WEBVTT - Creating Catalonia From Scratch 0:00:00.120 --> 0:00:04.680 How do you create a state from scratch? Secession can 0:00:04.760 --> 0:00:07.520 feel pretty good, and every nation needs to have a 0:00:07.600 --> 0:00:12.280 sense of itself, its identity and where it comes from. 0:00:12.280 --> 0:00:16.280 But that doesn't make a state. Currency needs to be 0:00:16.360 --> 0:00:20.360 issued and printed. Revenue needs to be collected, Bills need 0:00:20.400 --> 0:00:24.079 to be paid, Armies need to be raised at a 0:00:24.079 --> 0:00:28.280 more mundane level, Trash needs to be collected. How does 0:00:28.360 --> 0:00:32.840 all this stuff get done and how many breakaway movements 0:00:32.920 --> 0:00:37.920 actually give it much thought. Catalonia, a region of Spain 0:00:38.159 --> 0:00:40.640 that's seeking to go its own way, is a good 0:00:40.680 --> 0:00:54.080 case study. Welcome to Benchmark, a show about the global economy. 0:00:54.320 --> 0:00:57.960 I'm Daniel Moss from Bloomberg View in New York, and 0:00:58.000 --> 0:01:01.560 I'm Scott landman and economics editor with Bloomberg in Washington. 0:01:02.240 --> 0:01:05.760 The plumbing of a potential news state, how the machinery 0:01:05.840 --> 0:01:09.640 of government would actually work might seem pretty mundane in 0:01:09.680 --> 0:01:13.160 the midst of a heady nationalist campaign, but it's the 0:01:13.240 --> 0:01:18.559 stuff that determines whether a country succeeds or fails. Joining 0:01:18.640 --> 0:01:21.920 us is Maria today O, a Bloomberg News reporter who 0:01:21.959 --> 0:01:27.080 has been covering the Catalan independence scene. And Max seems Spy, 0:01:27.200 --> 0:01:31.960 an economist for Bloomberg Intelligence in London. Let's bring in 0:01:32.000 --> 0:01:35.840 Maria first, where she is on the scene in Barcelona. Maria, 0:01:36.080 --> 0:01:38.959 there's been a lot of developments on this story lately, 0:01:39.000 --> 0:01:40.800 but if you can just take a step back and 0:01:40.840 --> 0:01:43.800 sit and and tell us a little bit about why 0:01:44.280 --> 0:01:49.440 the Catalans, or why Catalonia wants to declare independence, or 0:01:49.480 --> 0:01:52.200 why they're moving in this direction or they have been 0:01:52.200 --> 0:01:54.960 moving in this direction for several years. A lot of 0:01:54.960 --> 0:01:57.240 people would tell you to have to do with identity, 0:01:57.480 --> 0:01:59.120 how to do with the fact that they have their 0:01:59.120 --> 0:02:01.720 own language, their own history, and the fact that it's 0:02:01.720 --> 0:02:05.720 always been a very distinct region within Spain to this 0:02:05.840 --> 0:02:07.680 ghost center is back, So a lot of people would 0:02:07.720 --> 0:02:10.280 tell you that's where it starts. Having said that, you'd 0:02:10.280 --> 0:02:12.680 also get an argument that, you know, there's kind of 0:02:12.720 --> 0:02:15.240 started in two thousand six when they were meant to 0:02:15.240 --> 0:02:17.840 have new regional powers and a new regional kind of 0:02:17.960 --> 0:02:21.120 framework for the way regional powers are inactive in Spain, 0:02:21.560 --> 0:02:25.560 and then uh that prompted a backlash from Madrid who said, look, 0:02:25.560 --> 0:02:28.160 they're going too far. They're kind of presented themselves as 0:02:28.160 --> 0:02:31.520 a nation and we have to water down to the bill, right, 0:02:31.760 --> 0:02:33.079 So a lot of people will tell you that's when 0:02:33.120 --> 0:02:35.760 it started, and obviously the real frustration kicked out in 0:02:35.880 --> 0:02:38.880 two thousand and twelve, when obviously the crisis in Spain 0:02:38.960 --> 0:02:41.960 really began to fight, and it began to fight hard 0:02:42.080 --> 0:02:45.240 and the Catalan administration's pockets. Now, they would tell you 0:02:45.280 --> 0:02:47.200 this is unfair for