One of the biggest fears surrounding the push for independence in Catalonia is how it might affect business. One consequence of last year’s political instability on business was the decision by some companies to relocate their corporate headquarters outside Catalonia.

Following the unilateral referendum on October 1, a domino effect could be discerned among many companies in Catalonia, with estimates a year later suggesting that altogether over 500 firms eventually moved their bases out of the country.

Yet, a series of reports by Catalan newspaper Ara show the Spanish authorities and even the crown were involved in pressuring firms to move away, including the state withdrawing huge amounts of public capital from two of Catalonia’s main banks. Just a day after the referendum, some 10 billion euros in capital deposited by public companies and authorities were withdrawn from CaixaBank and Banc Sabadell, in an orchestrated political attempt to punish the Catalan economy, maintains the newspaper.

Snowball effect

According to Ara, one businessman says that “Renfe, Adif, State Ports, RTVE, and others, withdrew 2 billion euros from Sabadell in a single day.” Another source is reported as saying that “the state agencies were the first to withdraw the money, and that created a snowball effect.”

The immediate result was that in the week following the referendum, CaixaBank’s assets lost 8% of their value, while Sabadell’s went down by 12%. Soon after, Sabadell said it was moving its headquarters to Alacant “to protect the interests” of its customers, shareholders and employers, while Catalonia’s biggest bank, Caixabank, announced it was moving its headquarters to Valencia.

Ara also says that before the referendum the Spanish authorities hinted that the capital would be withdrawn. Then Spanish treasury minister, Luis de Guindos, asked bankers: “Have you moved your HQs? Not to worry” and soon after the capital was redeposited with the banks.

Most large companies and foreign firms stayed

However, the Ara reports also point out that most of the companies that followed the banks’ lead in deciding to relocate their corporate bases elsewhere were small or medium-sized businesses. In fact, of the 100 firms in the country with the highest turnover, only 20 left.

Very few foreign firms based in Catalonia chose to leave. “Foreign companies are aware that abandoning Catalonia comes with a cost, because they know that leaving means the loss of many opportunities that are not easy to reproduce elsewhere” according to economics professor at Catalonia’s Open University, Josep Lladós.