00:00:01
I'm happy to welcome back professor morrow Guillen and he's a management
00:00:05
professor here at Wharton and he's also a native of Spain which makes it especially appropriate because we want
00:00:12
to talk about the recent elections in Catalonia which many saw as a kind of proxy for an independence movement there
00:00:23
was a court decision in Spain last year which prevented a legal vote on independence as i understand it for
00:00:33
Catalonia nevertheless these regional elections which have just taken place we're viewed by many as a sort of Club a
00:00:39
site or a proxy of that and and could have had some sore could still have some serious ramifications so I wanted to ask
00:00:48
some thought there was going to be a clean outcome it didn't come out so clean or so clear so could you put it in
00:00:55
context and tell us it was a little bit messy and it's going to make the politics messy going yeah I think macys
00:01:01
the word although as you know the mock receipts are always missing right but I think the outcome of these particular
00:01:06
election is especially messy and of course you know this is only three days after the election has taken place so
00:01:12
you know one also has to be careful about over interpreting the results because we don't know exactly what kinds
00:01:18
of conversations and the coalition building efforts are being made by the various parties right depending on their
00:01:25
seats in parliament i also want to clarify one important thing which is that i was born in spain but I've side
00:01:30
of Catalonia although my father was from Catalonia so I don't claim though to
00:01:35
represent both sides of the issue and you know i think in Spain and Catalonia everybody in the world is always
00:01:42
differences of opinion and there's a diversity of views right but yeah the outcome is messy because on the one hand
00:01:48
what you have is that the parties that were that proposed a independence for Catalonia won a majority of the seats
00:01:57
but there are two parties there there were two lists competing for seats and they don't entirely agree as to what the
00:02:04
process should be moving forward right that's one of the problems here the other is that although they got a
00:02:11
majority of the votes the only of I'm sorry of the seats the only got about forty eight percent of the
00:02:17
votes and the reason for that is that the electoral law is such that the rural areas in Catalonia have an over
00:02:25
representation in Parliament relative to their population whereas the greater metropolitan area in Barcelona which
00:02:32
includes many industrial towns around it iced under represented in terms of you know its population wait but the
00:02:39
Nationalists the independent movement is a stronger in the rural areas in the smaller cities than it is in Barcelona
00:02:45
itself so the result is very messy and I think it is fair to say that you know the last couple of years have you know
00:02:53
resulted in a situation in which a Catalan society is deeply divided evenly split right apparently between these two
00:03:03
options there is a lot of issues connected with this if there were an independent Catalonia I mean there's the
00:03:12
membership in the EU this is assuming the Catalonia left which isn't we're not
00:03:17
assuming that but if it did leave the membership in the EU using the Euro membership in NATO all of these things
00:03:24
there's also a big issue about debt that Catalonia owns but hoes i should say but
00:03:32
that's also tied in legally with with spain and spain's overall that could you
00:03:37
talk about some of those issues well if a any part of an existing country where to become independent there's a you know
00:03:46
a number of very difficult issues that need to be addressed one is there is dead as you said that may be attributed
00:03:54
to the region but that that is actually right now dead of the entire country right but there's also resources right
00:04:02
so those conversations those negotiations in any case not just in this case would be extremely difficult
00:04:08
right because there are assets and there are liabilities and if there's a divorce
00:04:12
you need to come up with some arrangement as to how you are dividing up not only the assets right but also
00:04:17
the liabilities you know the issue of a european union membership and the issue of nato membership scythe inc those two
00:04:25
are separate but I don't think they are as severe in this case as there would be in the Scottish
00:04:31
case it's in the case of Scotland you won one has to remember is that most of
00:04:37
the population in Scotland right is pro-european union right as it is in Spain and in Catalonia but if you go to
00:04:45
England most of the population right a majority of the population is probably against membership in the European Union
00:04:51
as you know Prime Minister David Cameron has promised and a referendum in the UK
00:04:56
about EU membership right so that's one very big difference that is to say that
00:05:01
if Scotland were to you know become independent in the UK right from the UK then probably England and Wales would
00:05:10
leave the European Union because most people want to leave right but Scotland you know would become a member right how
00:05:15
quickly it depends on how fast in Scotland we're able we'll be able to replicate the kinds of institutions that
00:05:22
