ETA extortion hurts Basque economy

Madrid — Extortion and blackmail of Basque businesses by ETA fighters will still exact a heavy price on the regional economy despite a ceasefire by the separatist group, companies and analysts say.

ETA called a unilateral ceasefire this month, which may reinforce a boost in tourism experienced during a lull in attacks on Spanish soil since August 2009, they said. But businesses now needed ETA to follow-up with a halt to extortion.

"Terrorism is a risk. There is the personal risk of being a victim of an attack, but also for businesses the risk of being a victim of terrorist extortion," said Javier Gardeazabal, professor at the Basque Country University and co-author of a study on the economic costs of the Basque separatist violence.

Tourist numbers are already up for the northern Spanish region because of the year-long pause in attacks.

The region attracted a record 257,133 visitors in July, up 11.8 percent from the same month last year, according to the Basque statistics institute Eustat.

"The peace of mind created by being able to see streets cleaned of any pro-terrorism signs has helped," said Isabel Muela, tourism chief for the Basque autonomous government.

Since coming to power in the region in 2009, the Basque socialists have launched a programme to clean the walls of graffiti and posters glorifying ETA and their imprisoned members.

Members of Zutik pro independence Basque group (L-R) Amparo Lasheras, Rufi Etxeberria, Txelui Moreno and Marian Beitialarrangoitia give a press conference.

"A reduction in terrorist activity helps the business climate," said Mikel Buesa, director of the economy of terrorism chair at the Complutense University in Madrid. "But in previous truces, the extortion did not stop."

The secessionist group declared in a video statement this month that it had decided to halt offensive attacks, without saying if the decision was temporary or permanent.

Basque business confederation Confebask expressed its disappointment at the ETA declaration because it failed to renounce explicitly "all types of threats, blackmail or extortion."

The Basque union of chambers of commerce Eusko Ganberak also noted that ETA "does not say at any point that they will stop this activity against business … the pressure, the blackmail and the harassment of business chiefs."

The "revolutionary tax" on businesses in the Basque country and Navarra is ETA’s main source of revenue, analysts said. The political wing Batasuna has been cut off from state subsidies since being outlawed in 2003.

Extortion levels had grown to an estimated 3.1 million euros (3.9 million dollars) in the first half of this year from 3.6 million for the whole of 2009, said Complutense University’s Buesa.

"ETA is in a disastrous financial situation. It needs five to six million euros a year just to pay the salaries of its (approximately 300) militants and help its 750 prisoners," he said.

Members of Zutik pro independence Basque group Marian Beitialarrangoitia (L) and Txelui Moreno (R) give a press conference.

It is a climate that undermines business confidence and hurts the regional economy.

From the start of the attacks in the 1970s to 2000, the average loss for the Basque country has been 10 percent of its total economic output, or gross domestic output (GDP), according to the Basque Country University’s Gardeazabal.

The 1998-1999 truce was accompanied by a slight improvement in economic activity, he said.

Buesa estimated even higher losses.

"The Basque country has strayed from its potential economic growth … in these past years its GDP could have been 20 percent higher than it actually is," he said.

It is a situation that has braked development of the richest region of Spain, notably because of its metallurgy industry. Forty years ago, revenue per person was double the average for Spain. Now it is only 30 percent higher.

"Over time, many investments have gone elsewhere," said Antonio Argandona, professor.

Katell Abiven / AFP / Expatica