Doubt is investing's worst enemy, whether political or economic. Reacting to the crisis affecting all of Spain, Catalonia leader Artur Mas has sowed more doubts among international investors concerning his attempt to secede from Spain. Catalonia's government is trying to obscure this fact, but the numbers clearly show that breaking from Spain could have ruinous economic and social implications.
These are not futile threats from those who do not want Catalonia to secede, as some are suggesting. The effects of uncertainty about the region's secession are already having an effect there. According to a study from Convivencia Cívica Catalana, in the second quarter fell 66% less investment from foreign capital year-to-year, slumping from 787 million to a historic low of 267 million. The crisis alone does not account for slack investment, because other regions such as Madrid have received six times that amount in the first half of the year.
Of course, another factor is Artur Mas's inability to control the region's deficit and debt even though the government is trying to blame this failing on separate issues. There is still time to reflect and analyze the negative consequences that would result from a split -- for Catalonia and Spain. Mas and Rajoy need to find some middle ground.
