Between the Sword and the Wall: Spain's Limited Options for Catalan Secessionism

Ryan D. Griffiths, Pablo Guillen and Ferran Martinez i Coma

No 2013-17, Working Papers from University of Sydney, School of Economics

Abstract: We propose a game theoretical model to assess the capacity of Catalonia to become a recognized, independent country with at least a de facto European Union (EU) membership. Support for Catalan independence is increasing for reasons pertaining to identity and economics. Spain can avoid a vote for independence by effectively 'buying-out' a proportion of the Catalan electorate with a funding agreement favorable to Catalonia. If, given the current economic circumstances, the buying-out strategy is too expensive, a proindependence vote is likely to pass. Our model predicts an agreement in which Spain and the European Union accommodate Catalan independence in exchange for Catalonia taking a share of the Spanish debt. If Spain and the EU do not accommodate, Spain becomes insolvent, which in turn destabilizes the EU. The current economic woes of Spain and the EU both contribute to the desire for Catalan independence and make it possibl e.

Date: 2013-09
New Economics Papers: this item is included in nep-eur
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