us because we pay a lot 0:02:47.240 --> 0:02:50.480 of taxes to Madrid, which then get distributed to the 0:02:50.480 --> 0:02:52.320 rest of Spain, but we don't get a fair deal 0:02:52.400 --> 0:02:54.960 because we're putting way too much money in Then we 0:02:55.400 --> 0:02:58.200 get back in terms of infratchurch to expending and more 0:02:58.240 --> 0:03:00.200 investment in the region. So a lot of people tell 0:03:00.240 --> 0:03:02.480 you have to do with history, but also the fact 0:03:02.480 --> 0:03:05.760 that there's been a series of maybe political issues lately, 0:03:05.800 --> 0:03:07.840 and obviously the fact that there was a crisism. This 0:03:08.040 --> 0:03:11.920 is a man it's very essence question about money. Now, 0:03:12.040 --> 0:03:17.000 there are many parts of individual countries that have unique culture, 0:03:17.440 --> 0:03:21.000 unique language, unique way of looking at the world. That 0:03:21.080 --> 0:03:24.840 alone doesn't give you the building block of a state. 0:03:25.400 --> 0:03:28.360 You can see yourself as a nation, but you also 0:03:28.480 --> 0:03:31.520 need to have a state. How much thought has gone 0:03:31.520 --> 0:03:34.920 into what the state would look like and how it 0:03:34.920 --> 0:03:38.800 would work. That's a great question. And in fact, you 0:03:38.840 --> 0:03:41.040 can look at Spain and see other regions that also 0:03:41.120 --> 0:03:44.200 have their own language, that also have their own history, 0:03:44.560 --> 0:03:47.040 and that you know, have had a very strong regional 0:03:47.040 --> 0:03:51.200 identity for century. So obviously within Spain, Catalonia is not 0:03:51.280 --> 0:03:53.440 an exception. You can say there's other regions that also 0:03:53.520 --> 0:03:56.040 are the same case would apply. Now the question is 0:03:56.360 --> 0:03:58.760 how do you become a state and most brutantly, who 0:03:58.880 --> 0:04:02.640 is getting to recognize your state? Well, so far Catalonia, 0:04:03.080 --> 0:04:06.320 you know, there's basic infrastructure and basic structures that they 0:04:06.480 --> 0:04:09.360 lack and they've admitted to this, like having their own 0:04:09.360 --> 0:04:12.880 tax agency. The money the taxes are collected to the 0:04:13.080 --> 0:04:16.520 central government's tax agency, so again that's something that Madrid 0:04:16.560 --> 0:04:18.800 has powers over. Then you know, if you look at 0:04:18.800 --> 0:04:21.760 things like territorial and border control, that's something that Madrid 0:04:21.800 --> 0:04:24.560 has control over. So again it's a question of do 0:04:24.600 --> 0:04:27.479 you have the fundamental infrastructure that you need. The Catalan 0:04:27.480 --> 0:04:30.120 government will tell you we do. However, they've never been 0:04:30.160 --> 0:04:32.240 tested or friend to the test, so there are question 0:04:32.279 --> 0:04:35.560 marks to whether they would ever work. So I, as 0:04:36.040 --> 0:04:39.719 an Australian and an American, if I wish to travel 0:04:39.880 --> 0:04:43.520 to the country to the state of Catalonia. Do I 0:04:43.600 --> 0:04:46.800 need a visa? What currency should I take with me? 0:04:47.160 --> 0:04:50.440 What's the banking system like? Do they have any relationships 0:04:50.480 --> 0:04:53.679 with banks here in the United States? Has anyone thought 0:04:53.720 --> 0:04:57.839 about this? Yeah, that is a good point, and essentially 0:04:57.839 --> 0:05:00.640 what the Catalan government will tell you. It's like, there's 0:05:00.680 --> 0:05:02.159 no way we're going to get kicked out of the 0:05:02.200 --> 0:05:04.400 European Union. We're going to get to give the euro 0:05:04.520 --> 0:05:06.480 and you won't need a password to get in and 0:05:06.480 --> 0:05:10.400 out of California because we would be a European country. 