Again on the Catalonian secession and the EU, by Alberto Mingardi

October 17, 2017
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Many people have pointed out that the Catalonian secession can trigger an economic shock. The Catalonians say they want to stay in the European Union and keep the euro, but they can’t do so. If they secede, they’ll need to enter again the EU (and the euro) as an independent state. And Spain would likely veto them out of the EU.
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FT columnist Wolfgang Münchau wrote that “Catalan breakaway would make Brexit look like a cake walk“, arguing that the main argument against Catalan independence is thus economic.

It may be a matter of words, but I thought that the problem was not “economic.” Small states, if they’re open economies, can survive and prosper in an era of globalisation. A more extended division of labour doesn’t imply political unification, all the more so in an age when transferring information and traveling have never been faster and cheaper.

Rather the problem is political: that is, the European Union doesn’t allow for an ordered exercise of the right of self determination. You can consider this inevitable, if you think the EU is nothing but a cartel of states. But it is certainly in striking contrast with that principle of subsidiarity often hailed by the European founding fathers. Or at least so I’ve argued in a letter to the Financial Times:

Secession from Spain would trigger exit from both the EU and the euro, which may account for a global economic shock. In fact, the Catalans do not want to leave the euro or the single market: only Spain. And yet they’ll be forced out of European institutions because the latter are tailored around member nation states.

When you’re forced to do something you do not want to, it’s not economics, it’s politics. And, indeed, the main argument Mr Münchau refers to is not economic, but political. In a globalised world, smaller political units do not need to fear isolation as long as they are open economies. Smaller states are less likely to be tempted by protectionism as its cost will be higher for them.

The problem the Catalans are facing lies with the legal infrastructure of the EU. Though the EU’s founding fathers preached the principle of subsidiarity, they didn’t allow room for the principle of self-determination of peoples in the treaties. Perhaps it is the political problem that should be tackled, establishing ordered ways of exercising the principle of self-determination at least within the EU.

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