Catalan Devil’s Advocate

"In an age of government imposed austerity, and after 30 years of neo-liberal restructuring, the future of the welfare state looks increasingly uncertain. .

Coinciding with the first anniversary of last year’s Catalan independence referendum, Aunty BBC has provided a handy guide to what they think might befall economically in Catalonia should the “separatists” (a recurrent BBC term) win independence. The Beeb admits that Catalonia has a strong economy the size of Denmark’s, a stomping growth rate of 3.4 per cent last year (when their referendum took place) and provides a quarter of all Spain’s foreign exports. But predictably, the BBC neglects to tell us Catalonia is a net contributor to the Spanish exchequer and has been used as a milch cow by Madrid’s perennially corrupt administrations – a factor underpinning the demand for Catalan independence.

Equally predictably, the BBC piece is at pains to explain that Catalan independence will “destroy” its economy. To prove this ridiculous contention, the Beeb calls on devil’s advocate Angel Tavalera, a Spanish economist working for Oxford Economics Ltd., a big UK independent forecasting consultancy. Mr Tavalera has form. A self-confessed opponent of Catalan independence, he pops up a lot in the UK and US media to denigrate Catalan demands for self-determination.

First, says Tavalera, an independent Catalonia would crash out of the EU and go back to trading on WTO rules with the rest of Europe and Spain – its two biggest trading partners. Where have we heard this before? He also claims that foreign investment into Catalonia would collapse. Ominously, Tavalera predicts: “With the central government providing a lot of liquidity to the region, Madrid could also shut down Catalonia’s credit line.”

We should take this doom-laden scenario with oodles of salt. For starters, most of Spain’s European exports go via Barcelona docks or by road and rail through Catalonia to France. If an angry Spain wants to punish democratic Catalonia by vetoing its membership of the EU, it will be cutting off its own economic lifelines. Second, Spain is knee-deep in international debt.

Cutting off financial liquidity to Catalonia would provoke the Catalans into repudiating any responsibility for Madrid’s debts to Germany. Spanish interest rates would skyrocket, plunging Spain itself into deep recession. As for Catalonia losing foreign investment, FDI actually increased last year despite the political uncertainties caused by Madrid’s refusal to agree a legal referendum.

WHO ARE OXFORD ECONOMICS?

Angel Tavalera is one of several hundred economists and statisticians working for Oxford Economics, a highly profitable but shadowy international think tank which advises some 850 companies worldwide including Airbus, AT&T, BAE Systems, Deloitte, GE, Rolls-Royce and UPS. The consultancy was founded in 1981 as a way of commercialising the economics and business expertise of – you guessed – Oxford University. The company’s founders and core staff are straight out of the blinkered and self-serving Oxbridge, Whitehall and City establishment. Founder and chair John Walker is ex-Treasury.

Note: Oxford Economics is as useless as most other commercial forecasting consultancies when it comes to predicting, say, the 2008 Bank Crash. The company claims to have the world’s only comprehensive global economic model – which generates much of the firm’s profits. But like most income-expenditure models, this methodology ignores the impact of financial speculation and the fact that financial sector turnover is now many times larger than the total gross domestic product of the major industrial economies.

OXFORD VERSUS SCOTLAND

Those with elephantine memories (like your correspondent) remember that Oxford Economics was a key player in denigrating the case for Scottish independence back in 2014. The Oxford crew were hired by the notoriously anti-independence Weir Group to “investigate” indy economics. Surprise, surprise, the Oxford economists’ 80-page report found that independence would lead to higher taxes, increased borrowing costs, higher costs and greater uncertainty.

By the way, the report was published not long after Weir Group was fined £3m and ordered to repay £13.9m for illegally bribing friends of Saddam Hussein, to secure contracts under the infamous UN oil-for-food programme. This is the heaviest fine in Scottish corporate history. Yet Weir Group management could still find company cash to hire Oxford Economics to produce its tendentious IndyRef report.