0:05:10.800 --> 0:05:13.360 Now the point that here is no one from the 0:05:13.360 --> 0:05:17.960 European Commission, which is you know with obviously exercises power, 0:05:18.040 --> 0:05:19.679 has come out and said this would be the case. 0:05:19.720 --> 0:05:22.360 In fact, we're a getting the opposite, the commissioners saying, 0:05:22.400 --> 0:05:24.880 look as a dance the law that prevails in the 0:05:24.880 --> 0:05:27.840 Spanish Constitutional Court and and we don't think this is 0:05:27.839 --> 0:05:30.279 a valid rerough erendum. Again, this all goes back to 0:05:30.400 --> 0:05:33.440 the very basics of it, is this a legal vote? 0:05:33.440 --> 0:05:36.040 And as do they have legal mandate? So far we 0:05:36.160 --> 0:05:38.800 don't think that's the case because no one has recognized this, 0:05:39.320 --> 0:05:41.600 and have they put tho into this. Yes, But again, 0:05:41.680 --> 0:05:43.880 what you hear from the Catalan administration is that they 0:05:43.920 --> 0:05:46.840 think life would go on as normal as they're guarantee 0:05:46.880 --> 0:05:49.000 that that would be the case at this point, not really. 0:05:49.160 --> 0:05:53.920 If Catalonia were actually to become independent from Spain, given 0:05:54.160 --> 0:05:56.880 catalonious role in the Spanish economy, like you were just 0:05:56.920 --> 0:06:00.400 talking about, you know, it's basically a more prosperous area 0:06:00.480 --> 0:06:03.720 than the rest of the country, would it be pretty 0:06:03.720 --> 0:06:08.839 devastating for the economy of the rest of Spain. Yeah, 0:06:08.839 --> 0:06:12.039 I would obviously have an impact on the Spanish economy 0:06:12.080 --> 0:06:14.040 and sent there's no no one can deny that business, 0:06:14.040 --> 0:06:18.159 the powerhouse economy, their rivals Madrid essentially and the bad 0:06:18.240 --> 0:06:21.320 country too, And obviously it would have an impact on 0:06:21.440 --> 0:06:24.799 the broader nation, there's no question. But again the question 0:06:24.839 --> 0:06:27.680 markets what could happen to an endependent Catalonia. You need 0:06:27.720 --> 0:06:29.680 to keep in mind that a lot of the businesses 0:06:29.760 --> 0:06:32.440 that you know are based in Catalonia actually do a 0:06:32.480 --> 0:06:34.440 lot more business with the rest of saying that they 0:06:34.520 --> 0:06:37.760 do with you know, inside Catalonia. And also this opens 0:06:37.800 --> 0:06:40.760 up a broader question, which is, well, they get to 0:06:40.920 --> 0:06:43.760 keep the same trade relationship with the European Union if 0:06:43.760 --> 0:06:46.080 they were to separate and that is obviously a much 0:06:46.120 --> 0:06:48.839 bigger question. Now you can live without Spain, but without 0:06:48.839 --> 0:06:51.880 access to the European market, that's a much broader issues, 0:06:52.760 --> 0:06:56.280 right because Catalonia would be a separate country. Therefore it 0:06:56.320 --> 0:07:00.359 would have to go through EU entry procedure is and 0:07:00.600 --> 0:07:02.840 until that time it would not be in the EU, 0:07:02.960 --> 0:07:06.440 which means they can't use the Euro, which means they 0:07:06.480 --> 0:07:09.600 don't have a trade relationship in the Single Market, which 0:07:09.640 --> 0:07:11.880 means they have to use the w t O, which 0:07:11.920 --> 0:07:14.760 means they'd be subject to tariffs. What will they call 0:07:14.840 --> 0:07:17.680 their currency? Who will run their central bank? I just 0:07:17.760 --> 0:07:21.320 get the impression no one's really thought with any intellectual 0:07:21.400 --> 0:07:25.600 rigor about this. Well, that's a good point, and again 0:07:25.680 --> 0:07:28.360 it's a it's a question that you're never actually able 0:07:28.400 --> 0:07:31.240 to get a clear answer from the Catalan administration because 0:07:31.240 --> 0:07:35.040 they insist that there's going to