Europe expects you to have like a central bank like a you know all of the institutions of the of the of the state
00:05:29
right in the case of Catalonia you know both are people living in Catalonia and people in the rest of Spain want to be
00:05:37
part of the European Union so the issue there is would kind of lonely be ready right that would be the issue and the
00:05:44
other issue of course is whether any existing member country with Vito right catalonia's membership because culinaire
00:05:50
would need to apply and people are saying well Spain might veto it or somebody else my video Catalonia and
00:05:56
that's obviously this thing possibility but what I think is very clear and you
00:06:00
know this is not just an opinion of mine it's based on analysis right but of
00:06:05
course there are other analysis that come to the opposite conclusion is that I think a separation of Catalonia from
00:06:11
Spain would be at least in the short run right very harmful to both Spain and Catalonia right and I say this because
00:06:19
obviously there is a very long shared history right but more importantly because it is still a fact that has been
00:06:28
demonstrated by this election four days ago that the support for independence in
00:06:34
Catalonia is at best half of half of the of the of the country right is half of the population so it's very
00:06:42
difficult to set into motion a process of separation process for independence when you have fifty percent of the
00:06:51
people living in that part of the country opposed to it the rifts the conflicts the frictions that these would
00:06:58
create I think would be so severe that I think most reasonable people would think
00:07:05
twice about the benefits from that sip and this is with in Catalonia so absolutely Catalonia you know the
00:07:12
elections have demonstrated is divided now I would like to add another thing which is very important I think both the
00:07:19
central government in Madrid and the Catalonian government with their actions have polarized public opinion and have
00:07:26
polarized the voters as if there were only two choices right the two choices being things remain the same or
00:07:35
Catalonia becomes independent and there is very good survey research indicating that if you offer catalonian people who
00:07:45
live in Catalonia a third choice somewhere in between which is for example to renegotiate the way in which
00:07:51
Catalonia relates to the rest of Spain or perhaps to create more of a federal system in space or Spain is not a
00:07:57
federal country right like the United States or like Germany then if you offer that third intermediate choice then
00:08:04
suddenly what you get is maybe twenty percent of people want independence twenty percent want the status quo but
00:08:10
you have a large majority like sixty percent of the population who would rather take the third intermediate
00:08:17
option so this is really interesting because I did want to get to the fundamental issue which is what is the
00:08:27
big beef for those that want to become independent what is their chief complaint it has something to do with
00:08:32
feeling that their region produces more tax per capita I guess than other regions so that they're giving the
00:08:40
federal system more than they're getting back there's also i guess some historical reasons about how catalonia
00:08:47
became part of spain to begin with which wasn't even all that long ago as I understand it and and
00:08:54
there are some other thing so I did want to ask you what are the chief complaints
00:08:58
for those that want to break away and then also may be compared as you did with with Scotland how the Catalonian
00:09:06
system may be similar or different from say Quebec or maybe there's other aspects between the relationship of
00:09:12
Scotland and England that you'd want to touch on all yeah absolutely so first of
00:09:16
all I mean one has to be very respectful about you know people's identities and I
00:09:21
think everybody has to respect that you know some people may feel more Catalan than Spanish or they may feel only
00:09:27
Catalan right or they may feel Spanish but they also think that you know they they have a connection to Catalonia
00:09:35
right so there's all sorts of identities and shared identities or dual identities
00:09:40
that people have and I personally want to be like really respectful to all of them including you know the people who
00:09:45
feel that colonial should be an independent country and they feel only Catalan you know the reality though is
00:09:51
that those people are in the minority right that is the reality that is the fact that I think this election
00:09:57
corroborates now having said that right there are also other more you know rational issues at play because identity
00:10:04
is at the end of the day is an emotional issue but it should be respected right that's really important there's the
00:10:10
money issue as you said so Catalonia is one of the three richest parts of Spain along with Madrid and the balearic
00:10:16
islands which are on the Mediterranean well in every country in the world the parts of the country that are richer
00:10:22
make a bigger contribution to the budget right just because they're Richard that
00:10:28
happens in the united states california makes a bigger contribution than alabama
00:10:31
right to the federal budget in the sense that they get back right in service is less than what they contribute in the
