October 29, 2020

Catalonia is not going well


Madrid

Updated:

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When the stampede of Catalan companies began, pushed by the absurd plans of the process, many believed they saw in it the immediate collapse of the Catalan economy. Obviously no such thing happened, because a first phase is to move the registered offices, which is an administrative act with few consequences, a second that the fiscal domiciles leave, a movement that was more contained and a very different ending than the decision centers do. Furthermore, even though almost all companies have factories, they do not have wheels to move around and therefore divestment movements, when they happen, take years in materializing.

That reality produced a kind of irresponsible relief in the pro-independence forces, supposing that it was the evident demonstration that his absurd plans were harmless to his economy. Serious mistake. It is one thing that the movement is slow and another that it does not exist. The case of the Basque Country is very illustrative. In the hard time of ETA, investments fell and foreign investments fell with a crash. In 1975, 23 out of the top 100 Spanish industrial companies had their registered office or their main production facilities located in the Basque Country. Today, there are 5. It is a silent but constant process that Basque Country endures only in per capita terms and thanks to its poor demographic evolution.

The movement coincided there with the oil crisis. Now in Catalonia will coincide with the Covid-19 health crisis. I don’t know which one will be more damaging, but the figures show that, little by little, the inertia ball that represents the attraction of Madrid for the capitals and, more importantly, for the select gray mass, opens little by little but steadily a big gap with the rest and, especially, with Catalonia.

Not only is the GDP of the Community of Madrid already higher, but its growth rate is much more vigorous. The causes? Very easy. Investment flees from environments of uncertainty and political instability, and people are suspicious of and avoid sectarian environments, where political wants add up to more than academic merit.

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