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SCOTT SIMON, HOST:

This is WEEKEND EDITION from NPR News. I'm Scott Simon. And yesterday, the European Union, beleaguered by the eurozone debt crisis, won the Nobel Peace Prize. The Nobel committee awarded the prize for the EU's role in helping to bring a measure of peace and stability to a continent that's known centuries of war. We're going to focus now on how the EU's financial problems have been playing out across three member states. We begin with Spain. The dismal economy there has residents of its richest region, Catalonia, wondering if they'd be better off going alone. With their own language and distinct culture, Catalans have long felt different from Spain. And now they've chosen one of the worst moments in Spain's economic history to try to make independence a reality. Lauren Frayer reports from the Catalan capital, Barcelona.

JOSE MARIA BORRAS: (Spanish spoken)

ANTONIO CANOSA: (Spanish spoken)

LAUREN FRAYER, BYLINE: Retirees in their mid-60s, Jose Maria Borras and his lifelong friend Antonio Canosa sip coffee in the same Barcelona square where they went to grade school. They grew up under the military dictator Francisco Franco, who prohibited the Catalan language, festivals and any talk of independence, Borras explains.

BORRAS: (Through Translator) It's been a long struggle for freedom. Back in those years, if you were in this very schoolyard speaking Catalan, you'd be punished.

FRAYER: Now, these two friends chatter away in their native tongue, in a square adorned with Catalan flags. Canosa chimes in.

CANOSA: (Through Translator) Man, the Franco years were bad for us. Then finally democracy arrived, and we had some good years. But now the economy has brought back another form of tyranny - budget cuts from Madrid.

FRAYER: The economic crisis has exposed what Catalans see as a flaw in Spain's tax system. Rich regions like Catalonia pay more tax, and that money is spread around Spain. But now with Madrid short on cash, Catalan taxes are paying central government salaries and rising interest on Spanish debt. Catalonia gets less back in return to pay its own bills. The region is bankrupt, along with five others, all asking for bailouts from Madrid, of all places. Catalan President Artur Mas told reporters last month he wants to renegotiate that tax system - or else, he'll push for independence from Spain.

PRESIDENT ARTUR MAS: If there is not an agreement on the economic basis, you know that the way of Catalonia for freedom is open.

FRAYER: Mas has called for early elections next month, seen as an unofficial referendum on secession - something Madrid calls illegal. The Spanish constitution doesn't say what happens if one region wants to break away.

(SOUNDBITE OF PEOPLE OF CLAPPING AND CHEERING)

FRAYER: More than 1.5 million people flooded Barcelona for a recent independence rally. If their wish comes true, Catalonia would be Europe's 28th sovereign country with an economy the size of Portugal's. But Catalans need to proceed with caution, says economist Morten Olsen, at IESE Business School.

MORTEN OLSEN: Right now, there's a lot of feelings in it. So, it's not that Catalans think they should be independent, they feel they should be independent. And the discussion has not made it to a point where we're sitting down and making a careful analysis of the cost and benefits.

FRAYER: Olsen says it's true that Catalonia pays more in taxes to Madrid than it gets back. But that's also true for New York or London - any wealthy area in any country.

OLSEN: It's very simplistic to say we have estimated that we send 8 percent of our income to Madrid. Therefore, if we were independent, we would be 8 percent richer. That's missing all the benefits that Catalonia gets from being part of Spain. Catalonia doesn't need to have its own army, it doesn't need to have its own embassies in countries around the world; all of these administrative things.

FRAYER: Spain's ruling conservatives vow to stop any official referendum on Catalan independence. One lawmaker even suggested that Spain send troops to Barcelona. That makes Catalans shudder, remembering the Spanish Civil War and the Franco years that followed. Some even draw comparisons to the Balkans. Lately, the row has moved to Spain's beloved soccer fields.

CROWD: (Singing in Spanish)

FRAYER: Barcelona fans held up red and yellow placards to transform the city's soccer stadium into the largest-ever Catalan flag at a recent match against arch-rival Real Madrid. Again, they chanted pro-independence slogans. The game tied 2-2. And just like the politics over Catalonia's possible break from Spain, the two sides remain deadlocked for now. For NPR News, I'm Lauren Frayer.

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