be no need to 0:07:35.080 --> 0:07:37.480 return back to an old currency. Again, if you remember 0:07:37.560 --> 0:07:41.080 before the europe Catalonia has a Spanish perseta. So the 0:07:41.160 --> 0:07:43.160 question is would you go back to an old Spanish 0:07:43.240 --> 0:07:45.880 currency or would you create your own? And the factor 0:07:46.040 --> 0:07:49.600 is in the Canal administration doesn't really have answers to 0:07:49.600 --> 0:07:52.080 these questions because they always insist we're not going to 0:07:52.200 --> 0:07:54.640 get get out and we're not going to be forced 0:07:54.640 --> 0:07:56.160 out of the years, and so we're going to get 0:07:56.160 --> 0:07:58.840 to keep the euro. Obviously, when you look at the 0:07:58.960 --> 0:08:02.120 market reaction and businesses here, they think the answer may 0:08:02.120 --> 0:08:04.320 not be as clear cut, which is why we got 0:08:04.320 --> 0:08:07.280 more than twenty companies leaving the region since the referendum 0:08:07.320 --> 0:08:09.800 take place, and why two of the region's biggest banks, 0:08:09.840 --> 0:08:12.520 Cash A Bank and Sava Day decided to move their headquarters, 0:08:12.680 --> 0:08:14.640 like if they wanted to send a strong message to 0:08:14.680 --> 0:08:17.080 the market that no matter what happens, we're going to 0:08:17.200 --> 0:08:19.680 be a US and bank backed up by the European 0:08:19.760 --> 0:08:22.560 central banks. Precisely because we don't have a concrete answer 0:08:22.640 --> 0:08:24.520 on this, and what would happen if you're trying to 0:08:24.560 --> 0:08:27.360 have this conversation with the people in the square waving 0:08:27.360 --> 0:08:31.120 the flags, carrying the candles, what's a central bank, what's 0:08:31.120 --> 0:08:34.400 the currency, what's a tax? Exactly? This is this is 0:08:34.440 --> 0:08:38.719 a very emotional uh topic of conversation here in Catalonia. 0:08:38.800 --> 0:08:41.480 There are people who would say, look, we have obviously 0:08:41.480 --> 0:08:43.080 it's not going to be easy, but we think we 0:08:43.080 --> 0:08:45.040 can get it done. And again go back to the 0:08:45.040 --> 0:08:47.079 point that we're not going to get it out from 0:08:47.080 --> 0:08:49.720 the European Union. Some other people just don't question it. 0:08:49.760 --> 0:08:51.880 They think, look, it's it's it's not going to be fine. 0:08:51.920 --> 0:08:54.000 And actually, if we did have to play a price, 0:08:54.040 --> 0:08:55.400 it might be worth it. You know, we're going to 0:08:55.440 --> 0:08:57.480 be an independent nation and this is what we want. 0:08:57.920 --> 0:09:00.240 It might mean the yet times again if you're rough, 0:09:00.360 --> 0:09:02.679 but actually it's worth it in the end. There are 0:09:02.720 --> 0:09:06.200 some others today, especially the business community doesn't certaintly. We 0:09:06.280 --> 0:09:08.719 don't like it. There's lack of clarity, we don't like it. 0:09:08.960 --> 0:09:11.679 And again the business community reached out to the cattle 0:09:11.720 --> 0:09:14.520 Original president Carlos such A mornents that we need to 0:09:14.559 --> 0:09:16.680 find a middle way to get uh, you know, an 0:09:16.720 --> 0:09:20.240 altitude this issue and the cattle in issue, because again 0:09:20.320 --> 0:09:23.640 for the business community, it's really not clear cut. The 0:09:23.720 --> 0:09:27.040 business would go on as usual. Maria. It's an interesting 0:09:27.080 --> 0:09:30.160 story with many more dimensions than we can even cover 0:09:30.320 --> 0:09:32.560 on day to day basis. Thank you so much for 0:09:32.720 --> 0:09:34.800 taking the time to talk with us. I'm not to 0:09:34.880 --> 0:09:38.760 worry any time. Let's go now to maxim As Bohy. 0:09:39.000 --> 0:09:43.640 He's an economist with Bloomberg Intelligence in London. Maxine, thanks 