Nobel laureate Joseph Stiglitz tells EURACTIV.com that the region would be accepted in the EU and therefore become a viable independent economy if it applied, but the former chair of the UK’s Financial Services Authority Adair Turner disagrees.
Before Scotland became a model for nationalists in the age of emotion and identities, it was one of the engines of Europe’s enlightenment. Back then, Adam Smith, David Hume and others brought the fresh breath of reason after centuries dominated by religion and custom.
With the idea of channelling Smith, the multidisciplinary thinker who embodied the multidimensional man (later misinterpreted and reduced to the homo economicus), the Institute of New Economic Thinking (INET), organised its annual conference in Edinburgh. The organisation’s goal is to give birth to an economic narrative that, if it does not substitute, at least sheds light on the contradictions of the tyranny of the market.
Joseph Stiglitz is a staunch critic of the cocktail of deregulation and austerity. The Nobel laureate on Economics has also become one of the most authoritative voices arguing that an independent Catalonia would be a viable economy.
Despite the flight of more than a thousand companies, the projected drop in GDP, and the deadly combination of breaking up with Spain, leaving the EU and abandoning the monetary union, all simultaneously, the American economist still believes that Catalonia would survive.
The Columbia professor sees the EU as the decisive factor in determining whether Catalonia rises as a new state or collapses. And he says that it is “hard” to believe that an independent Catalonia would not be accepted by the European club.
“The question is how fast they would do that, how fast the negotiations would be.” Speed is crucial, because turbulence would be unavoidable.
“That is the issue: how big the economic shock would be and how long would it last,” he added.
But his optimism in regards to a fast-track EU membership would find little support in the real world.
Neither Spain nor the rest of the European partners would accept a Catalonia that became independent by force, as it would set a dangerous precedent.
“Those are very difficult political issues that Europe would have to work through” he said. But even in the worst-case scenario of a rejection, Stiglitz remains optimistic.
”There are a range of institutional arrangements that Europe has found with countries that are not in the EU for trade”. And the mantra is well-known: trade is good for everyone, so why not open up? In order words, the economic benefit could end up softening political resistance.
A ‘mad idea’
But Adair Turner is more sceptical when thinking about the possibility of the EU opening its doors to new independent states. “There is a real problem for Catalonia. The only way to be sensibly independent is to be part of the EU. But the EU does not want that to happen because it just complicates life,” he told EURACTIV. He points out that the EU would not know how to deal with these new micro-states.
Turner, described as a versatile thinker, holds countless positions, including the chair of INET. He advocates out-of the box ideas, such as “helicopter money”, in which central banks would hand out money to citizens to spur the economy. He “understands the motivation” of both the Catalans and the Scottish who seek independence, even in spite of the economic cost.
He points out that, in modern societies, the economy is not the only point of reference of the population. National or regional identity plays an important role. A shaping factor that has grown in recent years, because “the more you are part of the global world, the more you want some local identification”.
But he adds that it would be “a mad idea” to aspire to become independent outside the EU. For that reason, he recalls that both the SNP and the Catalan separatists defend their EU membership
Despite the turmoil of recent weeks between Madrid and Barcelona, Turner also wants to maintain some optimism. “I hope there is a completely peaceful and reasonable way to square these circles, whether is by a deeper level of autonomy of the regions within Spain, that at the moment I don’t know,” he added.
