Between the sword and the wall: Spain's limited options for Catalan secessionism

We propose a game theoretical model to assess the capacity of Catalonia to become a recognised, independent country with at least a de facto European Union (EU) membership. Support for Catalan independence has been increasing for reasons pertaining to identity and economics. Spain can avoid a vote for independence by effectively ‘buying‐out’ a proportion of the Catalan electorate with a funding agreement favourable to Catalonia. If, given the current economic circumstances, the buying‐out strategy is too expensive, a pro‐independence vote is likely to pass. Our model predicts an agreement in which Spain and the EU accommodate Catalan independence in exchange for Catalonia taking a share of the Spanish debt. If Spain and the EU do not accommodate, Spain becomes insolvent, which in turn destabilises the EU. The current economic woes of Spain and the EU both contribute to the desire for Catalan independence and make it possible.