0:09:43.640 --> 0:09:46.120 for joining us today. Thank you for inviting me. I 0:09:46.200 --> 0:09:49.040 read a piece that you and your colleagues at BI 0:09:49.160 --> 0:09:54.400 wrote recently and pretty down bet on how Catalonia would 0:09:54.720 --> 0:09:58.120 function or the challenges that they would face as an 0:09:58.160 --> 0:10:01.280 independent nation. You I was really struck by a line 0:10:01.320 --> 0:10:05.680 that you said that Catalonia could find itself combining trade 0:10:05.800 --> 0:10:09.760 arrangements worse than those of post Brexit Britain, with a 0:10:09.800 --> 0:10:14.120 monetary system more like Kosovos. That doesn't sound too good. 0:10:14.160 --> 0:10:16.439 Can you tell me a little bit more? It sounds 0:10:16.480 --> 0:10:18.720 a bit scary, yes, indeed. Um, So in this piece, 0:10:18.760 --> 0:10:21.760 what we did is actually trying to see what an 0:10:21.800 --> 0:10:26.040 independent Catalonia would look like economically. So our central scenario 0:10:26.240 --> 0:10:30.040 is that Catalonia won't declare independence, or as soon as 0:10:30.040 --> 0:10:33.160 they really do, the Spanish governments in Madrid is going 0:10:33.200 --> 0:10:35.800 to say his power by triggering Article on the fifty 0:10:35.880 --> 0:10:38.360 five of the Spanish Constitution. But in this piece, what 0:10:38.400 --> 0:10:42.719 we wanted to see is if Catalonia wins independence, how 0:10:42.800 --> 0:10:45.120 is it going to look like on an economic angle? 0:10:45.520 --> 0:10:49.920 And since they would probably exit the Eurozone, the European 0:10:50.040 --> 0:10:54.400 Union and they have no World Trade Organization membership, they 0:10:54.400 --> 0:10:58.800 would from day one, end up having no regulation, having 0:10:59.320 --> 0:11:02.480 no possibility teas of actually doing trade with the rest 0:11:02.559 --> 0:11:05.319 of the world. They would lose all the membership cards 0:11:05.360 --> 0:11:09.200 that Spain enjoys, and this would amount to being like 0:11:09.280 --> 0:11:11.640 in a situation like cost of all because of is 0:11:11.679 --> 0:11:14.360 using the Euro as a currency, but it's absolutely no 0:11:14.480 --> 0:11:18.079 influence on the monetary policy of the Eurozone. And at 0:11:18.080 --> 0:11:22.280 the same time, Brexit would actually be quite similar in 0:11:22.320 --> 0:11:24.880 a sense that all these trade agreements would from the 0:11:25.040 --> 0:11:28.200 one just disappear and you would end up having to 0:11:28.240 --> 0:11:31.960 go to the World Trade rules. But again Catalunia doesn't 0:11:32.200 --> 0:11:35.640 belong to the World Trade Organization, so even that would 0:11:35.679 --> 0:11:40.320 be not available for them, Unlike Brexit. The United Kingdom 0:11:40.360 --> 0:11:44.120 of Great Britain and Northern Ireland is a country that exists. 0:11:44.160 --> 0:11:46.120 It's a member of the u N, it's a member 0:11:46.120 --> 0:11:47.760 of the i m F, it's a member of the 0:11:47.800 --> 0:11:53.320 World Bank. It's a thing exactly. There is no country Catalonia. 0:11:53.600 --> 0:11:57.800 So they're much worse. If they go their own way 0:11:57.920 --> 0:12:01.360 then the UK is now that's truth. They would they 0:12:01.360 --> 0:12:05.840 would have basically no international statues. There's a lot of 0:12:05.880 --> 0:12:07.960 state that. I mean, if you look at Kosovo, for 0:12:07.960 --> 0:12:09.839 example that happened two thousand and eight in the still 0:12:10.240 --> 0:12:14.160 the vast majority of states don't recognize Kosovo Catalunia. It 0:12:14.160 --> 0:12:16.440 would be it would be probably the same thing. They 0:12:16.440 --> 0:12:19.120 would have to go through a very long process if 0:12:19.120 --> 0:12:21.480 they if they would like to re enter the European Union, 0:12:21.520 --> 0:12:23.480 if they would like to