00:10:38
form of taxes this happens everywhere right so the situation of Catalonia within Spain is different than the
00:10:44
situation of Scotland in the UK because in Scotland because of the decline of manufacturing industry is not as rich as
00:10:53
some other parts of England especially the london metropolitan area right and that's also the case in in canada with
00:10:59
Quebec so the Catalonian case is different right so absolutely I mean catalonia is contributing more to the
00:11:06
central budget but that's not necessarily because it is being discriminated against a lot of that are
00:11:10
not saying that all of it but a lot of that is driven by the fact another Richard right and therefore in any
00:11:16
political system in any arrangement right that you can find you will always see that Richard regions contribute more
00:11:22
proportionally speaking than the amount of services or the value of the services
00:11:26
that they get from the central budget right so I think that's important to clarify and having said that once again
00:11:32
there are people who believe that California should be independent I think they are more driven by their identity
00:11:39
and their sense of identity as opposed to by the numbers right although the numbers as they exist today accessor
00:11:48
bait that feeling right that feeling of oh will contribute a lot but you see an independent Catalonia in the context of
00:11:55
Europe right will also be richer than the average country in Europe so they would also make a net contribution to
00:12:02
the rest of Europe right and as you know Europe has very aggressive programs in place to help relatively backward parts
00:12:11
of Europe cope with that backwardness and you know they get more money for investments in infrastructure and so on
00:12:16
and so forth so Catalonia will always be because it reaches a successful you know
00:12:20
country right it will always be a net contributor right even if it became a an independent state within within Europe
00:12:29
two last questions what what do you think is most likely to happen realizing you gave the qualifier upfront that
00:12:36
we're just after the election and the dust is settling so to speak and also is
00:12:41
there a risk where i should say how big is the risk that over this debt issue it's a fairly substantial debt as i
00:12:47
understand it and if there was some breakdown between spain and catalina could could that possibly lead to a
00:12:53
financial crisis that would affect the rest of europe well I i think the you know once again even if there's no
00:13:00
independence of Catalonia just the the messy political environment in which you know the relationship between Catalonia
00:13:07
on the rest of Spain or the central government is in now I think is something that doesn't create the right
00:13:12
conditions for investment that for job creation right the Spanish economy including catalonia's actually do
00:13:17
quite well it is one of the fastest growing economies in Europe right now growing at slightly more than three
00:13:22
percent right which is not bad given the circumstances so this uncertainty is going to be detrimental to economic
00:13:30
growth and job creation but the other big thing that is coming up its end in December we have national elections in
00:13:36
Spain so quite frankly I think the answer to your question as to what's going to happen next in Catalonia is
00:13:41
that everything pretty much everything it's going to you know wait until you
00:13:47
know the December election which is two and a half months away right and depending on the outcome of that
00:13:53
election then we will see what's going to happen with the essentially this you
00:14:01
know impasse that we have in Catalonia this situation in which you have one half of Catalonia being in favor of
00:14:07
independence apparently right given the election results and another have been opposed to it although remember that I
00:14:12
said that if you're give them a third option the situation would change right
00:14:16
but essentially there's two possibilities here one is that the new government emerging in Madrid will be
00:14:22
similar to the one that we have now which as I told you earlier has been trying to polarize the issue as if there
00:14:29
were only two options right or there's another possibility which is that a different kind of government emerges and
00:14:35
is one that is willing to propose a third intermediate option right and so depending on the outcome of the national
00:14:42
election in which actually Colonel O'Neill's will also get to vote then we
00:14:46
will see you know things evolving in Catalonia itself beginning in january down the path of more conflict and more
00:14:53
friction and i think a continuing you know gridlock right because essentially the two opposing views are very balanced
00:15:03
right or as an alternative you know they will be down the path of maybe a constitutional reform maybe very
00:15:11
extensive negotiations as to a redefinition of how the not just Catalonia but possibly also other parts
00:15:17
of Spain relate to the central government and there is a lot of discussion for example about taking some
00:15:23
steps towards a federal system alright well we'll have to wait and see if it's
00:15:27
a happier new year there in Spain and Catalonia thank you very much for coming in thank you for having
00:15:33
me you