Not that Oxford Economics needs a paying client in order to put the boot into Scottish self-determination. Last year another Oxford Economics super brain – Andrew Goodwin, the firm’s head UK forecaster – published a briefing note claiming Scottish independence lacked popular support – and that there were few signs of this ever changing. As an example of Oxford Economics predictive powers, this is a Lulu. The latest polls now show a clear majority for independence if the UK exits the EU. Goodwin also claimed the economic arguments against indy remained strong. Yet the shift in popular support towards independence is being driven by the threat of economic chaos arising from a hard Brexit!

 

Word to the wise: the executive director of Oxford Economics Ltd., Charles Burton, sits on the Scottish Government’s Economic Consultants Advisory Group.

Comments (15)

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  1. Redgauntlet says:

    George

    Let’s get one thing straight: corruption in Catalonia is every bit as big a problem as it is in the rest of Spain. CiU, the predecessor party of Puigdemont’s PdCAT was liquidated it has so many ongoing corruption scandals. The party of Artur Mas and Jordi Pujol is one of the most corrupt political parties in the history of European politics bar none, every bit as much as Rajoy, Aznar and the PP. It’s a problem which affects the whole political culture.

    As for using the wealth of Madrid, Barcelona and the Basque Countries to finance the poorer parts of Spain, that is called wealth redistribution, and it happens everywhere including the UK. It has always been argued for by the Left as a progressive idea .

    There is a very nasty racist trait in Catalan nationalism which is summed up in the myth that the Catalans are hard-working and the Andalusians are lazy by nature and live off the industrious Catalans largess. The current President of the Generalitat, Quim Torra, is a fine example of the kind of racist, reactionary, ultra conservative and ultra catholic Catalan who so called progressives like you in Scotland are currently supporting….

    Quim Torra is the Catalan version of Rajoy. He might even be worse than Rajoy, certainly he is openly racist. You want to support him? Fine by me, Geroge.

    But please don’t insult the intelligence of the readership of Bella by telling us that it is progressive…

  2. Mike Harland says:

    George could also be said to have form, as do we all of a certain age, and I found this piece to be rather one-sided like several others in the National of late …reporting the events of the last weekend in Catalonia as if nothing had happened other than a glorious victory for independence when in fact Torra had encouraged the militant minority to ‘lay it on’ and his own police force were corraled behind the doors of parliament as the mob were actually demanding Torra’ s resignation for not carrying through with secession.

    Torra’s response was to threaten to bring down the Spanish government with the same tactics of the DUP (which was ignored) and the result is that independence is in disarray as the left repudiate Torra’s tactics and his own police also demand his resignation along with the interior minister. That George should be defending this right-wing xenophobe would make my republican father-in-law turn in his grave along with his uncle Besteiro who rotted away in Franco’s jail, having fought for democracy in Spain all their lives.

    Only dialogue and not the confrontation of Torra and Puigdemont will solve this problem and ousting the left wing interim government of Sánchez will lose them perhaps their last opportunity to change the constitution. The EU block to which PDeCAT belong is even thinking of chucking them out for the corruption they inherited, so the idea that an independent Catalonia will find many friends in Europe is on very shaky grounds.

    Granada, 5th October.

    1. Willie says:

      Ah well, with all the corruption at least they’ll be in good company with an equally corrupt Scotland.

      In fact, maybe the corrupt Catalonians could learn a trick or two from some of the Scottish local authorities who put the mafia to shame.

  3. Mathew says:

    Looking forward to George’s thoughts on the IPCC new report on the 1.5 degrees C limit. Where does he stand on introducing a carbon price of 30 euros per tonne? How does he feel about Cuadrilla drilling again in Lancashire? Or the long jail sentences received by peaceful protestors at the Preston New road site?

  4. Jamsie says:

    So let me get this right.
    The SNP’s foremost economic expert (self styled) is rubbishing an organisation which has a director the Scottish “government” use to provide advice.
    This the same economic expert who rubbished the SNP GCR.
    When will they learn “ it’s the economy stupid!”
    The Scottish electorate deserves to better.
    The effect of Brexit cannot be predicted or forecast with any accuracy based on GK’s thought pattern and the people the Scottish “government” employ are incompetent.
    Great case for Indy eh?

