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Catalonia Leans Toward Elections, Not Independence

October 26,2017 13:13

Elections might not be enough to appease the 2 million or so supporters the independence campaign claims to have. The main activist group ratcheted up expectations of a dramatic statement on Friday. The Catalan National Assembly has called its members ...


Catalan President Carles Puigdemont is set to call regional elections, recoiling from declaring independence from Spain as authorities in Madrid finalize plans to oust his rebel administration, according to two people familiar with his thinking.
The president was due to make a statement at 1:30 p.m. before addressing the Catalan parliament in the evening. It was delayed by an hour and then suspended, with signs of dissent among the separatists. Two Catalan lawmakers quit Puigdemont’s party, saying they disagreed with the decision to call a vote while protesters gathered outside his office shouting "traitor."
Senators in Madrid meanwhile are preparing to hand Prime Minister Mariano Rajoy wide-ranging powers to seize control of the region under Article 155, the constitutional tool that would see Puigdemont ousted.
It’s put Barcelona on a knife edge. An election would mark a climb down by the separatist leadership after a week of heightened brinkmanship with Madrid. 
Spain entered a critical 48 hours with Puigdemont facing a make-or-break decision that could either ease tensions or see him unilaterally declare Catalonia a sovereign republic and risk deepening the biggest constitutional crisis in since an attempted coup in 1981.
Marta Rovira, a senior Catalan lawmaker in the pro-independence alliance, said she doesn’t agree with the decision about how to take the separatist campaign forward, but she’s prepared to fall into line. “I respect the president’s decision and his arguments, but I don’t share them,” Rovira said in an interview.
‘Mousetrap’
Spanish shares jumped, with the IBEX Index rising as much as 2 percent. Bonds rallied, the yield spread between Spanish and German government debt narrowing by about six basis points. It was at 113 basis points at 1:55 p.m. in Madrid.
Catalonia’s foreign affairs chief, Raul Romeva, suggested in an interview on Wednesday separatist leaders would consider dropping their demand for independence should the Spanish government offer a palatable way out.
Rajoy has sought to maintain political air cover for his hard line approach as the opposition Socialist Party balked at backing the Catalans into a corner. The Socialists floated the idea that a snap regional election in Catalonia would be enough to stop Article 155 from being implemented.
"The scenario of independence is one that we cannot allow and which will not happen,” Economy Minister Luis de Guindos told Spanish radio on Thursday. He said there was already a "significant slowdown" in economic activity in the region. "They’re caught in a mousetrap. It seems their own decisions are producing vertigo.”
Street Protests
The question is how it plays on the streets. Elections might not be enough to appease the 2 million or so supporters the independence campaign claims to have.
The main activist group ratcheted up expectations of a dramatic statement on Friday. The Catalan National Assembly has called its members to surround the regional parliament from noon, a human shield against Rajoy’s authorities. "Now we have to defend the republic," the group’s leadership said in a text message to its members.
— With assistance by Maria Tadeo, Charles Penty, and Todd White

Madrid,Spain,Elections,Barcelona,Bonds,Debt,Foreign Affairs,Fixed Income,Markets,Europe,politics

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