Independence of Catalonia: what will happen to savings and pensions according to experts

Independence of Catalonia: what will happen to savings and pensions according to experts

After the Unilateral Declaration of the Independence of Catalonia carried out on October 27, 2017, and the victory of the independentist bloc on December 21, 2017, the Catalan and Spanish economic panorama may have undergone some changes and planted more doubts among the citizens of the whole peninsula. Therefore, we opened two new debates in our forum on how the independence of Catalonia affects the Catalan economy and also the consequences it can have on the global economy of Spain. We encourage our users to consult all the questions they have about the subject.

The independence challenge occupies daily the covers of the main media of the country, which have already established the great consequences of the independence of Catalonia at an economic level. A coming and going of news that has intensified during the last weeks after the announcement of the consultation and which has even echoed the international press.

Although the scope of the consequences of future independence of Catalonia is difficult to predict, from the comparator bank HelpMyCash we wanted dar answer or at least try some of the most common issues these days haunt head savers, regardless of their ideology, as, for example, what would happen to their savings or their pensions. To do this, we have raised seven experts, among which are journalists from some of the main headwaters of the country and economists, four issues relating to the savings of Catalans. We, therefore, resume the round of questions that we started in September 2015 in the face of the Catalan elections, in which we asked several experts about what would happen to our money if Catalonia became independent. On this occasion, we wanted to have new faces and, of course, with new questions.

This is what we have asked the experts about the independence of Catalonia …


  • It has been speculated on a possible corralito if Catalonia becomes independent to avoid a flight of capital, do you think we should contemplate this scenario?
  • What guarantees do you think the savings of the Catalans would have in an independent Catalonia? Should the outgoing State create its own deposit guarantee fund (FGD) or would the savings continue to be covered by the Spanish FGD?
  • What do you think would happen to the pensions of Catalans who have been quoting in Spain for years?
  • In short, in your opinion, what consequences, positive or negative, would the independence for Catalans and Spaniards have in the short or medium term regarding their savings?

Germà Bel: “The consequences of independence for Catalans would be positive”

1. CORRALITO: And why would the capitals flee from a more productive region with the greater capacity to pay their debts than the state from which it is separated? The risk of default would pay for the theory of flight, not precisely in Catalonia. In the case of independence from Catalonia, what will happen is that banks whose headquarters are in Catalonia now open their headquarters elsewhere in Spain and vice versa; Banks such as BBVA, Santander, etc., would open their headquarters in Catalonia, as they have done in other countries where they operate. This is what has always happened in previous secession cases. From here, depositors would make their decisions about the location of their resources and credits. And, as always, where there is a market there will be business and operators. Access to the ECB’s liquidity is foreseen in and subject to the provisions of chapter 2 of the publication General Documentation on Eurosystem Monetary Policy Instruments and Procedures of the European Central Bank itself (November 2011). In the absence of economic and financial foundations for a corralito, we can also rule out the strictly political, since an artificial and politically induced corralito in Catalonia would devastate the entire Spanish financial system since the Spanish banks are the intermediaries of the debt of the Catalans. And in Europe, whoever pays sends.

2. SAVINGS: It does not have any logic that the Spanish FGD guarantees savings in another State, be it Catalonia or Austria. The secession balance of the Spanish FGD should enter into the procedures for the distribution of assets and liabilities between the Spanish State and the new State. Very likely the Catalan legislator would consider it sensible to have a Deposit Guarantee Fund, which is common in our environment. It is difficult to anticipate the guaranteed amount, but it would most likely fall within the parameters indicated by the EU. The initial endowment could be the corresponding part of the Spanish FGD and the form of financing would be as the legislator decides.

3. PENSIONS: The pension system in Spain is shared. This implies that current pensions are financed with current contributions and an eventual deficit is covered by general taxes (and with the Reserve Fund, already almost liquidated). Therefore, the logical thing (and what happens in the history of secession) is that each State takes charge of the pensions of its residents, for which it would count on the simultaneous income for contributions. What would be the potential of a new Catalan state to finance their pensions? In the first place, productivity is higher than in the Spanish average and the unemployment rate is lower. This, together with the age pyramid, places a Catalan State in a more favorable position than what Catalonia now has as a region. In constant and sound terms: in 2016 (last full year) the set of income and expenses of Social Security (SS system, SEPE, and FOGASA) had a deficit in Catalonia of 1,308 million euros (0.6% of GDP). This represented 7.2% of the total of Spain (where the deficit amounted to 18,096 million euros, 1.6% of GDP). In terms of population, the deficit in Catalonia was 177 euros per inhabitant; in the case of Spain, it was 389 euros per inhabitant, and in Spain without Catalonia, of 430 euros per inhabitant. With these figures, each one can draw conclusions for himself on the prospects of pensions.

