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The open wounds of 1-O: why Catalonia still hasn't recovered its economic pulse five years after the illegal referendum

2022-10-03T07:43:17.220Z


The political crisis opened this week is another example of what investors like least: instability. The companies that fled after the 'procés' have not returned, attractive projects have been lost and the community has ceased to be the national economic locomotive


"Either you make independence or you call elections."

When the president of the Catalan National Assembly (ANC), Dolors Feliu, issued her warning on September 11, at the close of the massive demonstration of the Diada, those seven words not only resounded threateningly in the ears of the heads of the Government of the Generalitat, divided between the pragmatism of ERC, determined to leave behind the unilateral route, and the strategy of Junts, closer to the postulates of the ANC, to the point of generating this week the biggest political crisis of the current legislature.

They were also listened to carefully in the offices of the main companies,

More information

Junts remains in the Government waiting for the decision of the militancy

Five years have passed since that exodus and Catalonia continues to wait.

Politics continues to enter the thaw season and macroeconomic statistics seem to have shaken those turbulent months, but the companies that decided to leave have not returned.

The registrars spoke of almost 4,500 companies that decided to move to other Spanish cities, especially Madrid.

The Generalitat reduced that number to 2,500 changes of headquarters, assuming that it affected 3,700 companies with their own tax identification code (CIF), although the regional Executive claims to have no record of the displacement of any operating unit of the companies.

In an environment where discretion and behind-the-scenes movements predominate, hundreds of managers had no qualms about making their anger with the current policy visible and,

forcefully, to respond to what independentist leaders such as Carme Forcadell (former president of the Parliament and the ANC) had described as impossible, the massive flight from business headquarters.

In these five years there are hardly any companies that have embarked on the road back, in a period plagued by demonstrations linked to the

process

According to the president of the small and medium-sized Catalan companies (Pimec), Antoni Cañete, “as long as there is noise and uncertainty, money will continue to be frightened.

When the companies have the certainty of tranquility, that return will take place”.

He is one of those convinced that time will put things back in their place because "people don't want to have their heads and bodies separated", referring to the fact that the registered office is in a city while the center of operations is in another.

Sources close to the La Caixa Foundation, the entity chaired by Isidre Fainé that controls the Criteria Caixa group and its entire portfolio of investees, assure that the matter of returning the headquarters to Barcelona "is not on the table" at the moment.

The largest shareholder of CaixaBank was the figurehead of a business movement never seen before in Europe.

On October 7, it met its board of trustees and a majority of its members defended that the bulk of the companies it controlled as shareholders should move their headquarters outside of Catalonia.

He did it taking advantage of a decree approved

ad hoc

by the Government —then governed by the PP of Mariano Rajoy—, still in force today, which allowed that decision to be made without going through the shareholders' meeting.

As a consequence, the foundation and Criteria today have their headquarters in Palma de Mallorca;

CaixaBank, in Valencia;

Naturgy, Cellnex and Abertis, in Madrid.

legal insecurity

The decision was made alleging lack of legal certainty.

In the case of CaixaBank, to avoid the risk that the bank would be left out of the European Central Bank (ECB) system and, above all, due to the flight of deposits that they suffered: their clients withdrew from their current accounts a total of 7,000 millions of euros.

As a businessman explains under the condition of anonymity — like others consulted by this newspaper — “when the biggest companies leave, you get the feeling that you have to leave too”.

So it was.

Among the illustrious Catalan businessmen who participated in the stampede are Banco Sabadell, Colonial, Grupo Planeta, Catalana Occidente and Cementos Molins.

And hundreds of other large and medium-sized companies followed suit.

Of the Catalan corporations that were listed on the Ibex, only the Grifols plasma derivatives group held out in Barcelona.

Other big ones that chose not to move were Seat, Puig, Damm or Mango.

Of those who changed their registered office, none have returned to Barcelona due to the absence of factors that encourage their return.

“The circumstances do not exist”, argues a Banco Sabadell spokesperson, while from Naturgy they point out: “We do not comment”.

CaixaBank, since its merger with Bankia, the bank with the most business in Spain, is more forceful: "The headquarters of CaixaBank is in Valencia with an indefinite vocation."

As soon as Agbar recovered its old registered office, but not with the same assets with which it left, since a part remained in Suez Spain, its parent company, domiciled in Madrid.

More information

Caixabank and Sabadell suffered a flight of deposits of 11,600 million after 1-O

In macroeconomic terms, the effects for Catalonia have been controlled.

