Fiscal crisis and the Balkanization of Spain: Which way forward?

European Union is not the only multinational polity whose unity is threatened by the Eurozone crisis. Austerity policies of successive Spanish governments, combined with the perceived lack of fiscal autonomy, are adding fuel to the separatist movement that has been gathering steam in Catalonia. The breach facing Spain’s political elites simultaneously presents a threat and an opportunity. Clumsy handling of the crisis might permanently tip the scales in the direction of separatism. On the other hand, a creative solution to current problems might put Spain on sounder fiscal footing, while at the same time facilitating state unity.