At the end of the day, an independent Catalonia appears unlikely – HSBC

A ‘Catalan Republic’ seems highly unlikely, according to Fabio Balboni, European Economist at HSBC.

Key Quotes

“Ultimately, we remain of the view that independence, for Catalonia, if it even happens, might have to pass through a path of political confrontation with Spain, exit from the EU (and therefore the euro), and economic difficulties”.

“It is difficult to see a scenario where Spain would allow Catalonia to have a legal independence referendum, both because of the risk of opening a Pandora's Box, with other regions wanting to follow, and the difficulties in changing the Spanish constitutions to enable it. To change the Spanish constitution, it takes a two-thirds majority of both houses of parliament, after which parliament is automatically dissolved”.

“The next parliament would then have to vote again in favour of a reform (although this time by a simple majority in the lower house and an absolute majority in the upper house) and finally there would be a referendum to confirm the changes, although not only in Catalonia, but in the whole of Spain. A recent poll undertaken in the Balearic Islands suggests that only a third of the population would support the idea of a referendum in Catalonia (IBES, 15 October)”.