[LINK] "Independent Catalonia Would Have Investment Grade: Study"

[rfmcdonald]

Bloomberg's Esteban Duarte reports on a study claiming that an independent Catalonia would be quite financially sound, at least so long as it stayed in the Eurozone.

Catalonia would recover its investment-grade credit rating if it reached an agreement on independence from Spain, according to study to be presented today by an economists’ group from the region.

The region’s government would merit an A+ rating, Standard & Poor’s fifth-highest grade, if it was released from its obligations to the rest of Spain, according to the study carried out by Joan Elias Boada, a former economist at La Caixa, Spain’s third-largest lender, and Joan Maria Mateu, a former finance director for southern Europe at German industrial company Weidmuller GmbH & Co. KG. That’s seven steps higher than the region’s current junk rating of BB, and would put it on a par with Israel and Korea.

“The credit rating of an independent Catalonia, consolidated as a new European state and a member of the European Union, would be logically even better,” Elias Boada and Mateu wrote in the study for the Col·legi d’Economistes de Catalunya.

Catalan President Artur Mas this month called regional elections for Sept. 27 as he seeks a mandate to negotiate a split from Spain. The region transfers about 8.5 billion euros ($9.7 billion), or 4.35 percent of its gross domestic product, per year to the rest of Spain, as tax collection exceeds the public-sector expenditure, according to a July study for the Spanish Budget Ministry.