The Spanish economy has, since 2014, experienced the highest rate of growth among the main EU countries, thus presenting the best growth projections in terms of GDP, consumption and exports in the medium term. According to a report compiled by FEIQUE (Spanish Chemical Industry Business Federation), in collaboration with ICEX-Invest in Spain, the Spanish chemical sector comprises more than 3,000 companies, with a turnover of €59 billion, generating 12.6% of the Gross Industrial Product and more than 540,000 direct, indirect and induced jobs.

The country’s chemical industry makes 55% of its sales in international markets, which means an external turnover of more than €32.5 billion, ranking as the second largest exporter in the Spanish economy. Since 2007, the sector has increased its exports by 42%, which shows its high international competitiveness and its ability to penetrate the markets.

Catalonia, a region in the north-east of the country, concentrates around half of all of Spain's chemical production. Three local industrial production clusters can be identified: one of them is located near Tarragona (raw chemicals) and two of them in the Barcelona metropolitan area (consumer chemical products and pharmaceuticals). At present, the chemical sector in Catalonia is made of more than 1,100 companies, most of them SME’s. Several major chemical corporations also operate plants in Catalonia and play a major role not only in the value chain but also in the implementation of front line R&D activities. The chemical industry accounts for 14% of Catalan industrial added value and provides 9% of industrial workforce (more than 60,000 employees). Catalonia is clearly the most specialized Spanish chemical region, representing 50% of the national turnover and exports of the chemical industry.

The Spanish pharmaceuticals sector is also primarily concentrated in Catalonia, with 50% of the laboratories, 60% of production and 66% of the companies that work in fine chemicals. The regions is home to seven of the ten major global pharmaceuticals groups: Pfizer, Bristol-Myers Squibb, Merck, Sanofi Aventis, Novartis, GlaxoSmithKline and Roche.

Hence, it is not surprising that the current political instability in Spain is not only worrying the country's politicians and undustry leaders but also raising eyebrows across the entire euro zone.

The uncertainty comes after Catalonia's regional president, Carles Puigdemont, told the Catalan Parliament in Barcelona last week that Catalonia had the right to be an independent country, citing a disputed referendum on Oct. 1 that showed strong support for secession from Spain. But instead of an outright declaration, Puigdemont said the “effect” of independence would be delayed for several weeks to facilitate further dialogue with Madrid.

Economists disagree over whether withdrawal would hurt the region significantly, or would instead weaken the rest of Spain. Much would depend on the financial and political terms under which Catalonia left, including how Spain’s debt burden would be split and whether Madrid would impose economic sanctions on Catalonia for withdrawing unilaterally. As the Catalan region accounts for a substantial part of the entire country's output, Madrid is no doubt anxious not to lose this vital source of income.

This situation has the potential to seriously impact the future of Europe. It will be very interesting to observe how the Catalonian and Spanish governments further approach the unstable economic circumstances.