The sink­ing ship syn­drome?

Costa Levante News - - SPANISH NEWS -

News Staff Re­porter WHAT­EVER the out­come of the present Con­sti­tu­tional cri­sis over Cataluña, it has be­come very clear that busi­ness lead­ers have made the de­ci­sion to aban­don the re­gion, at least legally. At present, around 2,200 com­pa­nies have al­ready moved their reg­is­tered of­fices out of Cataluña to other parts of Spain.

Ac­cord­ing to the Na­tional Statis­tics In­sti­tute, Cataluña ac­counts for 19 per cent of Spain’s pro­duc­tion ca­pac­ity and had a GDP of €211.82 mil­lion in 2016. Its 7.14 mil­lion res­i­dents con­sti­tute 16% of Spain’s pop­u­la­tion and en­joy a higher wealth per capita than the coun­try’s av­er­age.

How­ever, a re­cent report from Credit Suisse con­cluded that, re­gard­less of cap­i­tal flight or the costs of adopt­ing a new cur­rency and cre­at­ing new state struc­tures, an in­de­pen­dent Cataluña would lose 20% of its GDP, with a per capita in­come fall­ing be­low the rest of Spain.

In most cases, the de­ci­sion to move a com­pany’s le­gal base out of the re­gion is tech­ni­cal and has not in­volved the clo­sure of op­er­a­tions or job losses, but sim­ply en­sures that the com­pany re­mains of­fi­cially based on Span­ish soil.

It is clearly sig­nif­i­cant, how­ever, that so many CEOs are afraid of los­ing in­vestors and in­ter­na­tional fi­nance, as well as a pos­si­ble boy­cott of their prod­ucts and ser­vices, or of ex­ist­ing in the le­gal limbo of an il­le­gally in­de­pen­dent Cataluña.

The re­gion it­self must be aware of such con­cerns which could lead to fu­ture re­lo­ca­tion, so im­pact­ing on in­come from taxes, as well as gen­er­at­ing un­em­ploy­ment. This must be par­tic­u­larly wor­ry­ing when the mar­ket value of the big­gest busi­nesses which have made the sym­bolic change of their reg­is­tered of­fice ad­dress is around €100,000 mil­lion; that’s al­most half of Cataluña’s 2016 GDP. Last Thurs­day, the day when Madrid con­firmed that Ar­ti­cle 155 of the Con­sti­tu­tion would be ap­plied, a fur­ther 268 Cata­lan-based com­pa­nies an­nounced they were fol­low­ing suit.

Amongst the Ibex 35 com­pa­nies which have taken the step are Spain’s third and fourth largest banks, Caix­a­bank and Sabadell, which are now reg­is­tered in Va­len­cia and Ali­cante re­spec­tively. Gas Nat­u­ral Fenosa now has its base in Madrid, as has Aber­tis, which man­ages mo­tor­ways and tele­coms in­fra­struc­ture.

Other listed busi­ness in­clude in­ter­na­tional prop­erty cor­po­ra­tion In­mo­bil­iaria Colo­nial and tele­coms firm Cell­nex, both now with head­quar­ters in Madrid.

Other big names which have de­cided to move their le­gal bases in­clude tex­tile firm Dogi, on­line travel group Edreams, pub­lisher Grupo Plan­eta and courier com­pany MRW. Of im­mense sym­bolic im­por­tance within Cataluña is cava man­u­fac­turer Codor­níu which is now reg­is­tered in the La Rioja town of Haro.

Zurich In­surance Group and its sub­sidiary Deutsche Zurich Pen­sion, 50% owned by Deutsche Bank, have gone to Madrid, while in­surance and as­set man­age­ment group AXA Spain has moved its two com­pa­nies to Bil­bao. Bread maker Bimbo has reg­is­tered its busi­ness in Madrid while brew­ers San Miguel have opted for Málaga.

In ad­di­tion, a num­ber of other com­pa­nies, in­clud­ing cava maker Freix­enet and su­per­mar­ket chain Lidl, say they will also move their head­quar­ters out of Cataluña if in­de­pen­dence is fi­nally achieved.

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