international analysis and commentary

Europe’s regional question


Will Freddy Heineken be proven right after all? Will Europe function better, both politically and economically, if divided into smaller, autonomous regions? In 1992, the Dutch beer magnate published a book called The United States of Europe (a Eurotopia?). In this work he lays out his grand vision for the continent divided into regions which all inhabit five to ten million people. His main argument is straight and simple: small is beautiful. A Europe of autonomous but cooperating regions would cause much less friction than Europe’s current organizational form, based on the concept of nation states. According to Heineken, who died in 2002, smaller regions would be a much better fit considering Europe’s ethnic, historical and cultural variety and differences. Furthermore, he argues, they could be managed much more efficiently and with greater flexibility.

At the time, Heineken’s argument was out of the box, to say the least. He presented his plan the same year the Maastricht Treaty was signed. Europe was moving fast to further integration, quite the opposite direction of Heineken’s Eurotopia. Times have changed, however, and had he published the book today Heineken’s fan base would be much greater. Whether we study the Scottish referendum of 2014, Brexit, the Catalan declaration of independence or the referenda for more autonomy in Lombardy and Veneto, it is clear that the idea of going their own way, whatever that may mean in practice, lures a substantial number of voters. Today Europe seems more like a continent of separation than one of integration and unification.

The key question in this matter, to go back to Freddy Heineken, is: Will small indeed be beautiful? Before we start looking for answers, it should be stated that the public debate on whether smaller, autonomous regions have a politically and economically viable future in Europe has been appallingly poor. Sadly, over the last few years, the debate has been held hostage by demagogues ruling the waves of public resentment, and their opponents claiming that they would steer their countries or regions into the abyss by leaving the European Union – or by parting from Queen and country. Taking aim at each other in a rather childish manner, neither side has made a truly valuable contribution to the argument. The economic (and political) viability of an independent Catalonia or a country like the UK (once it is no longer a member of the EU) can and should only be assessed case by case – and with a long-term view.

As for Catalonia, the economic changes could affect both Spain and the leaving region itself. But the real effects of the region’s declaration of independence will largely depend on the interstate framework that would no longer be developed. In the highly-interconnected and globalized world we live in today, it is almost impossible for a country or a region to isolate itself from its context. At best, it could change its relation to it. Putting aside a thorough assessment of Catalonia’s domestic economy and matters such as access to natural resources, its economic viability as an independent region (or country?) will largely depend on its relationship with the rest of Spain and the world. Will Spain behave like a friendly neighbor, once Catalonia has extracted itself from the yoke of the Spanish constitution? Will other European countries formally recognize the newly-created country? What kind of relationship will it develop with the EU (and with its single market)? Before we have proper answers to these questions – which will take time – all outlooks regarding the economic viability of an independent Catalonia are little more than guesswork. It would be wise to remember a lesson learned from Brexit: all forecasts made before the referendum regarding the economic prospects of an independent UK, appeared to be close to worthless a few months later.

We could try to predict, with a margin of error, some answers to the political questions posed above. Within today’s reality it seems safe to expect that Spain will be the kind of neighbor you do not wish for your worst enemies. And as for the EU, it would be surprising if Brussels would support Catalonia’s separation in the short term. Not to mention the huge internal division and political unrest in Catalonia itself, a factor of great importance that sometimes seems to get lost in the discussion.

The situation Catalonia finds itself in today is not a pleasant one. And it is logical to predict that its economy will take a hit in the months to come. But that does not mean that the wider context cannot change tomorrow. If, for example, other regions in Spain decide to follow Catalonia’s example, things might change on the Iberian Peninsula. And if in a few years the EU, for some reason, finds itself forced to alter its position regarding the concept of regional independence, this might have huge effects on the economic dynamics of Catalonia in the long run. The machinery of European politics can work in mysterious ways.

The question is whether going independent is really worth it. Will the region eventually be an outcast, or will it be a frontrunner in a European trend that is only just beginning. If one really intends to predict Europe’s future, an open mind is necessary. Despite the Europe that we know that has been striving towards an ever closer union, one shouldn’t rule out the possibility that in a few decades time, our continent might look more like Heineken’s Eurotopia. And in such a Europe, the economic viability of autonomous regions, governed efficiently and with more flexible cooperating structures than the current EU framework, might be a lot greater than we think.