cultură şi spiritualitate
The number of separatist movements is increasing throughout Europe. Not only in Catalonia do many people want to secede. Scotland, Flanders, Corsica and even Bavaria are other examples. From an economic point of view, secession would be loss-making business for all of Europe, but above all for the regions that secede.
Less trade – less prosperity
It is difficult to quantify the exact economic impact of a regional secession. The effects depend largely on how the economic relations are arranged between the seceding region and the rest of the world. What these relations should look like is unclear.
But one thing is clear: initially the region will lose its EU membership and thus its access to the European Single Market. This will hurt the prosperity of the region in many ways:
The weakening of competitiveness makes it less attractive for international investors to continue doing business in the region. As a result, capital flows out of the region and production is relocated. Consequently, the region loses jobs.
Increasing uncertainty also weakens growth
There are additional disadvantages for a region that now has the euro:
All in all, uncertainty about future economic development will increase for a region seceding from a country. This will scare investors away, and falling investment means less growth and less competitiveness.
Source: Author’s own diagram
Economic advantages are marginal
These economic disadvantages are offset by only one advantage: The region no longer has to make any financial contributions to the central government. The funds saved can be used for investments in the region. However, it is very doubtful whether this advantage is capable of balancing out the aforesaid disadvantages.
Uncertainty in restructuring relations with the rest of the world
The long-term economic impact will depend on the restructuring of the region’s relations with its original country, the EU and the rest of the world. It is unclear how these relations will be governed:
Separatism – losses for everyone
All in all, separatist movements in individual regions should hurt both the affected regions and the rest of the world. Our previous calculations – both on Brexit and on a protectionist course adopted by the United States – suggest that a region isolating itself economically will suffer the greatest economic losses.
Separatism does not pay off economically.
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