Doing A Deal With The Enemy...May Pay Off Big For Catalonia

Until Mar. 3, the mayor of Vic, Jacint Codina, rarely heard a dissenting voice from the 120,000 inhabitants of this town in deepest Catalonia. Shrouded by mist in a volcanic mountain range an hour's drive from Barcelona, Vic embodies Codina's brand of conservative Catalan nationalism. A grand central square and the surrounding latticework of narrow alleyways are a reminder of the glorious Middle Ages, when Catalonia was independent from the rest of Spain. Half a millennium later, grocers' shops on every street corner, replete with Vic's specialty, the cured sausage called fuet, show just why the Catalan coalition, Convergence and Union (CiU), is labeled the "shopkeepers' party."

But in the past three weeks, even the sausage sellers have been heckling Codina. "When I walk out of the town hall into the square, people shout to me: `No pacteu!' [Don't negotiate]," he complains.

CONTAGION. Codina and his party have a problem. In the March Spanish elections, narrowly won by the rightist Popular Party, the CiU took 16 seats and became the power broker in the Madrid parliament. It's not the first time Spain's governability has been dependent on the Catalan nationalists. Before the vote, the CiU, under its shrewd leader Jordi Pujol, held up a minority Socialist government, risking contagion from endless scandals. Now, though, the dilemma is even greater. The CiU is being asked to prop up a government headed by a party considered in deep Catalonia to be a direct descendant of the Francisco Franco dictatorship, which fiercely repressed Catalonia's autonomy and even its language. In Vic and towns like it, mustachioed PP leader Jose Maria Aznar is referred to as Charlot--that is, Charlie Chaplin--or worse. "We think Aznar is a bit of a fascist. He doesn't like Catalans," says Juan Barnils, owner of fuet maker La Vigatana.

The strange bedfellows, however, look as if they'll wind up married. The CiU and the PP actually agree on many economic issues, both being pro-business parties committed to fiscal reform, cutting marginal tax rates, and slashing the cost of laying off workers. Among the Catalans' goals in the talks will be due respect for their language, fiscal decentralization, and more local control over the police. So while Vic's shopkeepers hate the idea of a pact, bigger business in Barcelona is pulling out the stops to bring Pujol and Aznar together. Josep Pique, head of the Catalan business lobby Circulo Economico, says he's sure a deal will be cut. "The Socialists solved two of the historic problems that sparked the Civil War in 1936: the political role of the Catholic Church and massive social inequality. One remains: the eradication of territorial tensions. Who better than the Castilian right to do that?" he asks.

But in Vic, it will take some time for the idea to sink in. Which is why all of Spain's political leaders have advised against rushing the talks. Late April looks like the earliest time for a PP-CiU pact. "Easter week will be a busy negotiating time," says Pique. "Which at least goes to show Spain has won the religious battle."


Catalonia's shopkeepers have already reaped benefits from their role as power brokers. In return for supporting the Socialists from 1993-96, the CiU won backing for the Commerce Law, finally enacted in January, which bars large retailers from opening on Sundays and holidays, slaps limits on when stores can hold sales, and bans below-cost pricing. Liberals, both in the Socialist Party and the PP, were shocked to see the rollback of measures taken years before to loosen up retailing. The president of Spain's Tribunal for the Defense of Competition called the new law a step backward. Spain's hypermarket chains, most of them French giants such as Pryca and Alcampo, announced they would scale down their investment in Spain because of the law.

In Vic, the "hypers" had never been welcome. "We certainly haven't made it easy for them," says Mayor Codina. What was little Vic's weapon against the mighty French? Zoning restrictions--another form of regulation the TDC has criticized as inefficient and inflationary. Land prices in Spain, even in provincial towns such as Vic, are puzzlingly high, given low population densities. But Catalan shopkeepers are happy with the law--so who knows how hard a bargain they'll drive this time?

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