A study concludes that Spain has no capacity to
overcome the crisis and is drawing
itself into economic breakdown
“There is no light for Spain at the end of the
tunnel” asserted economics Nobel prize winner Joseph Stiglitz. This has been
borne out by the Cercle Català de Negocis, the Catalan Business Circle in a set of Studies carefully analyzing
macroeconomic data on the Spanish State, collating forecasts made by
international bodies governing the global economy.
The resulting scenario is certainly distressing: in the current year,
2013, Spain has to place debt on the market equivalent to 20% of its GDP, a
figure that could go up to 114% of GDP by 2020 and reach 129% by 2030, according
to European Commission forecasts. This sustained increase of debt will bleed
all the investment potential of the Spanish State, which will have to
concentrate its efforts on satisfying all the resulting financial costs.
Furthermore, Spanish society is undergoing accelerated aging: by 2021
there will be 9.3 million people over 65. This means that pension expenditure
will go up from the current 10% of GDP until it reaches between 20% and 30% of
GDP by 2050.
A state with this kind of debt, suffocated by interest payments and
pension commitments, will hardly be able to find the necessary funds to fuel
its productive economy, which means keeping the same unemployment rate or even
making it higher. It is a vicious circle.
What horizon then for the coming decades? A persisting decrease of GDP per
capita that by 2020 will be five points lower that in 2005, and which in
twenty-years' time will drop 16 points; increasing emigration —the second wave in three generations— of mostly young people; and an increasing tax burden to be borne by the
remaining labor force. In 2010 there were four workers for each pensioner, but
according to estimations there will be only two in forty-years' time. The
conclusion is pretty obvious: Spain is heading for another default, the
twenty-fifth in its history.
A Catalan State, on the other hand, would be more than viable
economically. That is what numerous indicators point to and many international
experts certify. Some relevant data to back it up: in 2011 the balance of trade
stood at 3,9% of Catalonia’s GDP whereas in Spain they had a negative
-4,2%. An independent Catalonia would take fourth place in the European ranking
of GDP per capita.
The CCN goes further and maintains that Catalonia’s independence would act as a trigger for Spain. According to the CCN,
there are now two different economic models coexisting in the Spanish State
which are incompatible: the Catalan one,
based on flexible innovative SMEs
with great exporting capacity; and the Spanish model which is based on large
corporations operating mainly in regulated sectors and focusing their
international efforts on South-America.
Without Catalonia, Spain could fully develop its economic strategy, CCN
says, while also taking advantage of the infrastructures set up by the new
independent Catalonia in order to internationalize its economy.
The fundamental thing for the CCN is that Spain, without Catalonia, will
stop acting politically on economic matters (currently in constant conflict
with Catalonia as a region) and concentrate on reactivating its own economy.
Further information:
Andreu Mas, 677 225 051.
A/e: amas@nautiluscomunicacio.com
Núria Roura, 673 436 937.
A/e: nuria.roura@nautiluscomunicacio.com
To contact the CCN: comunicacio@ccncat.cat
Cercle Català de Negocis website: www.ccncat.cat
CCN Twitter: @CCatalaNegocis
CCN sustains that Catalonia’s independence will have a positive feedback on Spanish economy
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