Rajoy must help detoxify Spain’s separatist debate

Catalonia’s separatist leaders say they will declare independence from Spain within 48 hours of victory in the independence referendum they’ve called for October 1. Spain’s highest court has ruled the referendum unconstitutional, and the government is determined to disrupt the ballot.
A toxic combination of festering frustrations, nationalist myth, and mismanagement by Madrid has brought Spain to this point. Climbing down won’t be easy for either side, but it’s both possible and necessary.
The regional government of President Carles Puigdemont flouted the law in calling a referendum, and he’s misleading Catalans—much as advocates of Brexit misled British voters—in claiming that secession would be painless. Fact is, separation would be a grave economic risk for Catalonia. Yet Madrid has mishandled the issue as well, by dismissing legitimate grievances and appearing intent on stifling the independence movement by any means necessary.
The irony of this showdown is how unnecessary it is. Support in the region for independence has fallen lately, to around 35 percent. That’s partly through exhaustion, partly because the Brexit example is far from encouraging, and partly thanks to Spain’s economic recovery. Yet the vote’s outcome is uncertain, because many of those opposed to independence may choose to boycott the poll. Whatever the result, separatist sentiment remains strong, and in its response Madrid would be wise, so far as possible, to cajole rather than threaten.
Certainly, Spanish Prime Minister Mariano Rajoy should continue to insist that the referendum is unlawful and does not bind the government. Stern criticism of Puigdemont and his allies is justified. But at the same time, Rajoy should attend to the Catalans’ complaints—for instance, about lack of transparency in federal spending. Successive national governments have let political concerns shape infrastructure investment, neglecting rail and other links in Catalonia. Rajoy needs to make good on his promise to address that.
He also needs to promote a stronger sense of national identity. One way to do that is by encouraging workers to move more freely from region to region, through further reforms in the labor market and the public sector.
One thing that has historically given cohesion to the federal system in the US is the ease with which workers move between states; Spain can encourage that too with further reforms.
Measures of that kind will take years to work, but they can be offered in a spirit of compromise immediately. Between now and the vote, what’s most important is to avoid inflaming passions any further.

—Bloomberg