Catalonia is considering pursuing a path toward independence from Spain. In November regional elections, parties that openly support holding a referendum on the issue won two-thirds of the parliamentary seats, although political rivalries could upend the plan. Spain's central government has long promised to block any referendum. A referendum would add constitutional instability to the country's economic crisis. Here are the basics:
Q: Why independence?
Catalonian independence aspirations are centuries old and have throughout history resurfaced in times of institutional instability, not unlike the Basque Country's parallel struggle. After Spain regained its democracy after the death of dictator Francisco Franco in 1975, regional frictions were put off until the country regained its footing and stability.
Independence momentum went dormant with a two-decade economic boom and European Union membership. Long-contained frustration with the central government not surprisingly resurfaced with the economic crisis.
Catalonia's economy is the size of Portugal's, but like other Spanish regions it is over-indebted, and the central government has had to bail it out. Austerity cuts have been more severe than in most other regions. The majority of Catalonians feel they are paying disproportionately more to the central government than what they get in return.
But even if independence is a long-term goal, Catalonia wants to at least gain the upper hand in pending renegotiations of its fiscal pact with Madrid. The goal is to gain full control of its fiscal affairs, from tax collection to public expenditure.
Q: Why does Madrid want Catalonia to stay?
Yielding to Catalonia's pretensions would not only trigger a domino effect, it would also handicap the central government economically at this juncture by losing a big portion of its tax revenue. In effect, Catalonia's economic prowess subsidizes slow growth in the south.
There is broad consensus that the constitution needs reforms to adapt to different times, and that those reforms should nudge Spain toward becoming more of a federation, as opposed to a group of regions with varying degrees of power in relation to the central government, each advancing different visions of nationhood.
But the process would be long and economically costly, and would delay a recovery. Any constitutional reform would also be politically risky for the country's biggest parties amid the crisis.
Q: How likely does independence look now?
"We don't see risk of secession," says Wolfango Piccoli, European practice director of the Eurasia Group, a security think tank headquartered in New York. "It's more an issue of noise. Catalonia and others are using the crisis to increase their leverage vis-à-vis the central government and upping the ante. It's going to be noisier in 2013, but Catalonia is not leaving Spain anytime soon."
The conservative regional ruling party of Catalonia hoped that independence would weigh more heavily than unpopular austerity measures, in a political calculation to consolidate its hold on regional power. But it suffered a stinging defeat in elections, shedding 12 of the 62 seats it won only two years ago, thus denying it the mandate it needed to negotiate any substantive reforms with the central government.
Most Catalonians want to decide whether they stay in Spain, but even more of them reject further economic pain. In addition, the majority of Spaniards and parties that control policymaking will not allow any major constitutional reform amid the crisis, for fear that a referendum on independence could open the door to secession of Catalonia and the Basque Country.