Catalonia Would Weigh Independence Outside EU, Official Says

Catalonia, the most indebted of Spain’s 17 regions, would consider pursuing independence even if it’s denied membership in the European Union, the regional government’s chief of staff said.

“The people should decide whether they want to continue as they are now or not be part of the union,” Joan Vidal de Ciurana said in an interview with Bloomberg Television in Barcelona today. “The possibility of consulting Catalans, if the ballot shows a big majority, should be there.”

Catalonia holds early elections on Nov. 25 that may be a precursor to a bid for independence. Spain’s central government has said that any referendum would be unconstitutional. Spain would likely have the power to block any bid to join the EU. Catalonia, like Scotland vis-vis the United Kingdom, sees itself culturally different from Spain. The region also has its own language.

“If all doors are closed, maybe we should have a meeting in the Catalan parliament between Catalan parties to find the best way to continue this process,” Vidal said. “If the majority considers that the process should continue, we will continue, because it’s the mandate we’ll have been given by the people.”

Scottish Case

Should his Catalan nationalist party, or CiU, win the elections on Nov. 25 with a clear majority, Vidal said he expects the EU to enable Catalonia to maintain EU membership should it gain independence. He also said he expects Spanish Prime Minister Mariano Rajoy to agree to negotiations on a referendum that would “respect democracy” as occurred in the United Kingdom with Scotland.

British Prime Minister David Cameron and Scottish First Minister Alex Salmond agreed last month to a referendum on independence scheduled for 2014 and Scotland is now seeking legal advice on its EU status should it leave the U.K. Rajoy says the Spanish constitution doesn’t give him the leeway to allow a referendum on independence even though his People’s Party has an absolute majority in Parliament.

Catalonia will remain dependent on the central government for funding next year. The region, which has accepted emergency federal aid after being shut out of financial markets, already has a junk rating on its debt. Catalonia will need support from Madrid as long as the central government denies the region the right to manage the taxes it collects, Vidal said.

Seeking Investors

“If we have the possibility to become a state and to negotiate directly with the markets and present our own figures, the situation will change. The whole autonomous regions system doesn’t give us the real opportunity to go out and get the money from foreign investors,” he said.

Vidal said that the regional administration has received 28.6 percent of 5.4 billion euros ($6.9 billion) pledged from Spain’s 18 billion-euro regions fund set up to enable struggling states to redeem bonds and pay suppliers in the second half.

The Catalan government plans to use the remaining funds to pay off holders of so-called Patriot bonds, Vidal said.

“If Catalonia collapses, the whole of Spain collapses and it’s obvious that because the Spanish government has common sense it won’t allow it.” he said.

To contact the reporter on this story: Angeline Benoit in Madrid at abenoit4@bloomberg.net

To contact the editor responsible for this story: Tim Quinson at tquinson@bloomberg.net

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