Higher unemployment, inflation are expected
28 October, 2017
Spain's economy minister Luis de Guindos.
An independent Catalonia would be forced out of the EU and the Eurozone, which would directly hurt the regional economy, the Spanish economy minister Luis de Guindos told parliament last Wednesday. "It'd be out of all the treaties, 70% of its gross domestic product would be subject to tariffs and physical borders. It would be out of the Eurozone and the banks wouldn't have ECB coverage ... it would have to create its own currency, which would be very depreciated," he noted.
Such a depreciation would lead to an estimated 25-30% drop in regional economic growth, elevated inflation and a doubling of unemployment rates, according to the minister.
Over 1,501 companies have left Catalonia amid fears of the region's independence from Spain, local media reported recently, citing sources from the College of Mercantile Registers of Spain. Only last Tuesday, 107 companies decided to move their headquarters from Catalonia to other places.
Caixabank, the third-largest bank in Spain, that was until recently based in the region of Catalonia, says it suffered a “moderate” but temporary run on deposits due to the crisis over the region’s independence bid. Presenting the company’s earnings for the first time in the city of Valencia, CEO Gonzalo Gortazar declined last Tuesday to give details on the amount of deposits that were withdrawn.