post-title Catalan crisis will hit Spanish economic growth https://insideiberia.com/wp-content/uploads/2015/11/vineta.rajoy-puigdemont.jpg November 6, 2017 yes no
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Catalan crisis will hit Spanish economic growth
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Catalan crisis will hit Spanish economic growth

The first to go were the banks. Then construction companies left. Now even Catalonia’s iconic Cava producer is considering leaving the prosperous north-eastern Spanish region that is heading helter-skelter towards a declaration of independence. José Luis Bonet, chief executive of leading Cava maker Freixenet, says he will recommend to his board that they move headquarters if Catalonia declares independence. “We cannot run the risk of being outside the European Union,” he adds. He warns that being outside the EU would mean a “loss of competitiveness for Catalan products” as they would likely be subject to tariffs. He adds that the process will also be bad for business confidence: “Businesses need legal certainty and we do not have it right now.”
Spain’s constitutional crisis in Catalonia will lower the country’s projected economic growth next year, according to Madrid’s finance minister. Luis de Guindos said the country’s GDP growth projection had been lowered by about 0.4-0.5 percentage points to 2.3 per cent next year — “a small impact” as a result of events in Catalonia, which accounts for a fifth of Spain’s GDP, said Mr de Guindos. Speaking in Brussels on Monday, Mr de Guindos said the government’s projections would likely match the European Commission’s latest economic forecasts due on Thursday. Spain’s economy has been roaring in the last two years, making it one of the fastest growing major economies in the 19-country bloc. Mr de Guindos said forecast was “prudent” in light of events in Catalonia. “If we had not had the Catalan question… surely we would have gone to 2.7 per cent or 2.8 per cent” said Mr de Guindos. The finance minister described deposed Catalan president Carles Puigdemont’s actions as a “pantomime” and a “farce”. The former president arrived in Brussels last week and was granted bail by Belgian courts after Spain issued a European arrest warrant against him. “I have absolute confidence in the separation of powers, the rule of law, and the upholding of the law”, said the finance minister. Also speaking ahead of the Eurogroup in Brussels today, Peter Altmaier, Germany’s acting finance minister, said a solution to the crisis “based on the constitution and the rule of law will help limit the economic consequences”. “We have seen that a new regional parliament will be elected soon. This is encouraging sign everything can be solved in a reasonable frame of time”, said Mr Altmaier. Eurozone finance ministers will also discuss ideas for the eurozone to create a joint source of cash to be used in times of economic emergency. Valdis Dombrovskis, European Commission vice president, said he supported an investment protection scheme as the best form of this “fiscal capacity”. Other countries have suggested plans such as unemployment reinsurance schemes or a “rainy day fund” to distribute cash across the 19-country bloc when a recession hits. A small piece of history will also be made at the Eurogroup later today, when all 27 finance ministers will gather in a widened “exclusive” forum, with the exception of the UK. Britain is excluded as it is one of the non-euro countries that did not sign up to the EU’s “fiscal compact treaty”.

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