Both GDP and employment have evolved in parallel to those of Spain as a whole.

Despite the violent images projected by the media, from the charges of the Police in the voting centers on 1-O to the protests that followed the convictions of the independence leaders two years later, tourism -including business — has recovered.

The investments of subsidiaries of foreign companies present in Catalonia did fall in 2017 and 2018. And years before 1-O, some statistics such as those of the Catalan GDP per capita had already been deteriorating.

Alejandro Esteller, one of the few economists who have analyzed the possible economic consequences after the high point of the independence movement

(The Economic Costs of a Secessionist Conflict: The Case of Catalonia

, a book written together with Leonzio Rizzo), points out that the effects were short term and especially financial.

"Beyond psychological perceptions, no effects are observed," says the Professor of Economics at the University of Barcelona and a researcher at the Barcelona Institute of Economics.

His main conclusion is the effect of the flight of deposits from the banking sector, which his work quantified at a total of 33,000 million euros in the two quarters following the referendum.

In the same direction, the director of the economic situation of Funcas, Raymond Torres, points out that with the data in hand "nothing spectacular can be detected, at least nothing compared to that huge setback that had been predicted."

The economist does see nuances, however.

During the economic recovery after the health crisis, Catalonia has not grown as much as other communities, and the same has happened with Social Security affiliation.

But he maintains that the fundamentals of Catalonia remain the same: industrial capacity, great technological potential and Spain's main export force.

Catalan President Carles Puigdemont (right in the first row), applauds along with several members of Parliament on October 27, 2017, after the declaration of independence.

Burak Akbulut (Getty Images)

The big question remains whether under this supposed macroeconomic calm there is a background swell and if it is leaving consequences.

"If those who have the companies leave and take the headquarters, the money ends up leaving and the ability to decide ends up escaping," explains a veteran financier from his large office in the upper part of Barcelona, ​​referring to the risk that implies that the companies that left Catalonia end up normalizing their situation in their new destinations.

The context has changed substantially for some of them.

Using the cases of the La Caixa constellation: in the last five years, Naturgy's Madrid headquarters have gained considerable weight compared to Barcelona and foreign investment funds have gained weight in its share capital.

Abertis is now part of the Madrid-based ACS, and CaixaBank, after the merger with Bankia,

Five years ago, the way out was very easy;

today the return seems complicated, also due to the fear of a possible boycott effect in the rest of Spain motivated by political polarization.

And, as if that were not enough, in addition to the years of the

procés

, administrations such as the Generalitat itself or the Barcelona City Council are controlled by left-wing parties whose policies do not arouse sympathy among the business community either (in the case of Barcelona, ​​the employers Foment del Treball does not hide its confrontation with the mayor, Ada Colau).

The real estate and hotel sector suffers the restriction, for example, to launch new projects, and from the Consistory an investment was prevented to set up a franchise of the Hermitage Museum.

political distraction

The Secretary General of Industry, Raül Blanco, who knows the Catalan Administration well after working in the cabinet of the socialist José Montilla when he was president, detects three points that play against Catalonia because of the

procés

.

One is the structural one, “which leaves no trace in the short-term indicators, but which does weigh on the economic scenario that ends up developing 5 or 10 years later”.

This section would include the loss of decision centers.

Another point, Blanco defines it as that of "political distraction", in reference to the laws and policies that end up defining a certain model and that both in the Government and in the Catalan Parliament have been scarce in recent years.

Two examples would be the blockade of wind farms or the lukewarmness when it comes to promoting industrial policy.

The third plane is that of the comparison with other regions.

"There is no longer such a distance between Barcelona, ​​or Catalonia, with the rest of the communities," Blanco resigns, in a comment shared by other people consulted.

It is no longer just a question of competing with Madrid, but of avoiding, for example, that due to administrative procedures many companies in Lleida prefer to make investments in Aragon.

José Luis Bonet, president of the Spanish Chamber of Commerce and honorary president of Freixenet, has another more forceful way of saying it: "The leadership has been lost and now Catalonia is one among the crowd, when its vocation was to be a engine between the autonomous communities”.

A director of a Catalan company listed on the Ibex does not miss another question either.

It is what economists call the "opportunity cost", those resources that are not received because of certain decisions.

They are the benefits of investments that the

procés

left frozen, especially from multinationals installed in Catalonia.

Or the projects that could have been and that the uncertainty ended up parking.

Different projects appear in that folder.

The clearest is that of the European Medicines Agency, which ended in Amsterdam after a meeting in Barcelona revealed the differences between the central and regional administrations regarding the political future of Catalonia as a political subject.

