People in Barcelona holding a combined Spanish, Catalan and EU flag on Spain’s National Day last week © Reuters
The first to go were the banks. Then construction companies left. Now even Catalonia’s iconic Cava producer is considering leaving the prosperous north-eastern Spanish region that is heading helter-skelter towards a declaration of independence.
José Luis Bonet, chief executive of leading Cava maker Freixenet, says he will recommend to his board that they move headquarters if Catalonia declares independence. “We cannot run the risk of being outside the European Union,” he adds.
He warns that being outside the EU would mean a “loss of competitiveness for Catalan products” as they would likely be subject to tariffs. He adds that the process will also be bad for business confidence: “Businesses need legal certainty and we do not have it right now.”
Mr Bonet’s comments come as Catalonia heads into a crucial week, with Spanish prime minister Mariano Rajoy giving the Catalan president Carles Puigdemont until Monday to clarify his position on independence or face potentially extreme actions by Madrid.
Catalonia is a hub of manufacturing, publishing and technology, which accounts for about a fifth of the Spanish economy and a quarter of exports.
This came in the wake of a chaotic and disputed referendum on independence on October 1. More than 2m people turned out to vote to break away from Spain in defiance of Madrid, and in the following days the share prices of the two banks fell sharply.
Investors were worried about the chaos in the region and what might happen if it did manage to become an independence state.
Both Sabadell and CaixaBank relocated their headquarters within days. People close to both banks said the decision was partially motivated by the need to provide certainty that they would remain within the EU.
Under EU treaties, a region that breaks away from an EU member state must reapply for membership. è
Both banks deny rumours that there had been a large flight of capital before they decided to move headquarters, but people close to the lenders say they wanted to safeguard against this happening in the future.
Following the banks, six out of seven companies of Spain’s Ibex 35 stock market index companies based in the region have now said they are transferring their headquarters due to the secessionist challenge, including construction company Abertis. Roughly 20 other large and medium-sized companies from various sectors have made the same decision.
Freixenet’s vineyards in Alt Penedès, Catalonia. The cava maker is considering moving its headquarters out of the region © Alamy
The relocating of legal headquarters does not necessarily mean real jobs are leaving the region. Headquarters can easily be moved back. Spain passed a decree this month to make moving legal headquarters easier.
But business leaders say the departures are a sign of the deep worry in the corporate world.
Luis de Guindos, Spain’s finance minister, recently told the Financial Times that Catalan independence could lead to a 30 per cent fall in the region’s gross domestic product since it would be outside the EU and the eurozone. This number is fiercely disputed by the Catalan government, but has fuelled concerns nonetheless.
Several lawyers, bankers and advisers have told the FT that companies have already been delaying investment decisions in the region until they get more clarity on the political situation. “People are in wait-and-see mode,” says one adviser to several international companies in Barcelona.
Smaller companies are concerned about the political situation as well as larger ones.
Luis Suárez, owner of Kuny, a designer and manufacturer of high-end swimwear, says he is “very worried” that his products would to be subject to tariffs if Catalonia ends up outside the EU. He says he could move some operations out of the region if it becomes an independent country.
Pimec, an organisation which represents small- and medium-sized Catalan companies, wrote to the EU last week warning that tensions in Catalonia could “undermine consumption and investment” in the region and in the rest of Spain, calling on the EU to try to mediate a resolution of the crisis.
Mr Suárez says the political tensions have also caused problems for Catalan brands in Spain. He has in recent weeks removed the word “Barcelona” from some of his brands’ labelling in Spain, because of the negative connotations. Many people in the rest of Spain are furious that the Catalan government is pushing for independence.
Not all companies in Catalonia believe that independence would be negative, however. Francesc Elias, owner of Elias, a manufacturer of water pumps in the Valles county near Barcelona, says the region would benefit from managing its own affairs and not having to pay subsidies to poorer areas of Spain.
“An independent Catalonia would be able to invest more in its own infrastructure, which would be good for the economy,” he says. He also argues that the region would be able to stay in the EU, because it is an important trading hub and economy so it would be in everyone’s interest to reach a deal.
But he says that in the short term, the “uncertainty is bad for business“ and he understands why some companies are moving their headquarters. “I really hope the situation resolves itself quickly.”