Catalonia's Isolation Grows as Largest Bank Heads for ExitBy and
CaixaBank decides to relocate legal base south to Valencia
Crunch comes next week when Catalan parliament is due to meet
Catalonia’s separatists looked increasingly isolated as the region’s biggest bank announced plans to leave and political pressure rose in both Madrid and Barcelona to bring the standoff to a head.
Spanish Prime Minister Mariano Rajoy was resisting calls from his main ally in Madrid to suspend the Catalan regional government, according to a person familiar with their talks. The premier’s office is gathering details on what it would need to execute such a move, another person said. Catalan President Carles Puigdemont, meanwhile, was negotiating the text of a declaration of independence with his group’s more radical partner, El Mundo reported.
As both sides plotted their next move before next week’s likely showdown, the focus was on the financial toll secession talk was taking. The board of CaixaBank SA, the biggest symbol of the rebel region’s wealth and economic clout, decided to relocate its legal base at a meeting on Friday.
QuickTake: The Struggle Over Catalonia
"It’s very sad what we are seeing, the departure of extremely important companies from Catalonia,” Economy Minister Luis de Guindos said at a press conference in Madrid on Friday. "This isn’t the fault of the companies. It’s clearly the fault of irresponsible policy which at the end of the day generates uncertainty and anxiety.”
Puigdemont risks economic damage and being cast adrift by Europe if he pushes ahead with his secession plans based on a referendum that breached Spain’s constitution.
For their part, if Rajoy and his minority government have to step in again to reassert control, they will be loathe to risk a repeat of Sunday’s scenes of police violence against peaceful voters that drew international condemnation and inflamed the separatists.
On Friday, Rajoy’s proxies sought to ease the anger over that crackdown. “We are profoundly sorry because this was not out wish, we didn’t want a single person getting get hurt,” Enric Millo, the central government’s chief representative in Catalonia, said in a Bloomberg Television interview.
The government’s official spokesman, Inigo Mendez de Vigo, also issued a collective apology during a press conference at the same time. “If there were incidents -- and there were -- and people were affected, obviously we are all sorry,” he said.
A new law approved by the cabinet on Friday eased the way for companies to change domiciles, sending a clear message to Catalan leaders that the government will use its administrative muscle to encourage the exodus.
Banco Sabadell SA confirmed late Thursday it will move its headquarters further down the coast to the Spanish city of Alicante, while CaixaBank’s board decided on Valencia.
Gas Natural SDG also yesterday announced that it was moving its registered office to Madrid from Barcelona on political concerns.
The two banks led Spanish stocks lower, with the IBEX 35 index falling as much as 1 percent before paring the loss. It jumped 2.5 percent yesterday on optimism that separatists would step back. The market has reversed its move from the previous day for the past seven sessions. Spanish 10-year bonds fell, heading for a fourth decline this week.
With options to quell an increasingly bitter dispute fast running out, events may come to a head early next week. Puigdemont had sought to evaluate the result of the independence vote at a session of the regional parliament on Monday until it was suspended by the Spanish Constitutional Court. He’s now seeking to address lawmakers on Tuesday.
The regional government said the bid to break away won the support of 90 percent of 2.3 million voters. Many Catalans stayed away or couldn’t vote, with turnout at 42 percent.
“There will be some formula for the Catalan Parliament to convene and hold its meeting as planned,” Jordi Sanchez, who heads the most powerful group among the separatists, known as the Catalan National Assembly, said in an interview in Barcelona. “There will be a plenary session.” Sanchez is being investigated by the National Court in Madrid for possible sedition.
— With assistance by Katie Linsell, Rodrigo Orihuela, Todd White, Maria Tadeo, and Charles Penty