  5. Jo says:

    I feel increasingly uncomfortable with people drawing comparisons between Scotland and Catalonia. It really isn’t helpful.

    1. There’s a lot of differences – laid out in detail in our forthcoming book – but much in common. What makes you uncomfortable Jo?

      1. Redgauntlet says:

        Essentially, there is no difference between the xenophobic case for independence made by the League of the North in Italy and by Catalan nationalism in the form of Quim Torra, Puigdemont’s man, hand picked by the narcissistic operator, Carles Puigdemont.

        Why does Bella Caledonia not do a book on the “emancipation” of the northern City States of Italy like Venice and Milan? After all, they were independent republics in their own right in a way Catalonia never was, and Italy as a country is only 150 years old or so, while Spain is much older.

        And, to paraphrase Kerevan’s piece of propaganda, “perennially corrupt Rome” has always used Milan and Venice as a milch cow…

        The League of the North, who are now in power in Italy and turning away the ships of desperate immigrants…???

        The idea that Bella Caledonia has any interest in a rigorous, robust and rational analysis of the case for Catalan independence is a truly laughable idea….

        You only have to look at the language used on the jacket of the book to see that…

        “Emancipation” is a term of 19th Nationalism when the creation of nation states and democratic rights went hand in hand and were part of the same process of national liberation… the idea that Catalonia is “oppressed” in any comparable way is simply a falsehood…

    1. Derek Thomson says:

      Ah, Chris Deerin, that beacon of enlightenment “capturing the moment.” Utter balderdash. “the formidable Ruth Davidson” – oh my sides! Vacuous rubbish. At least you managed to get through one post without “wee Nicola” or “wee Eck.”

      1. Jamsie says:

        Didn’t know you were a follower Deke.
        So just for you wee Nicola and wee Eck are just about to be found out colluding suppressing sexual harassment complaints.

  6. John Moloney says:

    Corruption is a universal part of politics just a question of the amount that goes on, I disagree with victim-hood status being put on this complex issue. The Scots unlike the Irish never expressed by actions a dedication to Independence , in other words kept the fight going. It is interesting to note, that after Ireland became part of the UK in 1801, the Royal Irish Constabulary, were the only armed Police force in the British Isles, that were issued with a carbine and pistol and Police stations were referred to as a Barracks. The Irish never gave up while the Scots folded in 1745….

    1. MBC says:

      Crap. The ‘Scots’ have always contested the union. There has never been a time it was not contested. But the parallel with Ireland doesn’t work. Scotland was never oppressed in the same way as Ireland, so resistance took less violent forms but was nonetheless always present in every generation. The radicals, the reformers, the Scottish Society for the Vindication of Scottish Rights (1856) the Scottish Home Rule Association (1880s) the Independent Labour Party… from 1707 to 2018 there has always been in every generation opposition to the union.

  7. Alf Baird says:

    Visited the Port of Barcelona several times and for sure it is the engine of the Catalonian economy and a critical element in the Spanish economy with many €billions in trade and tourism flowing through it. Pity the SNP has yet to deal with the Thatcher privatisation legacy which has left Scotland’s major ports bereft of investment for over thirty years now and owned and regulated by offshore private equity wastes of space. If we want a Brexit bypass, like Ireland is doing now, its has to be via Scotland’s ports, especially Clyde and Forth, but that won’t happen without Holyrood action.

    1. Willie says:

      You raise a very valid point Alf.

      The Scottish ports were hived off by Thatcher to be held as they now are by offshore private equity vehicles.

      Port development has as result been stifled of investments.

      With our port capacity many times less than let our Dublin neighbour Scotland has been in effect isolated.

      It is an area that our Scottish Government has failed to address.

      Quite why it is off the agenda is a question that should be asked of the FM.

      Post the UK’s exit from the EU Scotland’s more than ever needs to be connected to Europe,

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