Catalan leader Carles Puigdemont had until 10 am on Monday 16 October to clarify whether he has declared independence or not. As was widely expected, he answered PM Mariano Rajoy in an ambiguous way, with neither a clear yes nor a no. He has until Thursday at 10 am to avoid the government applying article 155 of the Constitution.
We have reached the next stage in the Catalan crisis. Rajoy’s government – with the agreement of Pedro Sánchez and the Cs – has requested that Catalan president Puigdemont clarifies whether or not there has been a declaration of independence. Otherwise, article 155 of the Constitution will be implemented, implying a limitation on the region’s autonomy. Against this backdrop, Spaniards’ confidence is being eroded.
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.
Until the tense situation in the country is resolved, we believe the Spanish stock market will continue to suffer more than its European peers. As an example of this, in the week up until October 4, Spanish equity funds lost $229 million, according to market data firm EPFR.
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.
Carax Alphavalue | Mrs May’s talk of energy price controls sent the UK sector into a downward spin. The Catalan mess also pushed sharply down the Spanish utilities’ share prices. The only surprise is that it took three days for markets to react to the Spanish risks.
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.
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.