Modern Spain dates from the end of the War of the Spanish Succession in 1715 and on Tuesday the government of the once independent Catalonia announced a plan for secession to end what its sees as 300 years of colonial rule from Madrid.

 

In the election in September pro-independence parties won 48% of the vote for the Parliament in the autonomous region and on Tuesday, Mariano Rajoy, Spanish prime minister, in a national television address (see picture above)called the secession plan an act of provocation that was “contrary to the constitution, the law, the feelings of the majority of Catalans and the democratic will of Spaniards.”

“Those who want to separate and divide Catalonia from Spain should know that they will not achieve this,” he said.  

Mauro Guillen, a management professor at the Wharton School of the University of Pennsylvania, who is a native of Spain, said after the Catalan election:

that although the [separatists] got a majority of the seats, they only got about 48% of the votes. And that is because the electoral law is such that the rural areas in Catalonia have an over-representation in Parliament relative to their population, whereas the greater metropolitan area of Barcelona, which includes many industrial towns around it, is underrepresented in terms of its population weight. But the nationalists, the independent movement, is stronger in the rural areas and the smaller cities than it is in Barcelona itself.

Also on Tuesday Spanish police raided more than a dozen houses and offices of the family of Jordi Pujol, who was the president of the Catalonia region in 1980-2013 and is alleged to have built up a huge fortune using the adjacent tax haven of Andorra for money laundering and tax fraud.

Catalonia accounts for 16% of Spain's population and about 20% of its gross domestic product.

In 2013 GDP per inhabitant was 111% of the EU 28 average compared with 83% in Mariano Rajoy's Galicia and 70% in the Andalucía region of the south where the official unemployment rate was nearly 35% earlier this year.

The biggest regional disparity in the EU is in Italy which we reported on here last August — the Mezzogiorno's employment rate (15-64 year olds) of 41.9% in 2014 was the lowest of any region in the European Union.

The Government of Catalonia or Generalitat de Catalunya was restored in 1931 and was again restored in 1977 after the end of the Franco dictatorship.

Belgium as an independent nation since 1831 comprises two diverse groups and a split shouldn’t surprise — in what other country could a leading politician mistake a foreign national anthem for his own country’s?

In 2007 Yves Leterme, head of the Flemish Christian Democrats and soon to be prime minister, when asked to sing the anthem, broke into France’s La Marseillaise.

He also didn’t know the reason for the date Belgium’s national day, saying it marked the “proclamation of the constitution.” It actually commemorates the inauguration of Leopold I as the country’s first king on 21 July 1831.

The French-speaking Wallonia region of the south accounts for about one-third of the population and while it's poorer than Flanders, the GDP per capita is above the EU average.

Wallonia was once the heartland of the country’s steel and coal sectors, both of which have declined in recent years.

Jacob Funk Kierkegaard, a native of Denmark and a senior fellow at the Peterson Institute for International Economics, a Washington, DC think tank, said in 2013:

The failure of national governments — as well as the European Union — to restore pre-crisis prosperity means that “many people are pissed off at their national governments.”

Uncertainty about the post-independence currency was a fatal flaw in the push for independence in Scotland and Catalonia as an independent country would not be admitted to membership of the European Union for several years and a standoff with Madrid, coupled with possible opposition from the ECB to the use of the euro, and the division of the national debt, against a backdrop of a fragile recovery, would not benefit either side. 

EU regions, GDP Catalonia Spain 

A Eurostat analysis shows that in EU member states with more than two regions, the widest disparities in wealth creation between regions from the same country in 2013 were recorded within the United Kingdom, as GDP per capita in Inner London was almost five times as high as in West Wales and the Valleys. There were also considerable differences within Romania (a ratio of 3.9 between the capital region of Bucuresti-Ilfov and Nord-Est), Slovakia (a ratio of 3.6 between the capital region of Bratislavský kraj and the eastern region of Východné Slovensko) and France (a ratio of 3.3 between the capital region of Île de France and the overseas South American region of Guyane).

By contrast, wealth creation was relatively evenly spread across the Nordic member states, Austria, Spain, Portugal and Greece. In each of these countries, average GDP per capita in the capital region was never more than double that recorded in the region with the lowest GDP per capita, as was also the case in Norway. Sweden was the only multi-regional EU member state to report that each of its NUTS (from the French version Nomenclature des Unités territoriales statistiques) level 2 regions had an average level of GDP per capita that was above the EU-28 average in 2013; the same was true for the level 2 regions in Norway.

Fast economic convergence is a myth in Europe and in emerging economies

Martin Wolf, the chief economics commentator of The Financial Times wrote in 2011 on long term solutions for the euro crisis:

Nor, as so many suggest, is some sort of fiscal union the answer. True, if creditworthy members were to transfer resources to the uncreditworthy on a large enough scale, the Eurozone might be kept together. But, even if such a policy could be sustained (which is unlikely), it would turn Southern Europe into a greater Mezzogiorno. That would be a calamitous outcome of European monetary integration.