4. IN SUMMARY … That the economic and financial perspectives are an important factor in the decision on independence is a matter for everyone. From this, the consequences of the independence of Spain for the Catalans would be positive given the business, economic and fiscal structure of Catalonia, and its current fiscal and commercial relations, and subsequent effects. In the case of the citizens of Spain, I believe that the consequences would depend to a large extent on how this emancipation is used with respect to Catalonia, which would eliminate one of the great and traditional excuses for Spanish institutions used to have a society and an economy subject to control and exhaustive regulation, which eliminates the flexibility that societies need to face the 21st century. Undoubtedly, for Spain, the emancipation with respect to Catalonia would be a crisis that would bring in its midst a great opportunity.

Javier Expósito: “International economic suffocation would make secession unviable”

1. CORRALITO: I do not contemplate such a scenario. But neither that of an independence of Catalonia as the referendum is proposed; Without massive support within Catalonia itself (especially scarce among the business world), an agreement with the State and recognition from the international community, it is practically impossible for it to take place. And in the unlikely event that it is carried out, financial institutions (both Spanish and foreign) have a very internationalized business and the Catalan market (although for some Catalan entities it accounts for around 25% of its business) would hardly make it stagger to the system and, therefore, resort to a measure as extreme as a corralito.

2. SAVINGS: Large companies, including financial companies, have positioned themselves mostly against independence. CaixaBank and Banc Sabadell, the two financial institutions with the greatest weight in the region, have made clear that they would have no qualms about moving their headquarters to another autonomous community, something that the 2015 Capital Companies Law amendment allows without having to be approved by the shareholders’ meeting. In this context, with a transfer of headquarters, banks operating in a supposed independent Catalonia would continue to be part of the European financial system, so that all customers of these entities would be guaranteed their savings (in case of an unlikely bank resolution) a maximum of 100,000 euros, as established by the Deposit Guarantee Fund.

3. PENSIONS: Continuing with the unlikely hypothesis of an independent Catalonia, the pensions currently charged by Catalan citizens should be paid by the Spanish State, having contributed to the Spanish Social Security. The problem would come for the future retirees, who would have paid a few years for Spain and others for supposed independent Catalonia: then an agreement of both parties would be necessary for the payment of said benefits. It would be a case that, saving the distances, could be assimilated to the problem in which the 12,000 Spanish fishermen who worked in Norway and who now litigate for their pension are immersed, due to the lack of agreement between the Spanish and Norwegian states.

4. IN SUMMARY … The lack of agreement between the Government and the Generalitat precludes de facto independence, which was recognized by the European Union and the rest of the international organizations. If after the 1-O the Catalan government went ahead, international economic suffocation (exit from the EU, the establishment of tariffs, change of corporate domicile of companies, transfer of foreign investments to other regions of Spain, etc.) would make it unfeasible the secession. And, although the citizens’ savings would not have to be diminished by having the backing of the European financial system (assuming that the banking entities moved their headquarters out of Catalonia), the uncertainty that would be transferred to international markets would harm both parties in the short and medium term. After all, the money usually escapes scenarios of uncertainty, and the separation of the autonomous community makes a greater contribution to Spanish GDP (about 19%) would so touch to Spain and Catalonia itself.

Héctor Chamizo: “Catalonia would have a hole of about 4,700 million euros in its pension system”

1. CORRALITO: Of course you can contemplate a scenario of capital flight. The strongest financial institutions in Catalonia have said on more than one occasion that before an independence scenario they would take their headquarters out of the region. This is just a sample of the fear of a leak of deposits. Money is always scary. We have seen it in other situations such as in Cyprus or Greece. An independent Catalonia would bring global uncertainty, leaving the European Union and the euro, and increasing its level of debt to be denominated in the single currency (before the foreseeable distribution of a new currency more devalued). Therefore, the corralito to avoid massive escapes of money would be inevitable.

