Capital Economics, a leading "independent" houses of analysis used to make decisions for investment funds from the City of London believes that " the enormous costs that would make it unlikely Catalan independence secession".
"Independence would be negative for Spain.
Catalonia has 16% of the Spanish population, but accounts for 19% of GDP and 25% of exports.
Also it contributes disproportionately to the collection of taxes , 21%.
If Catalonia were independent, Spain would have a greater fiscal deficit to finance and business and consumer confidence could deteriorate ".
In a note to clients, Capital Economics said that "a unilateral declaration of independence after the October referendum could destabilize the economies of Catalonia and Spain .
Therefore, along with the political and legal barriers to secede, it is likely that an agreement is reached to give more autonomy to Catalonia ".
But Catalonia also would stop well as Stephen Brown , an economist for southern Europe of Capital Economics .
"Often it is argued that the region would be more prosperous if it becomes independent. The logic is that the current budget deficit of Catalonia than 1% of GDP would become a surplus of 5% without having to make transfers to Spain. But we must remember that Catalonia is one of the most indebted regions.
In case of an agreement with Spain [to separate], Catalonia would have to take their share of the debt of the central government.
If this deal was based on GDP, Catalonia would end up with a debt to GDP of 115% to 100% -superior whole of Spain. As the cost of Catalan bonds is higher than that of the Spaniards, this could negate any gain to transfers. "
Apart from the negative impact prosecutor could have secession, "Catalonia could keep the euro but could lose the benefits to its members. For example, lose the ECB as lender of last resort, so reserve requirements of the banks should be high. This could lead to higher interest rates and reduce lending. "
If Catalonia is separated unilaterally and does not accept assume part of the debt of all Spain , the consultant warns that "Catalonia would not achieve the recognition of the international community, would cease to be a member of the EU and would join the short list of countries that are not in the World trade Organization (WTO), so it would face significant barreas trade.
External demand would fall, unemployment would rise and the imports would become more expensive. In other words, living standards would deteriorate ".
All these negative consequences make Capital Economics relies on an agreement between the two sides. But he admits that " it is difficult to predict this process, which is based on political ideology rather than the economy."
The widespread view in the City is that the referendum will not lead to independence in the short term, but several analysts of investment banks believe that the political tension between the central and governments Catalan can lead to an increase in the risk premium of Spain the uncertainty of the conflict in the medium term, reports Expansion.
