As usual, Edward Hugh has some of the most interesting and useful things to say about the current state of the euro crisis, in a long interview at his Spanish Economy blog. It’s long, but a pretty thorough overview of the problems facing Europe — perhaps most significantly, how and why there is such a contagion risk, even in healthier economies like France and Austria.
He ends the interview with some really interesting thoughts about the economic situation in Spain and Cataluña. Not only is the Catalan economic engine paying for much of the debt around Spain (Hugh says Cataluña has a fiscal surplus with the rest of Spain equal to about 8 percent of its GDP), but apparently if Cataluña were to declare independence, it would legally be free from all Spanish national debt. Basically, if it were independent, Cataluña’s economic situation would instantly be pretty strong and the rest of Spain would be instantly bankrupt. So far, this fact has not done much for Catalan independence, but one wonders if it will be a factor in the future.
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