It's Decision Time for CataloniaBy and
Puigdemont has till 10 a.m. to say if he declared independence
Rajoy is prepared to start process of ousting Catalan leader
Catalan President Carles Puigdemont has until 10 a.m. to tell the Spanish government whether he did, indeed, declare independence last week.
If he says yes on Monday -- or even just ignores the deadline -- Prime Minister Mariano Rajoy may start the process to seize control of the rebel administration during the coming weeks. Catalan television station TV3, which is controlled by the regional government, said Puigdemont will deny Rajoy the clear ‘Yes’ or ‘No’ that he seeks.
Puigdemont is running out of options after he declared independence and immediately suspended it from taking effect, at a regional parliament session Oct. 10. That managed to rile both the government in Madrid and the radical separatists he needs to shore up his majority in the Catalan legislature. Rajoy ordered him to clear up his “deliberate” confusion, setting a deadline for just hours from now.
“The pressure building on Puigdemont is absolutely enormous,” Angel Talavera, an analyst at Oxford Economics in London, said by phone. “Anything that looks at all non-committal is going to make the government act” against his regional government.
Ready for the Response
Separatist leaders are aware that Puigdemont’s response on Monday could fail to satisfy Madrid and are ready for some sort of intervention, a person close to the secessionist leadership said on the condition of anonymity. Any moves to replace the regional government or arrest separatist leaders could be met by street protests, the person said.
Catalonia was a frequent topic for investors chatting on the sidelines of the International Monetary Fund conference in Washington that ended Saturday. Catalonia’s 2020 bonds rose last week, driving the yield down 43 basis points to 2.95 percent.
This week is shaping up to be a possible watershed for the region, a 212 billion-euro ($250 billion) economy that’s seen dozens of its largest companies announce they’ll move elsewhere in Spain rather than face the legal limbo of secession.
If Puigdemont, 54, states clearly he didn’t actually declare independence for Spain’s largest regional economy, his separatist alliance might start to unravel. That sets Catalonia on track toward early regional elections with an uncertain outcome to the balance of power, which currently runs in favor of separatism.
Should the journalist-turned-politicians assert he did declare independence, premier Rajoy is set to use Article 155 of the Spanish Constitution to take direct control of the Catalan administration and sideline Puigdemont and his team. In that scenario, Rajoy eventually would have to call regional elections himself in order to return to normality.
Spain’s largest banks have agreed not to recognize the government of Catalonia if it declares independence this week, El Mundo reported, citing unidentified people in the banking industry.
Rajoy has been clear that he won’t negotiate with Puigdemont until the Catalans withdraw their threat of a unilateral declaration of independence and accept the authority of the Spanish courts. Spain’s Deputy Prime Minister Soraya Saenz de Santamaria on Friday said it still wasn’t too late for Puigdemont to stop the clock on a possible government intervention by returning to the rule of law.
She said the uncertainty in Catalonia was affecting the region’s economy and the government may have to review its 2018 estimate for economic growth if the crisis isn’t resolved.
At least 531 companies have transferred their legal bases out of Catalonia to other parts of Spain since the regional government held a referendum on Oct. 1, El Mundo reported, citing data from Spain’s College of Registrars. Rajoy’s government has said that as well as being illegal, the result was invalid because it lacked basic operational safeguards.
One other option would be for Puigdemont to call regional elections himself. That would bring the Catalan political process back in line within the Spanish rule of law, allow a more measured debate on the rebel region’s future and may buy the president a couple more months in office at least.
The Catalan leader is trying to find a way forward after holding an illegal referendum on independence on Oct. 1 and promising his supporters that, if he won it, he’d formalize the breakaway from Spain within days. Yet since the Catalan government announced that 90 percent of those voting in the makeshift ballot had backed a split, Puigdemont has seen most of the region’s biggest companies shift their legal headquarters to other parts of Spain and faced pressure from the European Union to seek a more orderly solution.
“The end-game looks the same whatever Puigdemont does,” said Talavera. “Catalonia is probably headed for regional elections.”
— With assistance by Esteban Duarte, and Manuel Baigorri