2. SAVINGS: I understand that the citizens registered in Catalonia could have some difficulty in this situation that I consider quite unlikely. The outgoing State would be the one that should be in charge of creating its deposit guarantee fund. In a situation of independence, the Spanish State would no longer have those powers that it has today. Even if CaixaBank or Sabadell changed its fiscal domicile, outside Catalonia the Spanish State would not intervene to save the deposits and savings of the Catalans. That question would, therefore, be the responsibility of the Catalan State.

3. PENSIONS: We are facing the same dichotomy as in the previous question. If the rents have been generated outside the borders of Catalonia, the Spanish State would be in charge of giving back to the Catalan citizens. In the event that these rents have been generated within Catalonia, pensions would be paid by the Catalan State. Pensions would have been quoted in Spain previously when Catalonia was part of it, but once independence is declared, all that has been contributed in Catalan territory belongs to the new State.

4. IN SUMMARY … I do not see any positive consequences for any of the parties. Catalonia would have a hole of about 4,700 million euros in its pension system, would stop being in the European Union, its leverage would advance and automatically go bankrupt. The rest of Spain, in turn, would have to see how it covers the 18.9% that is the contribution of Catalonia in the set of GDP. The two parties would lose a lot, although it would have many more difficulties in the short term Catalonia.

Pau García: “The theory of capital flight is denied by facts”

1. CORRALITO: Without a doubt, I do not think so. The theory of capital flight is denied by facts. In recent years procés captured foreign investment in Catalonia has not only grown. Large companies like Amazon have made and projected large investments. Therefore, if there has been no escape in the most uncertain times, once the period of more uncertainty has passed, it would not make sense that there would be any. Money is very pragmatic and Catalonia is an economically dynamic and attractive area to invest, no one will leave if it can continue doing business.

2. SAVINGS: If Catalonia becomes independent, there will have to be a negotiation with the Spanish government. It is impossible that there is not, since it would harm both parties. Once again, pragmatism will have to be imposed. Just as we should talk about how assets and liabilities are shared, one issue that would be on the table is that of the FGD. In this sense, I have no doubt that the savings of the Catalans would remain the same or more protected than they can be now.

3. PENSIONS: A common argument among unionism is that pensioners would stop charging in an independent Catalonia. I disagree to the maximum. To begin with, the Spanish pension system is a contribution, not a capitalization. That is, pensions are paid with the contributions of current workers; There is no charge for any piggy bank where each worker has accumulated their contributions. Catalonia, having an employment rate and an average salary higher than the Spanish average, would have even better guarantees to pay pensions than the whole of Spain has now. Another issue, in addition, is that independent Catalonia could address the undeniable reforms needed by a system that in Spain is becoming unviable with the exhaustion of the reserve fund and the demographic evolution. In VIA Company you can find an article (in two parts) of the economist Iván Aguilar that exposes it perfectly in great detail.

4. IN SUMMARY … In the short term, I do not think it has much effect on the savings of Catalans and Spaniards. Once again, I believe that beyond incendiary political speeches, come from the part that comes, the economy is the most pragmatic there is. Everyone would adapt quickly to the new situation and in the short term, I do not think it would have any effect. In the long term, I do believe that a Catalonia without the fiscal deficit and with the capacity to create its own policies (of infrastructures such as finishing the Mediterranean Corridor, for example) would be one of the most interesting economies in Europe. If it is able to create a small, efficient and open state to the world (like Denmark or the Netherlands), the savings of the Catalans would surely benefit from this good progress. For the savings of the Spaniards in the medium or long term, without Catalonia, it would be a little harder to pull ahead without reforms that end with a State that rewards large oligopolies and punishes SMEs and the self-employed.

Miriam Calavia: “An independent Catalonia should have its own Social Security”

1. CORRALITO: The risk always exists, but I see it unlikely. The Government is already taking measures to prevent a referendum that has been declared illegal by the courts and, furthermore, I believe that Catalan citizens are not fully aware of the legal and financial consequences that unilateral independence can have. They have not explained well what would happen after a yes to the separation of Spain.

