Catalonia crisis to be ‘WORSE THAN BREXIT’: Spain to be plunged into mass uncertainty

A so-called ‘Catalexit’ would at the same time mean the region’s exclusion from the European Union (EU), which economists predict will create unavoidable problems over its membership of the single market.

Tensions reached boiling point this week when Brussels failed to condemn Spain over its heavy-handed tactics and brutality during Sunday’s independence referendum, which was ruled illegal by Spanish courts. 

Instead eurocrats repeatedly refused to comment and voiced their support for embattled Prime Minister Mariano Rajoy. 

Reluctance to address the ongoing crisis could point to the possibility EU leaders want to avoid Catalonia leaving Spain over fears the continent will be plunged into “uncertainty”. 

ING economist Geoffrey Minne said: “As with Brexit, we believe that a Catalexit will plunge the region into a long period of uncertainty and will most likely be negative for the private sector. 

“Most foreign and Catalan companies are afraid of no longer being part of the European single market.

“One consequence of this would be that investments could be delayed or shifted from the region.

“The EU was responsible for 65 per cent of exports and 70 per cent of the foreign investment in Catalonia in the last three years. 

“The economic cost of Catalonia could proportionally exceed that of Brexit.” 

He added: “All in all, the formation of a Catalan Republic is an expensive project. The bulk of the costs could be dependent on the goodwill of European governments, including the Spanish one. 

“It is difficult to evaluate the consequences of such an unpredictable event, but in the long term, we can imagine that the economic costs for Catalonia are relatively higher than those of the United Kingdom for Brexit.”

Catalonia attracts one third of investment into Spain and produces one third of Madrid’s exports. 

The most affected companies would be those who export to the EU, according to Mr Minne. 

The Spanish government has made it clear that if Catalonia were to become independent, it would resist it remaining a member of the EU. 

The warning comes after the club’s chief spokesman repeatedly refused to be drawn on whether or not EU officials felt the actions of Spanish police were disproportionate, saying he would “not engage in this sort of judgement”. 

Maragritis Schinas also declined to comment on calls for infringement proceedings being taken against Madrid and tried to distinguish the Catalan case from abuses of Rule of Law in Poland and Hungary. 

Additional reporting by Monika Pallenberg