One of the lessons of medieval history (I’m listening to one of those recorded lecture series on the subject this week) is that Europe wasn’t always made up of today’s familiar countries. Italy, Germany, and Spain in particular started out as a patchwork of smaller kingdoms and principalities that were eventually rolled up by the monarchs with the best armies.
This cultural memory of independence lives on in many places, resurfacing in hard times and complicating already complex situations. Spain, for instance, includes several distinct populations, in many cases with their own languages and a sense that, as Texans like to say, they were a country once and might be again. Most Americans have heard of Spain’s Basque separatists because they’ve tended to express their feelings with explosives. But now Catalonia, the country’s richest region, is wondering if perhaps it would be better off on its own:
BARCELONA, Spain—This vibrant northern region of Catalonia has long been known as the “factory of Spain” for generating wealth that helped sustain the entire nation. Now Catalonia, beaten down by years of recession, has become the battleground in what threatens to become an economic civil war.
In protests large and small, hundreds of thousands of Catalans are embracing a stark proposition: Only by breaking ties with Spain and becoming an independent country can Catalonia free itself from economic malaise.
Catalans go to the polls Nov. 25 for a regional parliamentary election, and polls show pro-independence parties in front.
“Madrid has been draining us dry for too long,” says Josep Casadella, a corporate human-resources administrator. He became an Internet sensation not long ago after posting a video of himself refusing to pay the fare at a toll booth and complaining that Spain should build free roads for all the taxes it collects.
Appalled at the separatist sentiment, a military veterans’ association said that politicians pushing for Catalonian independence should be tried for “high treason.” In recent days, pro-Spanish-unity protesters held a smaller demonstration of their own. Marchers held a sign reading: “Help, Europe. Nacionalists are crazy.”
Spain’s internal struggle echoes a larger debate convulsing the euro zone itself, as wealthier northern nations complain about supporting poorer southern ones. But now, as Europe enters its fifth year of crisis, the economic strains are deepening the fractures within some nations.
In Spain and Belgium, and to a degree Italy, local and national governments are battling over how to allocate scarce resources. Even within Germany, which is economically stronger and politically stable, richer areas are grumbling about the cost of subsidizing the poorer areas.
Catalonia’s president, Artur Mas, called the marriage between his region and the Spanish capital one of “mutual fatigue” in a speech, likening it to the way “northern and southern Europe have grown weary of one another.”
Speaking of northern and southern Europe, the “euro-skeptics” continue to gain ground in national elections:
Euro Skeptics in Finland Are Projected to Make Gains
HELSINKI—The euro-skeptic Finns Party likely made good on pollster predictions of being the biggest gainer in Finland’s local elections Sunday as the fiercely-nationalistic party continued to gain popularity compared with previous elections.
The party surged past its 2008 municipal election result in gaining 12.3% of votes, according to preliminary data released by the nation’s justice ministry. The justice ministry numbers were based on 99.8% of votes being counted.
While growth in support for the Finns Party, which has advocated Finland’s exit from the euro zone, isn’t expected to drastically impact the day-to-day decisions taken by cities in Finland, the results show that the party’s message remains popular among Finland’s 5.4 million people.
Many political observers have said the strength of the Finns Party is putting pressure on Prime Minister Jyrki Katainen and other policy makers to maintain a tough stance in euro-zone reforms and bailouts of nations suffering from debt woes. The country’s next parliamentary election isn’t until 2015.
None of this is surprising. The pie is shrinking as Europe deleverages, and groups with relatively more wealth and/or self control are recoiling at the idea of being drained to support others who for whatever reason aren’t as successful. Politicians and parties that give voice to this anger will get votes, and pressure will grow on elected officials to move in that direction.
The question then becomes how far central governments will allow this kind of movement to go. Will Catalonia actually be allowed to leave, or will it be bought off or prevented by force? Will the process encourage the rise of radical parties (like the neo-Nazis in Greece) that may or may not care about autonomy but want other extreme changes in governance? Who knows? Europe is in uncharted waters.
The US, meanwhile, has been spared this kind of unrest because the dollar is still functioning as the world’s reserve currency. The Treasury can borrow as much as it needs to finance Social Security and Medicare payments and keep defense plants running, which takes enough pressure off of state budgets to avoid eurozone-style financial chaos.
But a reserve currency is not a perpetual motion machine. It’s a privilege that can be revoked by the market if abused. So our funding crisis is coming (see China, Russia, and the End of the Petrodollar) and once it begins to dawn on Texas and Montana that their hard-won savings are being siphoned off by profligates like Illinois, the idea of just saying no (nullification) or leaving altogether (secession) will start to poll in double digits. And another layer of complexity will be added to an already chaotic decade.