2. SAVINGS: The Government should have this planned and guarantee the savings of the Catalans because I do not believe that a Catalan citizen in favor of independence wants to lose all their savings for having supported the process. Many Catalan savers have asked in their respective entities what would happen in case of declaration of independence. It is not very clear what would happen to the accounts and deposits, given that it is the Spanish Deposit Guarantee Fund that covers sight and fixed term savings up to 100,000 euros per client and entity. According to the Bank of Spain, the Spanish FGD only guarantees the deposits of those banks that are part of the fund and that “have their registered office in Spanish territory”. The Bank of Spain does not contemplate in its regulations what would happen if a Spanish autonomous community becomes independent, so I suppose there should be an agreement between the parties to reach a solution.

3. PENSIONS: The Govern said a few months ago that would guarantee the collection of pensions even with a bridging loan if Spain did not pay. I think that Catalan politicians should have this subject studied and well tied because the consequences of leaving pensioners without their pay can be catastrophic. An independent Catalonia should have its own Social Security.

4. IN SUMMARY … I think that if everything was well thought out and controlled, there would have to be problems. The Catalan leaders in favor of independence should have this matter controlled so that the day after there would be no problem. Only they know for sure if they know how to manage this or not. Everything will look if you really get to be an independent Calaluña, I doubt that will happen, at least as it stands now raised the process.

Arturo Criado: “If a unilateral independence is reached, the exit of the euro would be automatic”

1. CORRALITO: If the Catalans really contemplated that an exit from Catalonia could take place, they would have already withdrawn their deposits from the main banking entities. However, this has not happened for now. Therefore, it seems that this radical scenario is not contemplated. Now, if a unilateral independence is really achieved, the exit of the euro would be automatic. Therefore, it would be necessary to convert those deposits into a new currency and, therefore, it would be necessary to carry out a corralito to prevent people from taking their savings. A process for which, in addition, banks would not be prepared to do it from one day to the next.

2. SAVINGS: There is no doubt that we will have to start a negotiation period on how the disconnection develops. Especially because, once the independence is produced, the entities with a banking license in Catalonia would be outside of Europe and, therefore, they would no longer be able to operate in Europe. That implies that they would not be covered by the current legislation. However, it seems imprudent to think that any government wants to risk the possibility that the citizens of Catalonia can lose all their money. Therefore, I understand that this would have to be negotiated so that, at least at first, there may be a minimum guarantee for savers.

3. PENSIONS: We return to the previous. It would be necessary an agreement between the parties so that, through an agreement, Spain would pay the pensions of those citizens who are already charging. Do not forget that the pension system is a distribution system; that is to say, that the current workers pay the pensions of the previous ones. Therefore, once the disconnection occurred, the State would have no obligation to pay such pensions. In fact, there are antecedents to it. The independence of the Sahara in 1975, when after disconnecting from Spain, it stopped paying any pension that could exist.

Albert Grau: “Catalonia can guarantee pensions, but Spain without Catalonia, no.”

1. CORRALITO: One of the arguments against independence is that Catalonia would be left out of the euro and its banks would not have access to ECB financing. This would cause a supposed economic cataclysm (with corralito included). Well, if the Catalan banks become Spanish, it will be clear that they will have access to finance in the ECB and, therefore, the argument of the corralito and the financial cataclysm loses all the credibility of the world. And, by the way, that some of the Catalan financial institutions put their headquarters in Madrid does not mean that it takes neither the branches nor the cashiers or anything relevant. Finally, most of the business of these entities are and resides in Catalonia and no smart bank can easily give up. There are many banks in the world that are willing to take the business of these entities in Catalonia.

2. SAVINGS: In a Catalan state, the rating of the Generalitat’s debt would pass from the current “junk bond” in the credit rating of AA- and this would allow it to finance itself normally in international financial markets and stop relying almost exclusively on the discretionary and conditioned mechanisms that the Spanish government has established through the Autonomic Liquidity Fund. In addition, it would not have in any case a debt superior to the one that Catalonia has at the moment within Spain. The Catalan debt plus what is inherited from Spain, analysts say, “would be acceptable for the Catalan economy”, since it would be below the average of European countries and would represent savings of between 30% and 52% in relation to with the current situation. Regarding the FGD, creation of a Deposit Guarantee Fund at European level to give confidence to all depositors that their money is insured. This is especially advisable when governments like the Spanish use the FDG money for operations that do not correspond to their objective and threaten to make the deposit insurance money disappear. The new European DGF should be the seed of a genuinely European new financial system where regulation, supervision, and recapitalization is in the hands of Europe and not individual countries.

