11/06/2021

Cercle d'Economia and the Madrid problem

2 min
The PP candidate on 4-M, Isabel Díaz Ayuso, at the end of the campaign.

Since the 1990s, when academics such as Antoni Castells and Núria Bosch began to study fiscal balances between territories in Spain and the so-called capital effect which favours the concentration of resources in Madrid, much has happened. With time, and many economic arguments later, a discourse that at the time and until much later was identified with nationalist (and later pro-independence) positions is beginning to make a dent in other areas, even outside Catalonia. The denunciations of the financing system and the effects of the State on Madrid's economy are no longer exclusive to Catalonia. It is significant that the latest in-depth report on how Madrid sucks in resources was signed by the Valencian Institute of Economic Research (IVIE). Well, in this context, the Cercle d'Economia yesterday took a strong position on this issue and stated: "Madrid cannot suck in resources from the rest of Spain. Ignoring its role as capital can cause ¡strong disaffection in the rest of the country".

The fact that an institution like the Cercle joins in the denunciation of the role that Madrid is playing in Spanish development is important. It means that a part of the Catalan business community, largely critical of sovereignism and the Independence bid, has become aware of the truly distorting element Madrid. It now threatens the development of the Spanish economy through its tax dumping and large fortunes and the disproportionate concentration of both civil servants and state bodies. It is important that this discourse has been adopted before access is gained to European Next Generation funds, which threaten to be distributed in a centralised way by the Spanish government. This casts doubt on whether the weight of the Catalan GDP and the character of small and medium enterprises of the entrepreneurial network will be respected.

The Cercle also backs an increase in the weight of industry in the Catalan economy and regrets that until now Catalonia has not taken good advantage of the funds that have arrived from Europe. It is a partly unfair criticism because the situation of relative wealth of Catalonia in Spain as a whole has meant that these funds have mostly gone to other territories or, failing that, that they have been used to build infrastructures that connect with Madrid. One way or another, Madrid always benefited from the obsession of successive Spanish governments to build a great Paris or a Federal District. Perhaps now we are beginning to see the price being paid by the rest of the state, especially in the territories of what is called "emptied Spain", the great victims of Madrid's hypertrophy driven by state decisions.

In any case, Catalan businessmen of the Cercle have to reflect on why they have allowed this model, which clearly harms the Catalan economic fabric but also Spain as a whole, to go ahead. Or at least why they did not raise their voices enough or try to exert their influence to stop it. Perhaps out of fear of appearing too Catalanist? Of being considered Catalan nationalists by Spanish nationalism? Madrid has now shored itself up, as Ayuso's victory proves, and it will be difficult to reverse it. At the very least, the Spanish government needs to know that beyond Madrid's suburbs perhaps one day a different Spain will be built that will create wealth beyond the capital and that, at the very least, it is accumulating "disaffection".

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