The Future of Europe: The Spanish Case

How would a collapse of the European Union affect its member states?

By Ryan Bridges

What happens to supranational organizations like the European Union that promise their members prosperity in exchange for surrendering some sovereignty once those bodies can no longer deliver on their promise?

We got glimpses at the answer in the previous decade, as crisis-wracked Greece, Italy, Spain, Portugal and Ireland. Anti-EU forces gained prominence across the bloc, and one country even voted to leave it altogether (though the U.K.’s reasons for doing so are complex and go far beyond the crisis of recent years). And for almost a year, Germany, the growth engine of Europe, has been straining to outrun recession. Whether this race ends in a Great Depression-like catastrophe or just a period of prolonged stagnation, Germany looks likely to lose, and it will inevitably drag the rest of Europe down with it. What does this portend for the EU as a whole? This is a question we’re going to investigate going forward.

First, it’s important to set some boundaries for this exercise. We know that European unity is in trouble, but we don’t know what form the crisis will take. The outcome hinges on questions like whether there is a complete, sudden breakup; a gradual, partial breakup that leaves a rump EU intact; or just a creeping irrelevance and loss of influence from Brussels. If there’s a breakup, it matters whether it is peaceful or violent.

Also critical is the settlement of debt obligations and questions like what happens to a state’s euro-denominated debt if it leaves. What if the euro is eliminated? These latter questions will be especially important for highly indebted states, but for brevity’s sake, we’ll have to leave them aside. We’re also going to assume for simplicity’s sake the most extreme scenario for the EU: total collapse.
The Case of Spain
We’ll focus here on Spain – an oft-overlooked but significant member state with a unique set of circumstances. Spain’s population and economy are both fifth-largest in the EU, with 47 million people and a gross domestic product of $1.4 trillion. Somewhat miraculously, it survived the past decade’s crash, bailouts and austerity, and in 2019 is one of the few Western European economies still experiencing moderate growth.

Setting aside the financial and economic questions, a post-EU Spain’s first challenge would be restoring domestic control. Domestic stability has never been Spain’s strong suit, even in the glory days of the Spanish Empire. Mountain ranges carve up the country, and none of its main rivers, save the Guadalquivir, are navigable (and they don’t link up anyway). This is a recipe for fractiousness, and Spain has its fair share, led by Catalonia and the Basque Country on the northeastern periphery.
When in the 1970s Madrid began the process of applying to join the European Communities, the EU’s forerunner, it hoped the move would dissipate tensions with the country’s periphery. The implication was that centralized authority would be spread simultaneously down to the Spanish regions and up to Brussels. Of course, as we now know, EC and later EU membership did not put Basque or Catalan nationalism to rest. So, an early challenge for the Spanish central government post-EU would be preventing separatists from capitalizing on the chaos and breaking away – which those regions might be more inclined to do if some sort of Western European bloc were to survive sans Spain. It’s especially important for Spain to hold on to Catalonia because it is the second-most populated Spanish autonomous community, it has the fourth-highest GDP per capita, it hosts Spain’s third-most important seaport at Barcelona, and like the Basque region, it borders a major military power in France.

The second priority for Spain would have to be restoring deep economic ties with Western Europe. Forty-two percent of Spanish trade is with France, Germany, Italy, Portugal and the United Kingdom. Spanish workers in France, Germany and the U.K. account for about 40 percent of remittances to Spain, which are an important source of funds for the country, and tourists from those three countries are the leading travelers to Spain. German and French car companies have poured investment into Spain, helping to make it Europe’s second-largest auto manufacturer. The agri-food sector is also a key source of exports, especially to the rest of Europe. Increasing trade with the U.S. would help, but even if Spain tripled its exports to the U.S., the numbers would pale in comparison to its trade with Western Europe. No matter how disruptive the EU’s breakup was, Europe would remain the primary focus of Spanish trade policy.

A close third priority, and the most important challenge for external security and defense, is in the Mediterranean and Maghreb. At the moment, all the challenges to Spain emanating from this region are unconventional – terrorism, militancy, migration and smuggling – and economic disruption would complicate Madrid’s ability to deal with them. EU missions in which Spain participates, like military training missions in parts of the Sahel and anti-piracy operations like Operation Atalanta off the Horn of Africa, would collapse. If France would have to scale back its anti-terrorism Operation Barkhane in the Sahel, it would have significant implications for the counterterrorism effort in the region. In other words, a region that is not a major threat to Spanish security at the moment could become more volatile and therefore pose more of a threat as European powers necessarily pull back.

In that case, Spanish defense cooperation with the United States (as well as France and the U.K.) would take on newfound urgency. With the collapse of the EU’s incipient military cooperation and integration, NATO would be an even greater priority. Located so far from Washington’s main concerns (namely, Russia) in Eurasia, Spain wouldn’t be a top priority for the United States, particularly at a time when there could be conflict elsewhere on the European continent, though it is important to note that southern Spain hosts an American naval station at Rota and air base at Moron. The U.S. and Spain do, however, have overlapping interests in keeping a lid on transnational terrorism in places like the Sahel and Maghreb. And economically, the U.S. is Spain’s sixth-largest trade partner and a major source of remittances to Spain.

The last area of importance would be Spanish relations with Latin America. The historical linkages are obvious, and in terms of trade, Latin America as a whole ranks as Spain’s fourth-largest trade partner, behind only France, Germany and Italy. Spain mostly exports machinery and vehicles to Latin America and imports mostly mineral ores and crude oil (Mexico is Spain’s fourth-largest source of petroleum, behind Nigeria, Algeria and Saudi Arabia). Moreover, Latin America is a launching pad for Spain to trade and build relations with East Asia.

The dissolution of the European Union would be devastating for all involved, but Spain is among that group of countries for which it would be especially traumatic. Spain’s economic and financial problems are well known, but we must also appreciate the political repercussions. More than 100 years ago, as Spain was still reeling from its 1898 defeat at the hands of the United States and from the loss of Cuba, the Philippine islands, Puerto Rico and Guam, the Spanish philosopher Jose Ortega y Gasset declared: “Spain is the problem, and Europe is the solution.”
After the Second World War, it spent decades seeking legitimation through membership in Western international organizations, but membership in the EC eluded Madrid until the death of longtime dictator Francisco Franco. For Spaniards, membership in the EC had a special symbolic significance, marking the end of authoritarianism and backwardness.
This attitude toward Europe goes a long way in explaining why Spanish support for membership and integration has remained so high even after the eurozone crisis. It’s hard to overstate the pain the EU’s breakup would inflict on Spaniards and the Spanish state.

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