Moody's: Spain's credit rating would plummet if Catalunya seceded

Although its forecast is for the region to remain part of Spain, Catalunya represents 19% of the country's GDP – out of 17 autonomously-governed communities, plus the two city-provinces of Ceuta and Melilla on the northern Moroccan coast – and 16% of the population of Catalunya hold an above-national-average personal wealth.

Senior deputy chairwoman for Moody's, Sarah Carlson, and analyst Marisol Blázquez believe the north-eastern region will not become a separate country because of the 'firm and continued opposition' to the move by the central government of Spain, the existence of numerous legal instruments the State has in its power to stop it happening, and polls which indicate that the percentage of the population in Catalunya in general which supports secession is 'lower than the majority'.

Additionally, Catalunya has no legal framework for forming as a country and the lack of a minimum participation threshold in the referendum – meaning that, in theory, even if only three people voted and two of them chose secession, the regional government intends to unilaterally declare independence – would 'probably reduce the legitimacy' of any resulting vote, Moody's says.

It predicts that the political relationship between Catalunya and the State would 'remain very tense', which could 'complicate efforts to reach a compromise that responds to Catalunya's desire for greater autonomy'.

“A greater decentralisation of Catalunya within the scope of Spain as a whole is likely, due to pro-independence pressures,” Carlson and Blázquez say in their report.

They believe the best solution would be to 'satisfy some of Catalunya's principal demands', such as increased financial and tax resources and a reform of the regional financing framework, but 'always in compliance with the Spanish Constitution'.

This 'continued political tension' also presents potentially negative implications for the government of Catalunya, Moody's believes – its solvency level currently sits at Ba3 with a negative perspective, or a 'questionable level of solvency' with 'a high probability of a worsening rating' in the future.

“International confidence in Spain's economy does not appear to be affected at the moment by either world politics or by the drive for Catalunya's secession,” says professor Miguel Ángel Ariño of the International School of Economics in Spain (IESE), which issues the annual Economic Uncertainty Index (I3E).

Spain's Economic Uncertainty rating fell from 51 out of 200 to 43 out of 200 in August after several months of consecutive falls, meaning perceived economic stability levels are increasing.