Business leaders push Catalonia in crisis
Bank customers are worried as situation turns critical
MADRID: After the judges, police and politicians, Spanish business leaders are stepping into the ring to resist Catalan separatists’ efforts to break the region away from Spain. Several big companies have announced plans to shift their legal headquarters out of the region after Catalan leaders threatened to declare independence.
They include the region’s two biggest banks, CaixaBank and Sabadell, and energy company Gas Natural.
The move is a precaution against the fiscal and economic turbulence posed by the independence drive. It is also a tactic to pressure the separatists.
Alarm and uncertainty
Having vowed to block independence, the central government on Friday passed a decree to make it quicker for companies to shift their legal headquarters from one region to another. Under the decree, banks are no longer obliged to consult all their shareholders before switching regions. Changing where they are legally registered would save Catalan companies from dropping out of the eurozone if the region did break from Spain, allowing them to retain access to European Central Bank financing. It would also mean their taxes go to the Spanish treasury and not to any new Catalan fiscal authority. Tensions rose this week after separatists held an outlawed referendum last Sunday, marred by police violence against voters. Economy Minister Luis de Guindos blamed the jitters on “irresponsible policies” by the Catalan government.
“They are causing alarm and uncertainty, and that is the worst thing that can happen in the business world,” he told a news conference.
Financial ‘tsunami’
Sabadell announced on Thursday it was shifting its registered base-but not its staff-to the eastern city of Alicante. The next day CaixaBank said it was moving its domicile to Valencia to protect customers and staff due to “the current political and social situation in Catalonia.” Commentator Manel Perez in Catalan daily La Vanguardia called the procedure a strong “symbolic” move by “the world of Catalan high finance, in coordination with the central government.” “It is a tsunami that is rushing over the promised unilateral declaration of independence,” he wrote. Juan Fernando Robles, an academic from CEF business school, said “it is obviously a move to calm financial markets’ and customers’ uncertainty,” in a column in the financial daily El Economista.
But “it is more a cosmetic change than a concrete one, because no one believes that Catalonia is going to become independent.” Some bankers and their customers were privately nervous about the Catalan situation. One CaixaBank branch manager who asked not to be named told AFP that some customers had withdrawn money for fear of losing it. Estate agent Tamara Diez, 36, said she got money jitters as independence tensions mounted. “Two weeks ago I started to get worried and thought of taking our money out of Sabadell,” she told AFP.
“But now that they have moved to Alicante I feel much safer.” Robert Tornabell, a banking specialist at Catalan business school ESADE, said there had been some withdrawals but “not big amounts-there is no panic for the time being.” But he said the banks “have no choice” but to move domicile in the circumstances. “By doing so they exert very strong pressure, because the separatists had promised that no companies would leave,” he said.
The impact on the region could grow with a knock-on effect on banks’ various subsidiaries, insurers and property firms. — AFP