As the region of Catalonia continues its struggle to break free from Spain, it has been revealed that about 1,000 companies left the area last year due to the rising tensions in the area.
"About a thousand companies left Catalonia in 2014 when the situation was more hypothetical and today the situation is more complicated," according to Javier Vega Seoane, president of a leading Spanish business association.
"No businessman likes to be in a territory where the law is violated."
The group, Circulo de Empresarios, represents owners and top managers of leading firms in Spain, including Spanish banks BBVA and Santander, the US tech giant Google and French transport company Alstom.
"We don't think the secession process will succeed, but if it did, the damage would be significant," added Seoane.
His warnings are similar to some made by large firms in the UK before Scotland's independence referendum in 2014, which resulted in a "no" vote.
Nevertheless, the regional assembly has been charged to start creating legislation for an independent social security system and treasury, with a view to completing independence in 18 months.
The resolution declares that the parliament of Catalonia is "sovereign" and not subject to decisions made by Spanish institutions, including the Constitutional Court.
Madrid swiftly took the matter to the Constitutional Court which will decide on the legality of the resolution.
Ratings agency Fitch slashed Catalonia’s rating to BB, akin to speculative or “junk”, because of the strain between Barcelona and Madrid.
This will make it harder for firms in Barcelona to borrow money and will drive up their financial costs.
The 27 September regional elections catapulted separatist parties into the majority in the regional parliament.
The separatists are aggrieved because they estimate that the region gives more to the central government in taxes than it receives in benefits. Catalonia accounts for 20% of Spain’s economic output.
