Monday, October 29, 2012

The Independence Movement Grows ... Secession in Spain? Italy? Belgium? Europe as a Whole? ... Its Deeper Meaning

Spain is in deep trouble financially. In fact, its very existence as a sovereign nation is at stake.

So much so that its most financially viable region, Catalonia, may attempt to secede, and perhaps the Basque region will as well. But then, things aren't exactly going "swimmingly" in Italy or Belgium either, for that matter.

Europe as an entity is a myth, and it looks like soldiarity within many nations within Europe may be in serious jeopardy as well.

Some people in various regions of these nations believe they could function independently if on their own but don't believe the whole is viable. They're scared and angry at the same time.

While it's not precisely "everybody for himself," the movement does point out the vast differences between independence, dependence and interdependence. Independent people and groups choose to form interdependencies which enable each and all to become a stronger whole. It's a case where the sum of one and one equals more than two. On the other hand, dependencies always drain from the strength of the whole, making the whole's otherwise independent and interdependent pieces weaker.

{NOTE: Such as Illinois and California compared to Texas and North Dakota in our own country. Or the roles and relative strengths of the private and public sectors with respect to effciencies, waste and productivity gains. Post office and drivers' licensing bureaus versus UPS and Wal-Mart, for instance. For a look at the emphasis on productivity in the U.S. private sector, see A Part-Time Life, as Hours Shrink and Shift.}

But now let's return to what's happening in Spain and Europe.

Europe's Crisis Calls for a Breakup---of Spain has the developing story:

BARCELONA, Spain—This vibrant northern region of Catalonia has long been known as the "factory of Spain" for generating wealth that helped sustain the entire nation. Now Catalonia, beaten down by years of recession, has become the battleground in what threatens to become an economic civil war.

In protests large and small, hundreds of thousands of Catalans are embracing a stark proposition: Only by breaking ties with Spain and becoming an independent country can Catalonia free itself from economic malaise.

Catalans go to the polls Nov. 25 for a regional parliamentary election, and polls show pro-independence parties in front. . . .

Spain's internal struggle echoes a larger debate convulsing the euro zone itself, as wealthier northern nations complain about supporting poorer southern ones. But now, as Europe enters its fifth year of crisis, the economic strains are deepening the fractures within some nations.

In Spain and Belgium, and to a degree Italy, local and national governments are battling over how to allocate scarce resources. Even within Germany, which is economically stronger and politically stable, richer areas are grumbling about the cost of subsidizing the poorer areas. . . .

Cultural and linguistic variances within many EU countries only make matters worse. Catalonia itself is a prime example: Its own language is widely spoken and instilled in younger generations as the main language in most elementary schools. . . .

Catalonia's turmoil represents a major threat to European leaders' hope of containing Europe's crisis by stabilizing Spain, which is home to the euro zone's fourth-largest economy but is also vying with Greece for the highest unemployment rate in the euro zone, around 25%. Policy makers had hoped that EU aid would keep Spain afloat while investors digest losses in Greece, which is even more troubled.

Spain's financial markets are quivering at the mere talk of secession of Catalonia, which produces almost 19% of Spain's economic output and 21% of its taxes. Investors fear the revolt will undermine Prime Minister Mariano Rajoy's plan to get a grip on spending, particularly in the 17 regional governments that have been a big source of Spain's deficit.
If pro-independence parties triumph at the ballot box in next month's regional election, Catalonia's leader, Mr. Mas, will face pressure to make good on a vow to place an independence referendum before voters. National authorities say that would be illegal.

Mr. Mas studiously avoids the word "independence" to define his goal. Some analysts believe he would satisfied simply with a more favorable revenue-sharing deal. Meanwhile, impelled by swelling support for secession, he has become bolder, asserting publicly several times that "Catalans demand the instruments of State."

"We are convinced that an independent Catalonia is perfectly viable economically," says Albert Carreras, Catalonia's finance secretary. "Rather, we question whether Spain is viable if Catalonia were independent."

