Late yesterday the Catalan government declared unilateral independence. But, at the same time, it suspended this situation to allow for negotiations with the Spanish government. In response, the Spanish PM Mariano Rajoy called an extraordinary meeting of the Council of Ministers this morning to dicuss how to proceed after Puigdemont’s announcement. Finally, Rajoy’s government has made a formal request to the Generalitat for confirmation about whether they have declared independence or not. This is the first step to trigger Article 155 of the Spanish Constitution, which has never been used before and would allow Madrid to suspend the regional administration and take direct control of Catalonia.
Rajoy has insisted that his government just wants to provide the Spanish and the Catalans with “certainties” and “clarity”.
The main opposition party PSOE has already given Rajoy its support, which was absolutely neccesary to take definitive measures to solve Catalonia’s crisis. This agreement between the ruling PP and the opposition has been reached after negotiations about a further constitutional reform including a legal provision for the region of Catalonia within Spain. This is a historic agreement, given that a reform of the constitution has demanded for a long time.
The route to Article 155 is not inmediate and may take a few days. Even if the institutions treat a potential Spanish government request to take action with urgency, it might take two or three days for the government to have the Senate’s ‘green light’, which is the political institution that needs to activate the Article.
The index Ibex35 has consolidated the significant increases of today opening. At 13: 30 the index gained 1.48% standing near 10,300 points, at 10,292, and leading rises in European markets: Francfort and Milan climbed by 0.04% against drops of 0.o7% and 0.11% of London and Paris, respectively.
Finally, the Spanish 10- yrs bond yield was at 1.67%, while the country’s risk premium amounted 121 basis points.
