Spain to impose direct rule on Catalan region
MADRID — Spain will move forward with the process of suspending the powers of the Catalan government after Regional President Carles Puigdemont refused to drop his claim to independence.
Spanish stocks and bonds dropped as Prime Minister Mariano Rajoy’s government announced its unprecedented decision to directly intervene in Catalonia, a step that will further inflame the conflict over the future of Spain’s biggest regional economy.
“The government will continue with the procedures set out in Article 155 of the Constitution to restore the legality of self-rule in Catalonia,” the government said in a statement on Thursday morning.
Spain deployed the ultimate constitutional weapon after Mr. Puigdemont said the regional parliament may declare independence unless the government in Madrid agrees to talks. Mr. Puigdemont’s response came to an ultimatum from Madrid to renounce his claims to full autonomy by Thursday or face the consequences.
‘BLOCKING DIALOGUE’
“If the central government persists in blocking dialogue and continues its repression, the Catalan Parliament may proceed, if it considers it appropriate, to approve a formal declaration of independence,” Mr. Puigdemont said in a letter to Rajoy.
Mr. Rajoy, who is due to attend a two-day summit of European Union leaders in Brussels from Thursday, convened a special session of his cabinet on Saturday. Mr. Rajoy’s advisers were meeting with the opposition Socialists on Thursday morning to finalize the measures they plan to take.
“It looks like both parties are sticking to the script, which is trying to blame each other for what happens next,” said Antonio Barroso, a political- risk analyst at Teneo Intelligence in London. “The next step is that Rajoy will go the Senate to seek authorization to restore the rule of law in Catalonia.”
The outcome is that “all roads lead to new elections in Catalonia,” Mr. Barroso said. “The question is how we get there. Puigdemont may try to beat Rajoy to it. It’s a way to keep up momentum for the independence movement.”
Spain’s benchmark stock index was down 0.9% as of 10: 42 a.m. in Madrid. Ten-year government bond yields rose three basis points to 1.64%.
In an address to the regional parliament in Barcelona last week, the Catalan president said that an Oct. 1 referendum held in breach of Spanish law gave him the right to declare independence, but that he was suspending the drive for full autonomy in favor of dialogue.
In his letter to Mr. Rajoy, Mr. Puigdemont said that his request for a face- to- face meeting had been ignored, and that Spanish “repression” of Catalonia was being stepped up with the jailing of two separatist activists on Monday.
“My request for the repression to end has not been met either,” Mr. Puigdemont said. “On the contrary, it has increased.” — Bloomberg