When Catalonia Becomes a Risk in the Horizon

Spanish businessmen had refused to include the Catalan secession and the eventual rupture of Spain in their risk management plans so far. After Catalonia’s president Artur Mas words, followed by other three leftist and pro-independence parliamentary groups, the risk of fracture is much more likely.

The bipartisan national and majority response is logical, there will be no referendum because the Spanish law does not allow it. “I neither want nor can” accept the referendum, PM Rajoy said, and the opposition leader agreed.

Catalonia’s main newspaper La Vanguardia points out that there is time for negotiation and reconciliation, but there is also room for disagreement and confrontation.

Markets have not paid attention to this political and existential conflict so far because they did not give it enough importance. But soon they will begin to think that Spain has problems beyond the economic crisis that are actually affecting the recovery.

There are critical moments to come; the first is request of approval of the referendum in the Spanish Parliament, which will entail a negative vote and a tense debate. From this moment begins the home stretch to the consultation, the Catalan government organizing it and the Spanish executive forbidding it. That is the risk, a train wreck difficult to assess.

The truth is the Catalan government wants to convene a consultation that the Constitution does not allow. There is room to negotiate. But we are running out of time and margin to maneuver.