Spanish Tax Revenues

Spain is in trouble. No matter how things pan out regarding Catalonia, Spain is going to miss out on sorely needed tax revenues.

Even if Spain succeeds in replacing the local government in Barcelona with their own bureaucrats, things will not return to the way things were.

The cat is out of the bag. Everyone in Catalonia now know that they are regarded as Spanish property. The temptation to cheat on taxes will therefore increase. Also, local enforcers of the Spanish tax regime will be inclined to close an eye towards creative accounting. They may even encourage it.

Tax evasion will increasingly be seen as resistance and even patriotism. To cheat Madrid may become as popular in Barcelona as cheating Berlin is in Athens.

Spanish bonds will suffer, as will the Euro. The revenue lost in Catalonia will have to be made up for in other places.