Catalonia: Out of Business?

Catalonia is located at the North-Eastern extremity of Spain bordering with France. The region is similar in size to Belgium,  boasts a population of 7.5 million and amounts to 19% of the country’s GDP. The capital and largest city is Barcelona, the second-most populated municipality in Spain and seventh-most populous urban area in the European Union. Voters have been called upon by the Catalonian parliament to vote on October 1st and express their willingness to become an independent state outside of Spain. The Spanish Government is blocking the process from all sides, creating an institutional and political gridlock with an unclear outcome for Spain’s largest economy. Facing such uncertainties, many private companies are considering relocating to Madrid.  Business, investors and other public and private institutions are worried about similar situations developing in other EU regions as well as the implications for nationwide politics in Spain.

In this snapshot we give an overview of the current situation, look at the larger political context and impact for business and discuss some possible scenarios moving forward.

Juan Rivera is Senior Managing Director at FTI Consulting in Madrid, Pablo Lopez-Alvarez is Managing Director and Carlos Ochoa is Senior Director at FTI Consulting in Brussels.

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