There are also those who blame the violent protests of October 2019, when the prison sentences of Oriol Junqueras, Jordi Turull and the rest of the independence leaders became known, that one of the largest automotive investments in Europe (5,000 million euros) went to Berlin and not to Barcelona.

The electric car manufacturer Tesla had placed the Catalan province on its list of candidates and, according to some sources, had an advantage with its offer to locate those facilities in the municipality of Òdena.

And even linked to the political disorientation of the last decade is the closure of the Nissan factory or the fact that Catalonia, the locomotive of the automobile industry in Spain, does not yet have a battery cell factory project.

The Valencian Community has secured that of the Volkswagen Group, an investment of 3.

And another opportunity cost would be the distance between the political and business classes of the community, which left a clear sign during the merger of CaixaBank and Bankia: Pere Aragonès, the president of the Generalitat, did not know about those plans until the media published them. Communication.

On the other hand, this summer Barcelona has managed to secure the Mobile World Congress until 2030, one of the most valued global fairs, with an economic impact capacity of more than 250 million euros.

"If Fira de Barcelona is a thermometer, the influence that the political moment has had on this institution has not been relevant," explained the president of Fira de Barcelona, ​​Pau Relat, in a recent interview with EL PAÍS.

The Generalitat maintains that Catalonia has continued to win investments and that it is backed by the fact that the

Financial Times

considers it the best region in southern Europe to invest in.

Also that in the period 2014-2019 it achieved data on GDP, job creation, exports and foreign investment above the Spanish and European average.

“The

process

it has been very intense in passion and enthusiasm for millions of people, and in this sense it has probably generated emotional tear in many of them, due to the polarization and intensity, but economically it has not had negative consequences”, points out the current director of Economy of the Generalitat, Jaume Giró, who experienced from the front line the business actions of autumn 2017, when he was general director of the La Caixa Foundation.

Mònica Roca is the president of the Barcelona Chamber of Commerce.

A recognized independentista, she took office in the corporation after winning the elections —considered null by a court ruling— through Eines de País, a platform with which the ANC intends to achieve power in business institutions.

Roca admits that the flight of the companies will be a problem “if it continues over time”, but she is not in favor of taking actions that facilitate their return.

Nor of a reduction in the demands of the independence movement that would provide greater peace of mind to the Government of the Generalitat.

“I don't like that they left, but if we lowered our heads and said that we are no longer independentists, would they come back?

No, I think not".

A veteran director of the Ibex points out that, to reverse what happened in 2017, "the first thing that has to happen is that the companies want to return, but the idea of ​​returning also generates discomfort."

He refers to the feared boycotts by part of the population in the rest of Spain.

“I have told everyone, to [Pedro] Sánchez, to [Alberto Núñez] Feijóo: 'Go out and say that Catalan companies have to return home', explains Javier Faus, former president of the Círculo de Economía.

The institution played a special role in supporting the Government at the time it decided on the pardons, with the right-wing parties going against it.

Now there are not a few businessmen who demand the same support so that the companies can assume the return if the conditions make it possible.

Because, emphasizes Faus,

The president of the CEOE, Antonio Garamendi, gave this support on July 18 at an event at the Catalan employers' association Foment del Treball: “We are going to work together and one of the objectives must also be for Catalan companies to return home.

It is a commitment of all the stability of our country”.

His appearance was applauded, although other facts are demanded, such as that this new stage of relations between the Generalitat and La Moncloa could end with greater political stability and a financing system that fulfills some aspirations of the Catalan political parties.

The ways in which the Andalusian president, Juan Manuel Moreno Bonilla, presented the abolition of the wealth tax last week — "I tell Catalan businessmen that their land is here," he said in an invitation to mobilize tax domiciles — have not liked by Catalan employers, despite being in favor of lowering the tax burden.

But in reality what the Barcelona elites look at is the dynamism of Madrid, "the clearest reference", according to Professor Martí Parellada, of the Catalan situation.

Despite the fact that entities such as the Círculo de Economía have accused Madrid leaders of acting as a "vacuum cleaner" over other communities, taking advantage of their effect as capital.

Or that the Valencian Institute of Economic Research has denounced how its private economic initiative has been fed for years by the presence of public bodies in the city until reaching its current capacity.

The truth is that in 2018 Madrid surpassed Catalonia in GDP and became the locomotive of Spain.

As a Catalan bank manager says: “The looking over your shoulder is over”.

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Source: elparis

All business articles on 2022-10-03

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