re enter the euro Zone, 0:12:23.760 --> 0:12:26.280 you lose access from one day to the other, but 0:12:26.280 --> 0:12:29.960 then it takes years, I mean really years. Bulgaria, for example, 0:12:30.000 --> 0:12:32.720 has been waiting since two thousand seven to enter the 0:12:32.760 --> 0:12:35.679 euro Zone. So it's a very long process that you 0:12:35.679 --> 0:12:39.079 would have to go through. As soon as you declare 0:12:39.080 --> 0:12:42.679 independence from Spain. Have the people in California, or at 0:12:42.720 --> 0:12:46.559 least the leaders that are sort of pushing the independence movement, 0:12:46.679 --> 0:12:49.600 do they have this infrastructure set up already for the 0:12:49.640 --> 0:12:52.040 state ready to go if they declare independence or are 0:12:52.080 --> 0:12:55.280 they basically starting from scratch if if they were actually 0:12:55.280 --> 0:12:59.280 to become independent from Spain. So that's that's a good question. 0:12:59.320 --> 0:13:02.080 I think I think we should ask them the question. Obviously, 0:13:02.400 --> 0:13:04.440 I don't think that the state is fully prepared to 0:13:04.480 --> 0:13:07.160 do that, and I don't think that the citizens, when 0:13:07.160 --> 0:13:11.280 they voted in this very controversial referendum that the citizens 0:13:11.480 --> 0:13:15.959 exactly know what was at stake here. Declaring independence is 0:13:16.000 --> 0:13:18.360 one thing, but then telling the citizens if we do that, 0:13:18.679 --> 0:13:22.280 you will lose maybe your currency, you will lose, all 0:13:22.280 --> 0:13:25.040 the trade agreements, you might lose also obviously the all 0:13:25.040 --> 0:13:28.320 the travel freedom in Europe. I think there's much more 0:13:28.400 --> 0:13:30.760 at stake than what was on the ballot. And this 0:13:30.840 --> 0:13:33.320 is also why it's very controversial in Catalonia this referendum. 0:13:33.360 --> 0:13:37.120 The fact that only participated and the fact that there's 0:13:37.160 --> 0:13:41.839 a minority maybe or fifty fifty of the population that 0:13:41.880 --> 0:13:47.080 doesn't want independence. Right now, that's a revelation. The impression 0:13:47.200 --> 0:13:52.840 one gets from watching international TV channels, reading international newspapers 0:13:53.040 --> 0:13:55.800 is that this is a slam dunk as far as 0:13:55.920 --> 0:14:00.040 people in Cattle Larnier are concerned. You're saying only a 0:14:00.120 --> 0:14:03.680 minority five or breaking away. Well, if you look at 0:14:03.800 --> 0:14:06.079 the result of the referenum, so the referenum was illegal. 0:14:06.440 --> 0:14:08.960 So you have ninety percent or ninety percent saying they 0:14:09.000 --> 0:14:13.040 wanted independence, but only full percent voted during that referendum. 0:14:13.240 --> 0:14:15.679 So if you add up the figures, it's a minority. 0:14:15.800 --> 0:14:18.360 That doesn't mean that if more people had voted that 0:14:18.480 --> 0:14:21.280 the result would be different. But they're coming independent on 0:14:21.360 --> 0:14:25.720 such a small illegal, not legitimate, I would say, basis 0:14:25.960 --> 0:14:29.920 is questionable obviously, and we've seen some protests actually two 0:14:29.960 --> 0:14:33.640 weeks ago of the anti independence movements and there were 0:14:34.400 --> 0:14:36.960 i would say hundreds of thousands of people in the 0:14:37.040 --> 0:14:40.400 streets on Sunday for people just with the Spanish black 0:14:40.440 --> 0:14:42.920 saying we don't want to have independence. One must keep 0:14:42.960 --> 0:14:46.800 in mind that the regions in Spain already enjoy some autonomy. 0:14:47.080 --> 0:14:50.440 Catalonia as his own government, his own police, It has 0:14:50.520 --> 0:14:53.760 his own taxes, also national ones, but obviously more regional ones, 0:14:54.160 --> 0:14:58.440 so it or it is already enjoying some kind of autonomy. 