Further muddying the Spanish political picture, pro-independence groups in Basque Country—another region where separatist sentiment is strong—won control of parliament there in elections Oct. 21.

Outside of Spain, Belgium faces the biggest separatist strain. There, a vibrant separatist movement in the wealthier, Dutch-speaking Flanders wants to cut ties with poorer, French-speaking Wallonia. . . .

In Italy, as in Spain, the regional spats are partly rooted in precrisis deals that gave regional governments more spending authority, but without more responsibility to raise revenue, says Alberto Alesina, a Harvard University economist. "All that people are talking about are enormous scandals and wasting of money at the regional level," says Mr. Alesina. In Italy, he says, the south is the bigger culprit but says the north is hardly blameless. . . .

In Spain, financial woes are putting the union on the rocks. In August, Catalonia said it would seek a €5 billion bailout from the national government to make debt payments. Catalan officials say they would have no need for budget-cutting or bailouts if the central government were distributing tax revenue fairly. Some 43 cents of every euro Catalonia pays in taxes doesn't come home, according to data compiled by the Catalonia government.

Underlying the grievances is Catalans' image of themselves as a hardworking, thrifty people, "the Germans or Lutherans of Spain," says sociologist Enrique Gil Calvo, who was born in a neighboring northern region. Residents of Catalonia, about three-quarters of whom speak Catalan, are openly scornful of what they consider to be the indolence of southern Spaniards. . . .

As an independent nation, Catalonia would have GDP per capita of €30,500, which would rank it seventh in the European Union, just behind Denmark and ahead of Germany, Mr. Vallcorba's group says in its presentation. He adds that Catalonia's exports to the rest of the world recently surpassed its sales to the rest of Spain.

Spain's prime minister, Mr. Rajoy, termed the Catalan independence push "madness of colossal proportions" in a speech this month. . . .

Mr. Gay de LiĆ©bana adds that Catalonia would have to assume a reasonable share of Spain's national debt, perhaps as much as €200 billion. And he wonders whether the breakaway nation would ever be accepted into the EU, particularly in the face of certain opposition from Spain. "People would say we abandoned the ship when things got tough, instead of rowing together," he says.

As Spain's economy sinks further into recession, however, more people seem willing to take the plunge to independence. "There are many people who didn't favor independence a couple of years ago, who now view it as our only hope," says Laia Serrano, an economist . . . .

Catalonia is a big tax contributor to the central government. But officials in Barcelona complain the money isn't redistributed fairly. The annual deficit between what Catalonia pays in taxes and what it gets back from Madrid represents about 8% of Catalonia's total output, roughly €16 billion, Catalonian officials calculate.

Catalans complain that, as a consequence of underinvestment, their local roads and infrastructure is inferior to that in poorer parts of Spain."


Will Europe breakup?

Will Spain? Belgium? Italy?

In each case, the answer is probably not --- but that's not the real problem.

A society, any society, is made of up of many parts and seeks to achieve many things for its members. Each piece wants to become stronger as a result of joining together and thereby relinquishing some of its freedoms. Part of the societal pact is that each part will pull it own weight. By so doing, each component contributes to an overall stronger whole. Everybody wins.

In our own country, 13 individual states joined together primarily to promote a strong national defense. At the same time, individuals within those separate states wanted to retain as many of their natural freedoms as possible. So that became the basis for our nation's founding and governance system.

And still today, We the People people don't want to be treated unfairly by other members of our same society. Neither do states. Nor do we as individuals want to have to pay for an ineffective and wasteful government bureaucracy.

That's just the way of human nature. People are that way in Spain and elsewhere in Europe as well. We all want a fair shake, or as our current President Barack Obama likes to say, a fair shot.

In the end, the question always gets down to this "What's a fair shake or a fair shot?" And who determines that?

In America, We the People make that determination. It's our country.

Those in government work for us. That's why they're called "public servants."

Thanks. Bob.

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