German firms uneasy over Catalonia's future

Amid fears that Catalonia could announce it is breaking away from Spanish rule on Monday, German firms are anxious about their investments. Alone in 2015, Germany invested half a billion euros in the autonomous region.

As the world waits to see whether Spain's autonomous Catalonia region will declare its independence from Madrid early next week, German business leaders warned on Friday that the decision could leave their investments in a legal and economic limbo.

Catalonia's leaders have vowed to defy a ruling of the Spanish Constitutional Court, prohibiting the planned meeting of the regional parliament on Monday. The assembly plans to debate the results of last weekend's referendum result, where Catalans overwhelmingly voted to secede from Spanish sovereignty. A formal announcement declaring self-rule could even come on the same day.

"The situation in Spain leaves German companies nervous," the new president of the German Federation of Wholesale, Foreign Trade and Services (BGA), Holger Bingmann, told the Reuters news agency.

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A similar warning was made by Volker Treier, the foreign trade chief of the German Chambers of Industry and Commerce (DIHK).

"Political instability is a direct threat to economic development," Treier said. "Doubts as to whether Catalonia will continue to belong to Spain, and therefore to the European Union, is unsettling for German companies."

Infografik Karte Wirtschaftsmotor Katalonien ENG

He warned that any move towards independence would leave sizeable legal uncertainties for businesses operating in the region.

Read more: Catalan separatist movement driven by more than just economics

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The latest twist in the years-long independence movement in Catalonia comes as Spain recovers from a deep economic crisis that saw unemployment spike to record levels of 27 percent, property prices plummet and several banks require government bailouts. The Spanish government even requested a 100-billion-euro ($117 billion) rescue package from the European Union.

EU status in doubt

Catalonia is one of Spain's most prosperous regions and plays a major role in Spain's cross-border trade due to its location on the Mediterranean Sea and its proximity to the French border. Any declaration of independence could see it lose access to the European Union's internal market, at least temporarily, until it becomes a full EU member in its own right.

Read more: Catalan banks prepare for shifting headquarters after secession

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"Many companies could leave this region," Spiegel Online cited Eckart Woertz, research coordinator for the think-tank Barcelona Center for International Affairs as saying, "especially if companies are concerned they are permanently exposed to an opaque legal situation."

"Things could unfold quickly," warned Albrecht Peters, the president of the Barcelona-based circle of German-speaking executives. He said Catalonia's economy had already suffered in the lead-up to last Sunday's referendum and that "we are now moving into unknown terrain."


Rich ancient heritage

Catalonia has been settled by the Phoenicians, the Etruscans and the Greeks, who were mainly in the coastal areas of Rosas and Empuries (above). Then came the Romans, who built more settlements and infrastructure. Catalonia remained a part of the Roman Empire until it was conquered by the Visigoths in the fifth century.


Counties and independence

Catalonia was conquered by Arabs in 711 AD. The Frankish king Charlemagne stopped their advance at Tours on the Loire River and, by 759, the north of Catalonia was once again Christian. In 1137, the counties that made up Catalonia entered an alliance with the Crown of Aragon.


Autonomy and the war of succession

In the 13th century, the institutions of Catalan self-administration were created under the banner of the Generalitat de Catalunya. After the unification of the Crown of Aragon with that of Castile in 1476, Aragon was largely able to keep its autonomic institutions. However, the Catalan revolt — from 1640 to 1659 — saw parts of Catalonia ceded to present-day France.


Remembrance of defeat

After the conquest of Barcelona on September 11, 1714, by the Bourbon King Phillip V, Catalan instuitutions were dissolved and self-administration came to an end. Every year, on September 11, Catalans commemorate the end of their right to autonomy.


Federal ideas in wider republic

After the abdication of King Amadeo I of Spain, the first Spanish Republic was declared in February 1873. It lasted barely a year. The supporters of the Republic were split – one group supporting the idea of a centralized republic, the others wanting a federal system. Pictured here is Francisco Pi i Maragall, a supporter of federalism and one of five presidents of the short-lived republic.


