The separatists are to blame

Only 332 companies have so far applied to relocate their headquarters

In his masterpiece 1984, George Orwell describes the workings of a dystopian state that tries to control how its citizens think. One of the dictatorship’s favourite tools is what is known as Newspeak, which consists of calling things the exact opposite of what they really are. For example, the state speaks of the "Ministry of Truth" to refer to the ministry that censors and manipulates information, of the "Ministry of Peace" to speak of the war department, the "Ministry of Love" to allude to those engaged in torture and the "Ministry of Abundance" to refer to those who are charged with managing shortages.

Orwell would find the use of Newspeak in Spain utterly fascinating. With more than 900 individuals charged with corruption and people "accidentally" dying days before having to give evidence in court, Spain’s Partido Popular is undoubtedly the most corrupt political party in Europe. Nevertheless, on a daily basis day we see its leaders deliver sermons about the need for "everyone to comply with the law".

The unionists label the pro-independence parties supremacists, fascists and Nazis, even though it is at unionist demonstrations that the swastikas inevitably appear and where Nazi or Francoist salutes can be observed. And it is their leaders (such as MEP Javier Nart) who openly speak of sterilizing (that’s right, sterilizing!) women with a high probability of giving birth to children with disabilities. That is about as Nazi as one can get.

They accuse pro-independence activists of violence, while they imprison their leaders without trial for crimes of "rebellion" and "sedition", two concepts that require acts of violence which no one has ever witnessed. What's more, it is their police who beat elderly ladies outside polling stations, they are the ones who start the campaign with a rallying cry which is an incitement to violence, "Let ‘em have it!", and they are the ones whose demonstrations always end in a punch up.

They say that Catalonia is plagued by social problems because our Parliament wastes time arguing about independence instead of passing laws that "truly interest the people". But the truth is that a total of 26 laws of a social nature have been suspended or overturned by the Constitutional Court at the request of the Spanish government.

One of the areas where linguistic distortion is at its most flagrant is the economic sphere. At every rally held by a Spanish party it is said that if Catalonia were independent, it would be unable to pay its state pensions. However, the reality is that the PP government has squandered €66 billion from the pension piggy bank, which proves that the Spanish Social Security system receives insufficient contributions to cover the cost of its pensions.

Similarly, they never tire of declaring that one of the great myths of independence is the claim that the fiscal balance shows a deficit of around €16 billion. However, the Catalan administration —currently under Madrid’s direct rule via Article 155 of the Spanish Constitution— calculated and released the new balance for 2014 and it turns out the deficit is none other than €16.5 billion!

The reason behind the change in headquarters was not a fear of independence but a fear of reprisals from its Spanish clients

And, lately, one cannot speak about the economy without the unionists raising the spectre of the "mass exodus of companies", an "exodus" that shows that an independent Catalonia is not viable and that the "pro-independence drift" has led to an economic catastrophe.

Now that several weeks have passed and we have started to see real data, we can analyse what has in fact happened. First of all, let’s start by saying that of the 3,000 companies that applied to relocate their headquarters, only 332 have so far completed the process, according to Ministry of Economy figures. This number will undoubtedly change in the future since there is a lag in the data but, for the moment, there aren’t 3,000 companies, but rather 332. Second, the economic impact of companies moving their headquarters is almost zero. Not one company has relocated its production facilities and not one employee has lost their job due to their company’s headquarters being relocated. I said all this at the time, but now it has been confirmed by an institution which can hardly be accused of being pro-independence: the Technicians Union of the Ministry of the Spanish Treasury! In fact, more jobs have been lost due to the unfair dismissals perpetrated by the 155 Ministry, which shut down the Catalan embassies, than are due to the alleged "exodus" of companies.

Third, one has to wonder why 3,000 companies agreed to change their headquarters so quickly. The official Newspeak spokespersons informed us immediately that they either did so out of a fear of independence (the unilateral declaration at least) or they were afraid of the legal uncertainty in which Catalonia would find itself, if it were to be expelled from the European Union. This official explanation immediately seemed to me to be rather flimsy. To begin with, in order for Catalan companies to be left in a legal limbo and for Catalonia to be expelled from the EU, Spain would first have to recognize its independence. So long as Spain was unwilling to recognize Catalonia’s independence, the companies would have continued to be Spanish and, therefore, would still have been part of the EU! Why were they in such a rush, then? If we examine the type of companies that changed their headquarters, we can observe two revealing characteristics. The first is that virtually none of them were foreign-owned (and any foreign one are largely in the insurance sector). This is an interesting piece of information, since if there were an "exodus" of companies for fear of them being left out of Europe or from a fear of legal uncertainty, how come only Spanish companies were “afraid” of that?

The second interesting piece of information is that most firms that changed their headquarters are from highly regulated sectors or depend largely on state-funded public projects. An example of this type of company would be cement manufacturers, who sell their product to builders who depend on contracts awarded by the government in Madrid. If we add to this the fact that Seat’s trade union issued a statement stating that the company had received "pressure from the Spanish government and the King" to move their headquarters, it tells a very different story from the official version: the Spanish government and the King sent messages to every Catalan company urging them to move their headquarters. The message carried an implicit threat of reprisals for those who failed to do so. Those companies which directly or indirectly depend on government contracts gave in. The others (which includes the majority of foreign companies) did not. The alleged exodus can therefore be explained, not by a fear of independence but a fear of the retaliation of a Spanish government enraged to the point of being prepared to cause an economic catastrophe in order to stop Catalonia from becoming independent.

Other businesses which relocated their headquarters are those, such as the producers of cava, which are easily identifiable as Catalan by their Spanish customers. This second group includes the two major Catalan banks and insurance companies. In addition to the government threats, they saw their business as being in danger as a result of the boycott that was brewing among Spanish buyers and that was reflected in the infamous phrase "Let ‘em have it!". The Catalan banks, which nowadays do a majority of their business in Spain, thought that if there were a mass withdrawal of deposits in Spain, it could lead to a banking crisis that in turn could ruin them. In this case, therefore, the reason behind the change in headquarters was not a fear of independence (which, I repeat, would not have taken effect from a legal point of view until Spain had recognized Catalonia as an independent country) but rather out of a fear of reprisals from its Spanish clients.

Some commentators have spoken of instances of companies led by pro-independence executives signing the documents authorising the move "with tears in their eyes". These alleged tears, however, were not an acknowledgement that an independent Catalonia would not be economically viable, but that their business depends on the arbitrary decisions of a state with an unreasonable capacity to influence private companies. It is evidence that Spain is what Acemoglu and Robinson would call an "extractive economy".

The episode of the so-called "mass exodus" of companies will go down in history as an example of the use of Newspeak: those responsible for the exodus are the Spanish government and its allies, a crazed king and threats of a boycott from an irate Spanish public that saw off the Civil Guard with shouts of "Let ‘em have it!". But it doesn’t stop them from repeating every day, without fail and entirely without shame, that the separatists are to blame.

EDICIÓ PAPER 20/10/2018

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