Catalonia declaration signed, but suspended
Catalan President Carles Puigdemont and other regional leaders have signed a declaration of independence from Spain, following the disputed referendum.
However, they say the move will not be implemented for several weeks to allow talks with the government in Madrid, the BBC reported. The document calls for Catalonia to be recognised as an “independent and sovereign state”.
The move was immediately dismissed by the Spanish central government in Madrid.
An October 1 referendum in the north-eastern province - which Catalan leaders say resulted in a Yes vote for independence - was declared invalid by Spain’s Constitutional Court.
Earlier on Tuesday, Puigdemont told the Catalan parliament in Barcelona that the region had won the right to be independent as a result of the vote.
The referendum resulted in almost 90% of voters backing independence, Catalan officials said. But anti-independence voters largely boycotted the ballot - which had a reported turnout of 43% - and there were several reports of irregularities.
National police were involved in violent scenes as they manhandled voters while implementing the legal ruling banning the referendum.
Puigdemont told the regional parliament that the “people’s will” was to break away from Madrid, but he also said he wanted to “de-escalate” the tension around the issue.
“We are all part of the same community and we need to go forward together. The only way forward is democracy and peace,” he told deputies.
But he also said Catalonia was being denied the right to self-determination, and paying too much in taxes to the central government in Madrid.
rime Minister Mariano Rajoy has called an extraordinary cabinet meeting for Wednesday morning to address the latest moves in the crisis.
As Catalonia’s leader announced he would declare independence, thousands of his supporters, watching his speech nearby, on a big screen, were euphoric.
But seconds later - when Puigdemont qualified his announcement - and said the declaration would be suspended for several weeks, the disappointment was visible in the crowd.
Catalonia’s centre-right, centre-left coalition government only had a majority of MPs in the regional parliament with the support of another small pro-independence party, on the far left. That party is unhappy that there has been no clear declaration of independence. And so Catalonia’s awkward coalition of pro-independence parties feels more fragile.
Influential figures including Barcelona’s mayor Ada Colau and European Council President Donald Tusk had urged Puigdemont to step back from declaring independence.
Catalonia is is one of Spain’s wealthiest regions, accounting for a quarter of the country’s exports. But a stream of companies have announced plans to move their head offices out of Catalonia in response to the crisis.
The European Union has made clear that should Catalonia split from Spain, the region would cease to be part of the EU.
Meanwhile, Bloomberg reported that when financial markets opened October 2, Spanish equities were down, sovereign yields were up, and the euro weakened significantly against the dollar, as investors worried that the push for secession in Catalonia could lead to a breakup of Spain.
The concern is justified, but the crisis may also overblown and could offer investment opportunities.
Catalonia accounts for about 16% of the country’s population, and more than 20% of GDP. About a quarter of Spanish exports are Catalan products, and about the same proportion of inward foreign investments to Spain is destined to the region. Barcelona, the regional capital, is a major European city and remains an important tourist draw.
A truncated Spain could lower the country’s debt service capacity, causing rating firms to downgrade the obligations, Bloomberg added. Investors, in turn, would have to reevaluate risk-adjusted returns in holding sovereign paper, and reassess the earnings potential of Spanish companies that would have to deal with a smaller domestic market.
What happens in Catalonia doesn’t just stay in Catalonia. If the region successfully gains independence from Spain, that could, for example, encourage Scotland’s efforts to secede from the U.K., and the Flemish separatist movement in Belgium. A European Union that is already struggling to become a unified economic region could, instead, become more splintered, reducing prospects for its economy and markets.