0:14:58.480 --> 0:15:00.440 Obviously not enough for the people that want to push 0:15:00.480 --> 0:15:02.960 for independence. For example, they think they are giving too 0:15:03.000 --> 0:15:05.440 much money to the central state. There are net contributors 0:15:05.480 --> 0:15:08.840 to the national budget. But the bottom line here is that, yes, 0:15:08.880 --> 0:15:11.080 there are a lot of people in Catalonia that don't 0:15:11.080 --> 0:15:13.960 want to have independence. And this is why I think 0:15:14.000 --> 0:15:16.680 the best way to solve this problem would be to 0:15:16.760 --> 0:15:19.800 have a real vote, an actual vote in the good conditions, 0:15:20.040 --> 0:15:22.760 but this is very unlikely to happen anytime soon. Here's 0:15:22.800 --> 0:15:26.000 the bottom line for what Dan raised in our intro. 0:15:26.600 --> 0:15:29.840 Will the trash continue to be collected in Catalonia? Isn't 0:15:29.840 --> 0:15:32.360 at all that really matters in the end? Well, at 0:15:32.360 --> 0:15:36.120 the end of disruption in Catalan's daily life. If they 0:15:36.160 --> 0:15:39.680 really go to independence, if they lose all these trade 0:15:39.680 --> 0:15:43.560 agreements and all this uh multilateral agreements they're enjoying, the 0:15:43.600 --> 0:15:46.560 effect could be quite significant on the daily life of 0:15:46.920 --> 0:15:50.360 the cataman citizens, in terms of jobs, in terms of inflation, 0:15:50.520 --> 0:15:53.200 in terms of being able to collect money to go 0:15:53.240 --> 0:15:55.840 to the A T M and have Europe. So I mean, 0:15:55.840 --> 0:15:57.960 at the end of the day, Yeah, the question is 0:15:57.960 --> 0:16:00.080 is pretty much about the quality of life, and but 0:16:00.480 --> 0:16:04.440 what's the future they want in the region. Has anybody 0:16:04.680 --> 0:16:08.760 asked the leaders of the independence movement what their plans 0:16:08.760 --> 0:16:14.600 are for monetary arrangements, budgetary arrangements, revenue raising, bordering customs. 0:16:14.960 --> 0:16:21.640 Has anybody actually asked them that demanded that they explain. Well, 0:16:21.680 --> 0:16:24.440 there has not been a real campaign ahead of the votes, 0:16:24.880 --> 0:16:27.240 and I haven't seen anything where they really explained what 0:16:27.320 --> 0:16:30.800 they want. I've seen some declarations of some supporters of 0:16:31.400 --> 0:16:35.200 the catal and President Pride demon saying that they could 0:16:35.520 --> 0:16:39.520 resort to capital controls or to some form of economic 0:16:39.600 --> 0:16:43.680 quercation to make sure that the capital flows don't don't 0:16:43.760 --> 0:16:47.520 leave Catalunia. Um the question, obviously, I mean to me 0:16:47.680 --> 0:16:51.040 the business. Some banks, for example, have already left, right 0:16:51.080 --> 0:16:54.440 they moved their headquarters away from Barcelona and they put 0:16:54.480 --> 0:16:56.200 them in the valley Arres or in Madrid. So they 0:16:56.240 --> 0:16:59.640 already preventively made a move to make sure that they 0:16:59.640 --> 0:17:02.440 don't get disrupted in the business. But I think, yeah, 0:17:02.440 --> 0:17:05.399 the question for the Catalan government is are you ready 0:17:05.600 --> 0:17:07.679 to go all the way down this path and are 0:17:07.720 --> 0:17:11.159 you ready to assume the responsibility towards your citizens. I 0:17:11.160 --> 0:17:14.840 think this is the very central question here, Maxim before 0:17:14.840 --> 0:17:20.200 you go a thirty question, what makes Catalonia so special? 