In a surprisingly statesman-like manner, Carles Puigdemont performed a balancing act in respecting the referendum result, safeguarding his support from the independence movement, and avoiding total escalation with Spain.
After confusing messages from Catalan government about yesterday unilateral but at the same time suspended independence declaration, the Spanish PM Rajoy has decided to trigger Article 155 which will be used to suspend the regional administration and take direct control of Catalonia.
A few days ago, a week ago, the unilateral and seditious declaration of independence in Catalonia seemed to be on the cards, almost inevitable in fact. But the King’s speech last Tuesday and the demonstrations in Barcelona and other cities involving both Spaniards and Catalans have changed the dynamic of the process.
Since the segregation process in Catalonia began, one got the feeling that it would be a serious risk to our country’s economic stability. Spain would pay a high price for the loss of its main economic region, which accounts for about 20% of GDP.
The Catalan government and its parliamentary majority have gone the whole hog to achieve their final objective: a unilateral declaration of independence which brings the Spanish government to their knees to accept their requests with very favourable conditions to construct this new state, whatever it takes.
At the moment, the biggest losers in the Ibex 35 index after Sunday’s referendum vote in Catalonia are the banks, particularly the Catalan lenders. Both Sabadell and CaixaBank have acknowledged that if independence were to happen, they would move their headquarters to another autonomous region in Spain. In this way they would keep their access to the ECB’s liquidity and their clients would remain under the protection of the national and European Deposit Guarantee Fund. But perhaps it’s too soon to ring the alarm bells: while the Ibex dropped, other European bourses rose. This shows that Catalonia is still far from becoming a systemic risk for the EU.
What’s happening in Catalonia? The narrative put together by those in favour of independence is quite incredible: how is that so many Catalans feel so badly treated in a democracy like Spain’s? The crisis in Catalonia threatens the stability of Spain and even the European project.
The Corner | The fiscal situation is one of the arguments the pro-independents in Catalonia have been using. And in this regard, we wanted to share with our readers a snippet from a televised debate between Josep Borrell, a former president of the European Parliament, who describes himself as “Catalan, Spanish and European,” and Oriol Junqueras, leader of the pro-independence Catalan Republican Left (ERC) party.
The predicted train crash between the Catalan and the Spanish governments has now happened. But what’s next? It’s difficult for the referendum to be a success, but the the fact there is no independence in the short-term, doesn’t mean that the train crash is not going to have consequences in the medium-term.
Acting as an “agent provocateur”, Catalonia’s government intends to hold a wholly biased and unrepresentative independence referendum in early October. It knows the outturn will hardly attain half of the potential voters, as only a minority of the population favours an outright split from Spain.