S&P published a specific note on Spain economy on 31/10 where it states that the recent events in Catalonia should not have any immediate impact on its rating nor its outlook (BBB+/Positive). At the same time, Moody’s published a note on Spain which is more cautious about the risks of implementing Article 155.
From 15:25 last Friday afternoon, when the Catalan Parliament made its unilateral declaration of independence, events have speeded up. Three hours after the solemn, but sad proclamation, the Republic of Catalonia disappeared into thin air. Mariano Rajoy dissolved the regional parliament and fired Carles Puigdemont’s government by implementing Article 155 of the Spanish Constitution in the Senate. And the biggest surprise: a call for elections on December 21.
Whether it’s the initiative of the Catalan or Spanish government, Catalonia is this week heading for elections at the beginning of 2018. Some will say the elections are constituent towards obtaining independence and the new Republic of Catalonia. Others will hold the view that they are autonomous elections under the protection of the 1978 Spanish Constitution. In fact what they will be are elections to clarify the current real political map in Catalonia.
Hay Derecho Joven Editors and Javier Cuairán García) | While Mr. Jordi Sánchez, president of the Assamblea Nacional Catalana, and Mr. Jordi Cuixart, president of the Ómnium Cultural, known as the Jordis were sent to preventive prison without bail, Josep Lluís Trapero, the Mayor of the Catalan police Mossos, was granted provisional liberty without bail.
The next chapter of the “Catalan saga” was revealed today. Prime Minister Mariano Rajoy has now warned that on Saturday article 155 of the Constitution will be implemented to suspend Catalonia’s autonomy. And amid this endless craziness, Puigdemont says that if this finally happens, the declaration of independence will be declared.
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.
Link Securities | Despite the ongoing uncertainty in the wake of last Sunday’s referendum in Catalonia, investors returned to the Spanish markets yesterday, buying up both equities and bonds. The main driver behind this renewed interest is the decision by top Catalan banks, Sabadell and Caixabank, to move their headquarters away from their home base.