Failed attempt

Catalonia sought to establish a new state within the Spanish republic, but this only served to exacerbate the differences between republicans, ultimately dividing and weakening them. In 1874, the monarchy and the House of Bourbon (led by King Alfonso XII, pictured here) took the helm.


Catalan Republic

Between 1923 — with the support of the monarchy, the army and the church — General Primo de Rivera declared a dictatorship. Catalonia became a center of opposition and resistance. After the end of the dictatorship, the politician Francesc Macia (pictured here) successfully pressed for important rights of autonomy for Catalonia.


The end of freedom

In the Second Spanish Republic, Catalan lawmakers worked on the Statute of Autonomy of Catalonia. This was approved by the Spanish parliament in 1932. Francesc Macia was elected president of the Generalitat of Catalonia by the Catalan parliament. However, the victory of Franco at the end of the Spanish Civil War (1936 to 1939) put an end to all that.


Loss of liberties

The Franco regime ruled with an iron rod. Political parties were banned and the Catalan language and culture were surpressed.


New autonomy by statute

After the first parliamentary elections that followed the end of the Franco dictatorship, the Generalitat of Catalonia was provisionally restored. Under the democratic Spanish constitution of 1978, Catalonia was given a new Statute of Autonomy just a year later.


New and different statute

The new Statute of Autonomy recognized the autonomy of Catalonia and the importance of the Catalan language. In comparison to the 1932 statute, it was enhanced in the fields of culture and education but curtailed when it came to the realm of justice. Pictured here is Jordi Pujol, the long-time head of the government of Catalonia after the dictatorship.


Stronger self-awareness

A desire for independence has grown stronger in recent years. In 2006, Catalonia was given a new statute that broadened the Catalan government's powers. However, it lost these after a complaint by the conservative Popular Party to the Constitutional Court of Spain.


First referendum

A referendum on independence was already envisaged for November 9, 2014. The first question was "Do you want Catalonia to become a state?" In the case of an affirmative answer, the second question was posed: "Do you want this state to be independent?" However, the Constitutional Court suspended the vote.


Clash of the titans

Since January 2016, Carles Puigdemont has been president of the Catalan government. He proceeded with the separatist course of his predecessor Artur Mas and called the new referendum for October 1, 2017. Spanish Prime Minister Mariano Rajoy dismissed this as unconstitutional.

A spokesman for Siemens said a possible independence move was "even more of a shock than Brexit” for his company "and even there we don't know what's happening.”

SEAT staying put

Volkswagen's subsidiary SEAT is headquartered barely 30 kilometers (19 miles) from Barcelona and employs over 14,500 people at three production sites in Catalonia. Of the 449,000 SEAT and Audi cars produced there annually, well over 80 percent of them are exported, to more than 80 countries. SEAT is one of the most important industrial giants in both Catalonia and Spain.

When asked by DW about its future, a SEAT spokesman insisted the company is deeply rooted in Barcelona, Catalonia and Spain, adding that: "We need a stable political environment in order to continue to invest in jobs and economic growth. SEAT said it would continue to closely watch how the crisis evolves.

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Catalonian representative hopes for mediation in dispute

Catalonia is Spain's most important economic region for Germany. According to the regional government, almost 1,000 German companies have a branch office in the northeastern region. As well as SEAT, the chemical giants Bayer and BASF as well as the supermarket chain Lidl have a strong presence there. Germany's total investment in the region was worth half a billion euros in 2015, almost a third of which was by food retailers.

Read more: Fitch joins S&P in Catalonia downgrade warning

More than 400 Catalan companies are represented in Germany, from Cava producer Freixenet to the hotel group Grupo Hotusa. Some 12 percent of Catalan exports go to Germany, which corresponds to a value of more than 7.5 billion euros. Only France imports more goods from the autonomous region.

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