Spain: Catalans to seize their moment within the next 36 hours – Rabobank

Analysts at Rabobank suggest that even though the ECB meeting draws the attention away from almost anything else, there is, after a few quiet days, increasing risk that the Catalans seize their moment within the next 36 hours.

Key Quotes

“The parties within the Catalan government have stated that they will declare independence either today or tomorrow to prevent Madrid from taking over control. Well, in that case they’d better do it quickly. Spain’s senate is expected to approve the central government’s intention to suspend the Catalan government tomorrow as well.”

“So far, the regional government has declined to enlighten the rest of the world what this new declaration of independence would imply. It is therefore still possible that it will try to avert complete chaos and/or the possible arrest of the Catalan president Puigdemont by calling snap elections instead and to link these to a mandate for declaring independence. It would then be interesting to see how Madrid would react, as the central parliament is divided on whether suspending authority is the best way forward.”

“A final option for Barcelona is to sit on its hands and wait for Madrid to live up to the invocation of article 155. The Catalan government has already asked supporters to help them preventing Madrid from taking over, possibly by creating a human shield outside of parliament. They might then bet on an aggressive reaction by the Guardia Civil, which would ultimately yield more sympathy for the Catalan case.”

“No matter what, we believe that in the end Catalonia will remain part of Spain, even when it declares independency. A unilaterally declared independent Catalonia would simply not be recognised internationally and Spain will refuse to negotiate. Still, tensions and uncertainty over the region’s future might well rise in the coming days and weeks. The longer it takes, the larger the implications for the Catalan, and hence the Spanish, economy.”