Oriol Amat: ‘Catalan independence under EU tutelage is a feasible option’

Economist Oriol Amat, a Universitat Pompeu Fabra professor and member of the Catalan government’s Advisory Council for Growth and Economic Reactivation (CAREC), is number seven on the Junts pel Sí electoral list for Barcelona in the 27-S election. His selection as a candidate coincides with the reissue of the book ‘Economia de Catalunya: preguntes i respostes sobre la independència’ (The Catalan economy: questions and answers about independence), for which he was co-editor with Modest Ginjoan. This is a book that, if it were to find its way into every Catalan household, would probably entice many to vote for independence. Written by eighteen prominent economists not necessarily of separatist ideology, the book unpacks key issues regarding what an independent Catalonia’s economy would look like. The book’s main virtue is the wide range of issues it covers and the diversity of its authors. Its overall conclusion is clear: independence would benefit the Catalan economy.

—Why have you agreed to enter the political arena?
—On a personal level, this choice carries significant sacrifices, but they are more than compensated by the opportunity to serve the nation at such a difficult time. The support of my parents, wife and children, as well as the messages of hope and gratitude I’ve received from many friends and acquaintances have persuaded me that I’ve made the right choice. I have many friends in the rest of Spain, and I’m sure that when this is over, and ends well, they will also see that the sacrifice was worth it.

—What excites you about this new challenge? What do you fear?
—What is most important is to help the nation solve some of the big problems it currently faces and contribute to the welfare of the majority of the people. I am also very excited to be able to be in parliament at such a decisive juncture.

—One of the most striking data presented in the book that you co-edited is that independence would create between 51,000 and 70,000 new jobs
—Catalonia has a very low pool of civil servants. If we compare it, for instance, with that of Valencia, which has a population of two million, we find that they have more university professors, even if Valencia, proportionally, still has fewer university professors than the rest of Spain. Take any group: teachers, health care workers, and so on, and if you compare the figures, you find that the numbers are lower here. When compared with Europe, the numbers are similarly low. Only countries such as Romania or Bulgaria have fewer civil servants. If Catalonia became an independent state, we would need to create the state structures that we are currently lacking. Our book included research carried out by Pedrol, who analysed the data, ministry by ministry, and calculated how many people would need to be hired, based on the criterion of efficiency. Then comes the question of how to finance this. If you stop having a 16,000-million euro fiscal deficit, it means you have money to do things. The investment needed for the creation of new state structures has been estimated at 3,000-million euros, and part of this money would go to create these 70,000 jobs.

—What would happen with pensions?
—This is one of the issues where we see the most ignorance and manipulation. Keep in mind that the pension system in Spain is based on disbursement and not on capitalization. Therefore, the pensions paid each month to pensioners come out of that month’s contributions from active workers. The so-called reserve fund has money to cover pensions only for five months, and in recent years the funds have been drawn down because the system in Spain is pay-as-you-go. This means that if a person retires today, all of the contributions that he or she has made for decades are nowhere to be seen, because they were used to pay the pensions of retirees at the time. For pensions to be sustainable, the key is the ratio of workers to pensioners. And Catalonia has a higher proportion of contributors than pensioners, which makes pensions more viable.


—The book makes it clear that Catalonia should maintain the euro. Do you think that would be the case?
—Whenever surveys are conducted, Catalonia always comes out as one of the regions in Europe where the pro-European sentiment is strongest, something that is lacking in the UK, for instance. People here are very pro-European. This is a region that is economically viable and contributes to the rest of Spain and Europe. Also, Catalonia maintains a fiscal deficit with Europe.

—Really?
—Catalonia gets back from Europe 1,400 million euros less that it transfers to Europe. Miquel Puig and Jordi Galí, who analysed this topic for the book, concluded, based on solid arguments, that Catalonia would stay in the Eurozone and in Europe. There is no doubt about it. Bear in mind that no state is interested in having Catalonia outside the European Union, as there is nothing to gain from it and much to lose; let’s not forget the thousands of European companies that are based in Catalonia.

