MD: Control of money is a real big deal in all things political. An “uncontrollable” money is therefore anathema to all things political … especially governments. But it is wonderful for traders … like you and me.
As you read this article, consider how it would read if the Catalans were to first institute a competitive “proper” MOE process before attempting secession. Virtually all of the issues this article cites vanish when a “proper” MOE process is in place.
Remember, such a process is immune to political interference. If you want to affect it, you have to use force. And if it’s in general use, you probably can’t come up with that much force. Traders are far more powerful than the populace in general … which is peculiar because traders “are” the populace in general … there are just no borders when it comes to traders.
Catalans Think Twice About Risks of Rupture as Jobs ReturnBy
Support for independence falls to 35% from 49% in 2013
Threats to their interests give separatists pause for thought
Joan Boix has been attending separatist demonstrations in Catalonia for at least five years and he contributes to the campaign for a split from Spain.
But as the regional government in Barcelona girds its supporters for a final push that it hopes will deliver independence, the 62-year-old executive is hesitating. Hardliners talk of setting up a rogue Catalan tax agency or a general strike in order to force the issue. But Boix has a company to worry about.
MD: Set up a “competitive” proper MOE process. Let people gravitate to it. If you set up a tax agency, you are just playing into the hands of a “replacing” government … predictably made up of people ultimately unfriendly to traders and general trade.
“Most of the businessmen I know have to make debt repayments so an indefinite strike is a hard sell,’’ he said.
MD: Ah … but what if that debt was promised in HULs rather than your competitor’s controlled money? Then this would not be an issue at all. And you would not be talking about a strike … let alone an indefinite one. You would already have the existing government and its money changers on the ropes.
Regional President Carles Puigdemont is trying to increase his leverage as officials in Madrid vow to block his plans for a referendum in October. But the potential costs of a collision with the Spanish state are become clearer for Puigdemont and his supporters.
Two of Puigdemont’s senior aides were interrogated by Spain’s Guardia Civil last month and Prime Minister Mariano Rajoy has warned Catalan officials they could face criminal charges if they use public funds to facilitate the vote. Even the Catalan police, who Puigdemont wants to use to oversee the vote, may think twice — most of their salaries are paid from Madrid.
Rajoy on Wednesday called for Catalans to show “common sense” and “isolate the extremists and radicals who are today influencing the regional government.”
MD: Extremists and radicals … i.e those who “are not us”.
In the end, money worries may tip the balance against dramatic action for many Catalans.
MD: And there you have it. If a proper and competitive MOE process is in place, money worries are already dealt with. Nothing dramatic can happen with the money.
Spain on the Mend
Despite its distinct traditions and language, the idea of breaking away from Spain had little mainstream traction until the economic crisis — and the corruption it uncovered — hurt Catalans’ finances and undermined their confidence in the Spanish state.
MD: Said as if that won’t happen again. Government “is” the problem. Institute a competitive and “proper” MOE process, and let the government do the scrambling for survival.
Support for independence peaked at 49 percent in 2013, as the Spanish economy was contracting for a third straight year and unemployment reached a record 26 percent.
But Spain is on the mend now. Joblessness is down to 17 percent and the economy is growing at a pace of more than 3 percent. After a decade of turmoil, Catalan moderates are nervous about putting the recovery at risk.
MD: Oh really? What caused the economic collapse in the first place? What caused it to go away? You can be sure government manipulation played a role in both cases … and the sense of both is probably more related to propaganda than to reality.
Just 35 percent say Catalonia should be independent, according to the Catalan government’s polling agency. That’s the lowest in five years.
Investors are largely discounting the risk of a split. The spread between Spanish 10-year government debt and German bonds is close to its narrowest in seven years, though the yield on the Catalan government’s thinly traded 2020 bonds has jumped by about 50 basis points since the start of July.
MD: What are the “Catalan government’s” bonds? If they can create and sell bonds, they can institute and support a “proper” MOE process.
Puigdemont said in an interview last month that anyone who thinks an uptick in the economy will dampen the separatist movement is making a mistake, and warned investors that the movement may roil Spanish debt markets this fall. Others argue that Spain’s attempts at intimidation, including a smear campaign against Catalan leaders, will ultimately backfire.
MD: If you remove government from the equation, what are you separating from? The issue “is” government. As long as it is there, you will have an issue.
“If they were winning the political battle they wouldn’t need such tactics,’’ said Manel Escobet, 63, a member of the national secretariat at the Catalan National Assembly, a separatist campaign group. “The dirty war being conducted by the Spanish state is just helping us to broaden the support for us’’
MD: If you’re in an “all out war”, finess is not employed. You deploy all your weaponry. And such tactics are probably the most important weapon in the arsenal. People are putty in propagandists hands.
But even some of those who would be willing to strike accept that their chances of achieving their goals remain remote. Pere Gendrau, 36, runs a pub in Berga, just over an hour north of Barcelona and in the late 1990s he was active with the fringe groups that went on to form the anarchist group CUP, which Puigdemont’s mainstream alliance relies on for a majority in the regional assembly.
Gendrau says that he and his employees would find a way to support a general strike, an idea raised by Regional Vice President Oriol Junqueras as far back as 2013. But, like Boix, he can see the problem for those managing larger operations.
MD: What are they striking against? Themselves? Institute a “proper” money. Set up a minimal organization to deal with customary public issues … i.e. potholes … and then quit paying taxes to Barcelona.
“It could be the way to move forward, but we probably won’t reach that point,” he said. “I’m not so sure what the bigger companies’ reaction would be.’’
Boix’s company produces about 2 million wooden pallets a year for Catalan exporters and employs 130 people in the Bergueda region, where separatist parties got almost 80 percent of votes in 2015’s regional election.
The family history illustrates the sharp divisions that still lie beneath the surface of Spanish society. Boix’s grandfather, a Catalan mayor, died in a Nazi concentration camp at Mauthausen after fleeing to France during the Spanish Civil War. The French government has apologized to the family for the failings of the Vichy regime, but in Spain it’s more complicated, since Prime Minister Mariano Rajoy’s party was founded by a former minister from the Franco regime which governed for almost 40 years.
“In Spain it’s as if nothing ever happened,” he said. “Just in my family, 10 people fled across the French border, and only my mother and two others returned.’’
So the friction between Catalonia and Madrid may be as good as permanent. There are pockets of the region where almost everyone backs separatist parties. But the success of modern Spain since the dictatorship may be enough to keep the country together, and the economy growing, despite their differences.
MD: He who controls the money controls the playing field. Remove all control of the money and the playing field is level. Let the games begin.
Boix is happy to support a strike in favor of independence. But only so long as it doesn’t hurt his bottom line.
“If it’s being asked to stop for a day or two, that’s fine,” he said. “We’ll find a way to compensate by working through a public holiday.”
That’s probably not enough to force Rajoy into any dramatic concessions.
— With assistance by Charles Penty