Corporate Finance Advisory and Consulting    © 2013 Hartland Capital - All rights reserved Terms and Conditions | Disclaimer Lessons from Spain Who would have thought that wars of secession were not a thing of the past in Europe? The events in Spain are here to remind us that  no epoch is an island and rarely do the mechanics of history cease to apply.  Luckily for Spain, it doesn’t seem Catalonian independence will actually happen and I will try to explain why this is the case.  To begin with, we have to ask what Catalonians themselves think. It is clear to anyone that the referendum organised by the local  government has no credibility to represent public opinion. Reliable polls into Catalan real thirst for independence suggest while  separatism is strong, it is far from the majority. For one thing, the current secessionist majority in Barcelona has only received 47% of  votes and the number of those who support independence is at a bit over 41%.  However that alone could be compensated by a determined secessionist side and a weak government in Madrid. Yet as it happens,  the prospect of independence is out of the question for the Spanish government and even more so for senior officers in the army for  whom national unity is above anything else.  For now it seems Puigdemont’s attempt has failed but government in a free country cannot simply keep repressing the designs of a  portion of the population whose core identity is increasingly separate and this is not a one-off phenomenon; rather it is the result of an  implacable historical dynamic that must be clearly understood if it is to ever be broken.  To start with there are really three types of national identities: colonial, ethnic and political. The first one does not concern the West.  Remains ethnic nations and political ones. Briefly, there are countries were the people predates the state and countries were the state  predates the people. Some peoples are united by a common ethnicity, based on religion or language or race, to some extent. The state, in that case, is built  as a result of a conscious policy to provide the people in question with a state structure: take the example of Germany, Italy, Japan,  Poland, Israel, Kurdistan (if it happens), etc. Nobody is surprised to hear said in their own times that Beethoven was German, Chopin  was Polish-born, or that Galileo was Italian tough none of these countries remotely existed when these people were alive.  Others countries, like Spain, but also Britain, France, China or Russia were forged by their states. There is no ethnic unity between  Scots and Englishmen, nor Catalans and Andalusians, nor Provençals and Bretons. These groups were initially caught in the same net set by feudal lords along centuries of history that ultimately thrust upon these peoples who were alien to one another the legitimate  feeling that, for lack anything else, they had a common destiny. Along with a common culture built through the long eras they sent  forcibly united, that is enough to make a solid nation, but only as long as those conditions remain.  Yet for years, Catalonia has been ruled increasingly by the local government and therefore less by Madrid. Since it was the fact all  Spaniards were ruled by the same government and therefore had the same destiny that made them a nation in the first place, it is  inevitable that being governed by different powers will drive them apart again.   An alternative explanation that is often heard is that Catalonia is richer than the Spanish average and Catalans do not want to pay for  those in Extremadura, for instance. This however is perhaps a catalyst, but not a diagnosis.  Imagine, if you will, a person with comfortable wealth. If one of his close relatives who is in a difficult financial situation asks for his  help, most likely the person will give it, though he is not responsible for his relative’s problems; if on the other hand it is his neighbour  whom he doesn’t know who is in the same situation and asks for the same help, the person will no doubt refuse it. The neighbour and  the relative are both equally needy and equally worthy as humans, and the person has the same wealth and generosity – or lack of it –  when talking to his brother or his neighbour. Similarly, there are poor people in Catalonia but the rich who voted for independence do not mind supporting them as much as they  currently do all Spaniards. Conversely, people in rich Tokyo do not mind supporting poor regions like Hokkaido, nor did the rich lander  of West Germany think twice before reuniting with their countrymen in the economically backwards lander of the East. There is more  disparity between Paris and Lorraine than between France and Spain.  The issue therefore is not one of selfishness or greed.  It is the essential anthropological fact that people are boundlessly generous  with their kin (family or nation) and relatively selfish with others. The question is therefore why do people feel affiliated with some and  not others? In the case of Catalonia, it is their political unity that bound them to the rest of Spain; now Madrid doesn’t govern them much anymore,  allows the Catalan language an official capacity and as part of the EU anyway, Madrid doesn’t govern Spain as much either. Indeed  why should they feel Spanish?  Nothing is set in stone and Spain has known those borders so long one assumes they are natural; actually there is nothing intrinsic  about them. They were the result of a historical and purely political process which is now being reversed, with predictable results.  Luckily it is not too late. Like I said before, secessionism has not yet reached a majority, so evidently centuries of cohesion cannot be  undone in just a few decades and perhaps for most Catalans, as far as national heroes go, maybe Carles Puigdemont cannot quite  rival Queen Isabel and El Cid. But no doubt separatism would have gained a majority ultimately and for that Rajoy is right to impose  direct rule over the region.  From a basic moral point of view it is right in an egalitarian state that the law should be the same for everyone, which is enough to  reject local legislation. But further, it is likely the only way to guarantee the wilful adhesion of the Catalan to Spain and therefore to avoid having to choose  between secession and repression. There is a lesson in this for all citizens of politically defined nations. Countries like Germany can afford federalism by nature; Switzerland can afford it thanks to its incredible standards of living. Britain or France, for example, are not so solid and should take this warning to stop devolution in Corsica or in Scotland, thinking it is going take the wind out of the sails of the separatists. It will only lead to their victory in the end. Clement Julhia Political Analyst +44 (0)7 392 322 476 Clement Julhia | November 2017