Regional separatist movements support the EU and Eurozone so are not an immediate breakup threat, but they might still undermine the common currency over the longer term.

Renewed fears of a Eurozone breakup in the wake of Catalonia’s vote to secede from Spain are likely overbaked although multiple separatist movements in Europe could still prove a challenge to the common currency bloc over the longer term.

Economists studying the likely implications of a Catalan break with Spain, and several other regional independence pushes, have concluded that these do not pose as significant a risk to markets as some had come to expect. At least not in the short term that is.

“There is one overriding point to make: in contrast to concerns about nationalists seeking to withdraw their countries from the euro-zone, regionalists present far less of a threat to the single currency or the euro-zone economy as a whole,” says Stephen Brown, a European economist at Capital Economics.

Of note, there are other regional independence movements in Spain, as well as in Belgium and Italy. Scotland in the UK still a nationalist movement that wants the country to break out from its current relationship.

Sunday’s Catalan referendum was marred by violence, after Spanish authorities attempted to stop the vote, and it could yet produce a unilateral declaration of independence from the province later this week.

Catalonia: Possible Divorce Outcomes

There is consensus among the majority of observers that a Catalan break with Spain will not happen as it would mean severe economic damage, brought about by the province’s departure from the European Union and the Eurozone by default.

“What seems clear to us is that a unilateral declaration of independence by the Catalan government is not a viable option,” wrote Bruce Kasman, head of economic research at JPMorgan, in a note ahead of the referendum.

But, it seems reasonable to assume, a separatist push for independence so resolute that it can only be dealt with by force cannot be left unaddressed either.

“The Basque Country already has far greater autonomy and a much more advantageous fiscal deal than Catalonia, and independence is no longer a major issue,” notes Capital Economics’ Brown.

If a special deal facilitating greater autonomy from Madrid proves unworkable, one other solution could be a negotiated separation, rather than a sudden sharp departure.

“It would be almost impossible for Catalonia to secede by a unilateral declaration. If it became independent through a detailed bilateral agreement, then it might cause only moderate economic disruption for Spain,” adds Brown.

Catalonia is a wealthy province of Spain that plays host to some 7.5 million inhabitants as well as the cultural and economic powerhouse that is Barcelona.

Breakup Threat Low But Questions Could Linger

Fears of a fresh bout of breakup risk ripened, temporarily, before and after the Catalonia vote, leading to some temporary weakness for the Euro, which could renew if the province declares independence this week.

“In most cases regionalist parties still favour EU membership,” says Brown, underlining the consensus among both regional and national independence proponents.

Even Scotland, currently in the UK, wishes to rejoin the European Union but as an independent country so, with the French and Dutch elections out of the way, almost all Eurozone countries that are subject to independence movements or populist insurgencies are unlikely to seek a breakup of the EU or the Eurozone.

But many an economist or financial strategist has lamented the move to build a monetary union in Europe without the simultaneous construction of a fiscal union.

Some have even made their views on whether the Euro can survive as a currency contingent on fiscal integration over the medium to longer term.

“Increased demands for regional autonomy appear at odds with recent proposals for greater fiscal integration within the euro-zone, and could therefore be a barrier to fiscal union,” says Capital Economics’ Brown.

So while the real danger of a separatist-induced Eurozone breakup coming into view on the horizon now appears slim, independence movements may still undermine the bloc’s progress, although only over the longer term.

This appears the case because if separatists are unable to accept high level decisions being made from Madrid, Brussels, Milan or London - they're very unlikely to be willing passengers on the ride to greater fiscal integration in the Eurozone.