
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and their sense of identity as opposed
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to by the numbers right although the
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numbers as they exist today accessor
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bait that feeling right that feeling of
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oh will contribute a lot but you see an
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independent Catalonia in the context of
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Europe right will also be richer than
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the average country in Europe so they
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would also make a net contribution to
00:12:02
the rest of Europe right and as you know
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Europe has very aggressive programs in
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place to help relatively backward parts
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of Europe cope with that backwardness
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and you know they get more money for
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investments in infrastructure and so on
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and so forth so Catalonia will always be
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because it reaches a successful you know
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country right it will always be a net
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contributor right even if it became a an
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independent state within within Europe
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two last questions what what do you
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think is most likely to happen realizing
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you gave the qualifier upfront that
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we're just after the election and the
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dust is settling so to speak and also is
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there a risk where i should say how big
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is the risk that over this debt issue
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it's a fairly substantial debt as i
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understand it and if there was some
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breakdown between spain and catalina
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could could that possibly lead to a
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financial crisis that would affect the
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rest of europe well I i think the you
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know once again even if there's no
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independence of Catalonia just the the
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messy political environment in which you
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know the relationship between Catalonia
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on the rest of Spain or the central
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government is in now I think is
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something that doesn't create the right
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conditions for investment that for job
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creation right the Spanish economy
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including catalonia's actually do
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quite well it is one of the fastest
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growing economies in Europe right now
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growing at slightly more than three
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percent right which is not bad given the
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circumstances so this uncertainty is
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going to be detrimental to economic
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growth and job creation but the other
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big thing that is coming up its end in
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December we have national elections in
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Spain so quite frankly I think the
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answer to your question as to what's
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going to happen next in Catalonia is
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that everything pretty much everything
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it's going to you know wait until you
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know the December election which is two
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and a half months away right and
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depending on the outcome of that
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election then we will see what's going
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to happen with the essentially this you
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know impasse that we have in Catalonia
00:14:02
this situation in which you have one
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half of Catalonia being in favor of
00:14:07
independence apparently right given the
00:14:09
election results and another have been
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opposed to it although remember that I
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said that if you're give them a third
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option the situation would change right
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but essentially there's two
00:14:18
possibilities here one is that the new
00:14:20
government emerging in Madrid will be
00:14:22
similar to the one that we have now
00:14:25
which as I told you earlier has been
00:14:27
trying to polarize the issue as if there
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were only two options right or there's
00:14:31
another possibility which is that a
00:14:33
different kind of government emerges and
00:14:35
is one that is willing to propose a
00:14:37
third intermediate option right and so
00:14:40
depending on the outcome of the national
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election in which actually Colonel
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O'Neill's will also get to vote then we
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will see you know things evolving in
00:14:48
Catalonia itself beginning in january
00:14:51
down the path of more conflict and more
00:14:53
friction and i think a continuing you
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know gridlock right because essentially
00:15:00
the two opposing views are very balanced
00:15:03
right or as an alternative you know they
00:15:07
will be down the path of maybe a
00:15:08
constitutional reform maybe very
00:15:11
extensive negotiations as to a
00:15:13
redefinition of how the not just
00:15:15
Catalonia but possibly also other parts
00:15:17
of Spain relate to the central
00:15:19
government and there is a lot of
00:15:21
discussion for example about taking some
00:15:23
steps towards a federal system alright
00:15:26
well we'll have to wait and see if it's
00:15:27
a happier new year there
00:15:29
in Spain and Catalonia thank you very
00:15:31
much for coming in thank you for having
00:15:33
me
00:15:49
you
