Spain descends into deeper chaos as economic woes worsen

October 14, 2012 – SPAIN – On a recent day in Barcelona, the capital of northeast Spain’s Catalonia region, José Maria Borras and his lifelong friend Antonio Canosa sip coffee in the same square where they went to grade school. The two retirees — both in their mid-60s — grew up under Spain’s military dictator Francisco Franco, who prohibited the Catalan language, festivals and any talk of independence. “It’s been a long struggle for freedom,” Borras says. “Back in those years, if you were in this very schoolyard speaking Catalan you’d be punished.” Now these two friends chatter away in their native tongue, in a square adorned with Catalan flags. Canosa chimes in. “The Franco years were bad for us. Then finally democracy arrived, and we had some good years,” he says. “But now the economy has brought back another form of tyranny — budget cuts from Madrid.” Spain’s dismal economy has residents of Catalonia, the country’s richest region, wondering once again if they’d be better off going it alone. With their own language and distinct culture, Catalans have long felt different from Spain. Now, during one of the worst moments in Spain’s economic history, Catalans are renewing efforts to make independence a reality. The economic crisis has exposed what Catalans see as a flaw in Spain’s tax system. Rich regions like Catalonia pay more, and that money is spread around Spain. But now with Madrid short on cash, Catalan taxes are paying central government salaries and rising interest on Spanish debt. Catalonia gets less back in return to pay its own bills. The region is bankrupt along with five others, all asking for bailouts from Madrid, of all places. Catalan President Artur Mas told reporters last month he wants to renegotiate that tax system — or else he’ll push for independence from Spain. “If there is not an agreement on the economic basis, you know that the way of Catalonia for freedom is open,” he said. Mas has called for early elections next month, seen as an unofficial referendum on secession — something Madrid calls illegal. The Spanish Constitution doesn’t say what happens if one region wants to break away. More than 1.5 million people flooded Barcelona for an independence rally last month. If Catalonia became a sovereign country, it would have an economy the size of Portugal’s. But Catalans need to proceed with caution, says economist Morten Olsen, at IESE Business School. –NPR