—Would independence under EU tutelage be a viable option?
—Independence with European Union tutelage would be an entirely feasible scenario. Probably, from a purely self-interested stance, it would be the best option for Catalonia. In our book, Antoni Castells considered this kind of relationship with Europe and pointed out that we must distinguish between two stages. The first is the present one, where Europe treats the conflict between Spain and Catalonia as an internal matter. But there is a second stage that would become inevitable if independence became a reality, and it has to do with the outcome of the 27-S election, after which Europe would step in and supervise independence. In this scenario, Castells suggest that the Catalan GDP would grow between one and two points just from gaining independence. But in the medium term, say, in about five years, the GDP would increase by about 7% annually. The Barcelona Chamber of Commerce also analysed this issue and it also found that in five years the GDP would increase by 7% annually.


—Unionists say that foreign companies will leave if independence is declared, but the facts seem to negate this view. What is your opinion?
—The Chamber of Commerce recently published a study that found that foreign investment continues to grow. This trend is continuing. In our book, we point out that there are 6,000 European companies in Catalonia, and many have their industrial base here. A company cannot simply pack up its factory and leave; perhaps a financial institution can do this, but industry does not work that way. They have invested many millions here and the reality is that they are continuing to invest. The conclusion is that the impact for companies would not be relevant.


—What do business owners think of independence? Is it a taboo subject?
—Big business owners are for dialogue and a negotiated solution. They would prefer for the situation to be resolved through negotiation, and they would be more supportive of a third way. If you look at small business owners, that is another matter—then you have surveys such as the one CECOT (the Catalan employers’ federation) conducted two years ago, which found that most of its members supported independence.

—Anton Costas, president of the Cercle d’Economia (an economic policy think tank) seems to be in favour of a third way
—I don’t regard Anton Costas as a big business owner, but as an authoritative voice that big business always pays attention to. The option he supports is dialogue and a third way. If this were a possibility, it would be a very sensible one.

—But it is not . . .
—No, and this was clearly depicted in a Farreres cartoon you reprinted. Catalonia’s relationship with Spain is very detrimental to its interests, and yet despite this burden it continues to grow; so if it gained independence, it would only grow faster. What happened when Finland gained independence from Russia? It went from being one of the poorest countries in Europe to one of the richest. It did well.


—Is the economic situation the main reason for the rise of the independence movement?
—One of the issues that made many people realize the impossibility of a reasonable solution to Catalonia’s problems was the ruling by Spain’s Constitutional Court. This ruling was a historic mistake that was an affront to the dignity of the Catalan people. Keep in mind that in our attempt to reform Catalonia’s Statute of Autonomy, every required procedure was followed (from the agreement in the Catalan Parliament; all of it to the agreements in the Spanish Congress and Senate; to the Catalan referendum, and so forth), to no avail. A collective that held a vote, reached agreements with the central government, and did everything by the book, yet in the end saw all the rules upended and nothing of what was said would be done actually happened . . . this is a major grievance, and the result is that nothing can remain the same.

—On the other hand, the argument that life for the average person will improve with independence has inspired many
—On 27-S, about 30% of people will vote for independence for emotional reasons; between 10% and 20% will vote against it for emotional reasons; and the remaining 50% to 60% of the population might actually take into consideration whether independence would bring economic improvement. Whoever argues this point more convincingly will win. On the other hand, we cannot forget the power of the media, and in this respect, it is a battle of David against Goliath.


—What would our banking system look like if we become independent?
—The banking system will depend on everything else. If Catalonia remains within Europe and the Eurozone, the banking system will continue operating as it has until now. What could happen is that there might be break-ups. For example, an insurance company based in Madrid and which has an important part of its business in Catalonia might conceivably chose to split into two companies. The opposite could also happen.

—Right now we have only La Caixa and Banc de Sabadell. Is that enough?
—That’s not bad at all. Some countries do not even have that. Our financial system is not bad. The key here is that everything should be done in an orderly fashion, consensually, and within Europe.

—Things can never be done consensually with Spain
—Everything depends on how the vote goes on 27-S. Since I am very optimistic, I am convinced that it will all end well—what I don’t know is how it will unfold or when it will end.


—After Denmark and Ireland came out in support of Catalonia we have sensed favourable winds in Europe
—Churchill said that international relations were the consequence of national selfishness. Each country has its own strategy—we must not lose sight of this fact.