0:17:20.840 --> 0:17:24.320 I mean, why doesn't Bavaria want to break away? Why 0:17:24.359 --> 0:17:29.359 not Brooklyn secession? What's so great about the Catalonians? So Actually, 0:17:29.359 --> 0:17:32.600 the funny stories that Bavaria is actually a party that 0:17:33.200 --> 0:17:35.760 also advocates independence, but they only have a few votes 0:17:35.840 --> 0:17:37.840 right there. They're not big at all at the national 0:17:37.840 --> 0:17:41.240 stage or even at the regional state. Catalunia is from 0:17:41.280 --> 0:17:45.359 the history of Spain, from the Franco Hera, from the 0:17:45.440 --> 0:17:49.040 Civil War. It has in an identity, a cultural identity 0:17:49.080 --> 0:17:52.919 that is probably stronger than other regions in Europe. It 0:17:53.040 --> 0:17:56.560 is also of the Spanish GDP, and as I said, 0:17:56.600 --> 0:17:59.760 it's a net contributor to the national budgets. So there's 0:17:59.760 --> 0:18:02.200 a lot of for the for the independence is there's 0:18:02.240 --> 0:18:04.280 a lot of arguments if you line them up like 0:18:04.320 --> 0:18:07.200 this of saying we could actually do well just by 0:18:07.200 --> 0:18:12.280 ourself without the Spanish states and the Spanish authority. Again, 0:18:12.440 --> 0:18:15.840 this idea might be at first sight an interesting one, 0:18:16.200 --> 0:18:18.200 but if you go reading on the technicalities of this, 0:18:18.359 --> 0:18:20.200 if you would go all the way down that pass, 0:18:20.560 --> 0:18:23.080 you would lose, I think more than you would win 0:18:23.480 --> 0:18:28.240 by declaring independence. We'll have you back when Brooklyn declares independence. 0:18:28.520 --> 0:18:31.040 That's a yeah, Maxim. It was a pleasure having you on. 0:18:31.160 --> 0:18:33.719 Thank you so much for taking the time my pleasure. 0:18:33.760 --> 0:18:41.000 Thank you very much. Dan. What do you think of 0:18:41.040 --> 0:18:44.000 all this? To this answer your questions about whether anybody's 0:18:44.160 --> 0:18:47.800 thought of the real issues that have to be taken 0:18:47.840 --> 0:18:51.440 care of if a country actually becomes independent, I'm left 0:18:51.440 --> 0:18:56.040 with the impression that few people have contemplated, or at 0:18:56.119 --> 0:19:01.960 least articulated, what the machinery of night in an independent 0:19:02.359 --> 0:19:07.119 Catalonia would look like. It's all very well to wave 0:19:07.200 --> 0:19:10.680 a flag in a square and hauld a candle at midnight, 0:19:11.320 --> 0:19:14.960 But how does the business of government get done? It's 0:19:14.960 --> 0:19:18.960 not glamorous, but it strukes me that it's pretty essential. 0:19:19.600 --> 0:19:21.760 What you're saying seems like it could be applied to 0:19:21.840 --> 0:19:24.199 a lot of countries in the world today. On the 0:19:24.240 --> 0:19:27.040 other hand, this is how things happen in the world, 0:19:27.040 --> 0:19:30.480 how revolutions, how all these kinds of issues that we cover, 0:19:30.840 --> 0:19:33.600 you know, actually get done. It comes down to how 0:19:33.720 --> 0:19:38.520 people feel and then the actual machinery of government follows later. 0:19:42.600 --> 0:19:45.119 Benchmark will be back next week and until then, you 0:19:45.160 --> 0:19:47.920 can find us on the Bloomberg terminal, Bloomberg dot Com, 0:19:47.960 --> 0:19:51.680 our Bloomberg app, as well as on Apple Podcasts, pocketcasts, 0:19:51.760 --> 0:19:54.320 and Stitcher. While you're there, take a minute to rate 0:19:54.359 --> 0:19:56.640 and review the show. Some more listeners can find us 0:19:57.000 --> 0:19:59.040 and let us know what you thought of the show. 0:19:59.400 --> 0:20:03.320 You can follow me on Twitter at Scott Lanman Dan 0:20:03.560 --> 0:20:08.000 you are at moss under School, Eco, Maria is at 0:20:08.080 --> 0:20:11.480 at m A R I A T A D, and 0:20:11.680 --> 0:20:16.080 Maxim is at at m x s b A. Benchmark 0:20:16.200 --> 0:20:19.520 is produced by Sarah Patterson. The head of Bloomberg Podcast 0:20:19.680 --> 0:20:22.880 is Francesca Levy, thanks for listening, see your next time.