Catalonia's independence drive has sent dozens of firms fleeing as doubts grow over the economy of a region that, while one of Spain's richest, is also deeply indebted and dependent on trade with the EU and the rest of Spain.

The semi-autonomous region accounts for one-fifth of national GDP and is Spain's largest exporter, but as the country's worst political crisis in a generation drags on there are fears businesses will seek stabler ground.

"To return to Catalonia you must be absolutely certain there is no instability," Juan Ignacio Sanz, banking expert at Barcelona's ESADE business school, told AFP. "And that could take several years."

At least 40 large and medium firms have already moved their legal headquarters out of the region, including Spain's third-largest lender Caixabank, energy giant Gas Natural and highway toll group Abertis.

Although no major job losses have yet been announced, it remains unclear if an independent Catalonia could count on tax revenue from departed businesses.

"If what has happened in recent weeks continues, that should make the Catalan government face reality: big firms are leaving and that's catastrophic for Catalonia's tax revenues," Eric Dor, director of economics at the IESEG management school in Paris, told AFP.

Separatists argue that Catalonia is helping to prop up Spain's economy, paying more in taxes than it gets back, and believe breaking from Madrid would allow the region to prosper.

It is, after all, Spain's most visited tourist destination, a major industrial force and a leader in research and development, publishing and new tech.

But it is in debt to the tune of ?76.7 billion - mostly owed to Madrid - and it is unable to borrow directly on financial markets.

"It is inconceivable that [Prime Minister Mariano] Rajoy's government would simply wipe away this debt in the event of a Catalan secession from Spain," said Nathan Jones, a Spain expert and politics professor at Britain's Nottingham Trent University. The crisis is also impacting Spain, with deputy prime minister Soraya Saenz de Santamaria on Friday warning it "imperils" the country's recovery from the financial crisis. Catalan president Carles Puigdemont insists an independent Catalonia would be a vibrant economic member of the European Union.

Source: Khaleej Times