3. PENSIONS: Catalonia contributes 29% of the total Social Security Reserve Fund with only 16% of the population of the entire State. Between 1995 and 2011, Catalonia contributed 24,126 million euros or, which is the same, 3,200 euros per inhabitant. And, meanwhile, what did the rest of the State do? Well, it contributed a deficit of 82,704 million euros, the equivalent to a loss per inhabitant of 1,735 euros. Catalonia has more contributors per pensioner than Spain, that is, can guarantee pensions, but Spain without Catalonia, no. One of the arguments put forward by those who want to scare Catalan pensioners is that in 2011 the contribution of Catalonia to the fund was negative, specifically it could not put 2,876 million euros. But what they do not say is that the same year the rest of the State left owed Social Security 25,867 million.

4. IN SUMMARY … Several studies have calculated that comparing income and expenditure, Catalonia would have “a net profit of 13,618 million euros” separate from Spain, a figure equivalent to 7.1% of GDP. The positive figure would be obtained from the difference between the 49,018 million additional revenues that Catalonia would have by raising 100% of taxes and the 35,400 million additional expenses that would assume the state powers, such as defense or finance. “Catalonia is completely viable as an independent State in terms of its Treasury”. Therefore, there would be an improvement in the benefits received (unemployment, pensions) for the improvement of the collection.

If the republic is approved after the referendum in Catalonia, would there be a corralito?


Most of the experts consulted consider this scenario unlikely. Germà Bel dismisses it and, in addition, she wonders why the capitals of a more productive region and with greater capacity to pay their debts would flee than the State from which it is separated. Pau García, for his part, adds that “Catalonia is a dynamic and attractive area to invest” and, therefore, “no one will leave if they can continue doing business”. In what several agree is that in case of independence, the Catalan bank would open offices outside Catalonia, which would allow them to have access to ECB financing.

Among those who have a less positive view of a possible declaration of unilateral independence, they believe that the uncertainty and the possible exit of Catalonia from the euro would cause a flight of capital and a corralito would be the way to stop it. Héctor Chamizo remembers, for the occasion, the situations experienced in Cyprus and Greece in 2013 and 2015 respectively, when both countries established a corralito to avoid a massive withdrawal of deposits.

Would the savings of the Catalans be guaranteed?

Would the savings of the Catalans be guaranteed?



From the statements of the experts, it can be inferred that the Spanish FGD would no longer have competences over the savings in Catalonia; however, several points to the need for Catalonia to create its own guarantee fund to ensure savings for Catalans.

Remember that now the savings deposited in Spain or in any country of the eurozone are guaranteed up to 100,000 euros thanks to the guarantee funds. If secession were to occur, the banks based in Catalonia would cease to operate under the umbrella of the national FGD and the savers would lose that guarantee. In this sense, Javier Expósito points out that if the entities changed their headquarters to Spain, “the banks that operated in a supposed independent Catalonia would continue to be part of the European financial system so that all customers of these entities would have their savings guaranteed.”

What would happen to pensions?

What would happen to pensions?



If we pay attention to the experts surveyed, each State would be responsible for paying the pensions of its citizens. In this sense, Miriam Calavia points out that “an independent Catalonia should have its own Social Security” and Albert Grau believes that a separate Catalonia can guarantee pensions.

With regard to the pensioners who already receive their benefit at the moment, Javier Expósito and Arturo Criado consider that the Spanish State would continue to pay such pensions. That yes, “would be necessary an agreement between the parts so that, by means of an agreement, Spain paid the pensions of those citizens who are already charging”, Criado points out.

Other consequences of the independence of Catalonia

Other consequences of the independence of Catalonia


There is no consensus on the consequences of the emancipation of Catalonia from the Spanish State. There are several who think that the exit of Catalonia from Spain would have positive consequences for the new State, while others are not so optimistic, neither in regard to the situation of the outgoing State nor the context in which Spain would remain.

To make this report on the possible independence of Catalonia, HelpMyCash has sent the previous questionnaire to some thirty journalists, teachers and economists. This page will remain open to publishing the answers of all the experts who want to participate.