When Rich Places Want to Secede

The crisis kicked off by Catalonia’s contested October 1 secession vote has come to a head. Following police violence, imprisonments, and mass protests, Spanish Prime Minister Mariano Rajoy announced last weekend that he would pursue Article 155 of the Spanish Constitution to replace Catalonia’s leaders and impose direct rule over what is the country’s most productive region. On Friday, the Spanish parliament approved the measure, just after its Catalan counterpart formally declared independence.

A major reason cited for the crisis? As Catalan protesters cried, “Madrid nos roba”—“Madrid is robbing us”—by which they mean the federal government is taking more than it gives in transfer payments. Catalonia, the northeastern region that includes Barcelona and holds 16 percent of the Spanish population, accounts for about a fifth of Spain’s $1.2 trillion economy and about a quarter of all Spanish exports and industry. Most crucially, it pays Madrid $12 billion more in taxes per year than it gets back.

As a relatively rich region with its own independence movement, Catalonia's not alone: A small set of secession movements in historically productive areas, most visibly in Europe, say they’d be better off on their own, and more are pointing to Catalonia's example to regain momentum. Belgium’s Flanders region, one of the birthplaces of modern commerce and the host to a separatist party that made gains after the global financial crisis, boasts a GDP per capita 120 percent higher than the EU average. If the German state of Bavaria were its own country, as the Bavarian Party wishes, its economic output would crack the top 10 of EU member states, according to its government. And last weekend, two deep-pocketed northern Italian regions that are home to each Milan and Venice passed nonbinding referenda for greater autonomy. In Europe, resentments of paying to cover less productive countrymen are longstanding, but recently they seem to have intensified as a swirl of nationalist sentiments has swept the continent.

The common wisdom used to be that separatist movements mostly came from weak minorities that rallied around racial or ethnic injustices. “With globalization, that changed significantly,” said Andrés Rodríguez-Pose, a professor of economic geography at the London School of Economics (LSE). “Virtually everywhere in the world,” movements have swapped out the “identity card” for the “economic card.”

Erin Jenne, a professor of international relations at Central European University, agrees. Economic inequality is one of a few factors that can keep independence movements simmering, but they won’t boil over without a catalyst—usually some external circumstance like a major political crisis, or an offer from another country to provide military support to a region with separatist aspirations, she said. After all, inequality between regions is baked into the entire concept of modern nationhood—if subsidizing poorer parts of a country were motivation enough to split off, every region would have done it by now.

Last weekend’s referenda in Italy’s regions of Lombardy and Veneto show how these economic tensions seldom come free of matters of ethnic identity. The initiatives, which more seek financial autonomy than outright secession, are sponsored by the Northern League, a populist anti-immigrant party. Paolo Grimoldi, a League official, said the regions were tired of “giving 80 billion euros [each year] to the state coffers.” Politico has argued that the votes were a symbolic tribute to a northern Italian dream of the ’90s: a fully seceded, Celtic-inflected ethno-state called Padania that would cut the dead weight of “Roma ladrona”—“Thieving Rome.”

But movements to secede can be a gamble. Independence talk in places like Quebec and Catalonia has historically made businesses and consumers feel queasy—after pro-secession parties took action, the regions have seen relocations of corporate headquarters, and even drops in home prices in Quebec and bank deposits in Catalonia. Plus, there are economic perks to staying together: Trade is easier across internal borders, and diversified regions diffuse risk.

Catalonia, for example, has built up some of its own institutions, but it has a long way to go before it has all the systems of a national government, and the limited evidence that exists suggests secession doesn’t necessarily fling open the gates of economic growth. A huge portion of Catalonia’s trade is either domestic or with the European Union, says Rodríguez-Pose, of LSE. If the region were to break off, not only would Spain lose 20 percent of its GDP overnight—Catalonia could see, Rodríguez-Pose says, “rapid impoverishment” depending on the scale of conflict.

Jenne, of Central European University, has published research indicating that economic issues are often not as strong of motivators as other factors, such as how densely a group is concentrated in its territory, or whether a region eager to split off is offered military support by another nation. But that doesn’t stop groups all over the world from using regional inequality as a negotiating tool. The U.S. has seen it, too: In February, California argued that its role as a “donor state”—that it sends more money to the federal government than it receives—gave it leverage over the Trump administration’s threats to withdraw federal funding following its actions to declare itself a “sanctuary state” for immigrants. California is indeed a “donor,” but not by much: The state gets 99 cents back in federal spending for every dollar it contributes through taxes, below the nationwide average of $1.22. There’s an initiative in the state to put secession on the ballot in 2018, and Silicon Valley floats talk of breaking off to form an independent nation (sometimes literally floating).

Similarly, after Brexit, the Texan Nationalist Party pushed to mimic the U.K. Independence Party’s tactics, billing Texas’s $1.6 trillion economy as the “World’s 10th Largest.” Texan lawmakers, though demurring on secession, started to adopt the economic language of the fringe group.

Of course, there have been hundreds of these movements in American history, and few expect these recent ones to amount to much. Calls for secession happen for all sorts of reasons, and rarely gain majority support—although Catalonia’s vote overwhelmingly passed, it drew just 43 percent of eligible voters, with many opponents staying home.

Still, “you never really know what you’re going to get when you enter into these negotiating processes,” said Jenne. She pointed to the relatively peaceful “Velvet Divorce” between the Czech Republic and Slovakia in 1993. Slovakia, the weaker region, was “absolutely shocked” when the Czechs bought into their calls for secession, she said. After the decade or so it took the weaker Slovakia to recover, “it has done relatively well,” said Rodríguez-Pose. “So it can happen.” But that’s about as good as can be hoped, he said: “If secession takes place with conflict, then recovery times are much, much worse—and it can take a generation, if not longer.”

Crackdowns like Spain’s can risk inflaming that sort of conflict, and Catalonia’s push for independence likewise threatens its economic well-being. Movements around the world are watching Spain in the coming days to see just how just how the crisis unfolds—and whether their turn could be next.