Tag Archives: Catalonia

Spain to sack Catalan government in bid to end secessionist crisis

Spain to sack Catalan government in bid to end secessionist crisis

By Isla Binnie and Julien Toyer

MADRID (Reuters) – The Spanish government will sack Catalonia’s secessionist leadership and force the region into a new election, it decided on Saturday, unprecedented steps it said were needed to prevent the region breaking away.

The plan, which requires parliamentary approval, is Madrid’s bid to resolve the country’s worst political crisis in four decades, but it risks an angry reaction from independence supporters, who planned street protests later in the day.

Outlining the cabinet’s decision, Prime Minister Mariano Rajoy said Catalonia, which accounts for a fifth of Spain’s economy, was already in worrying economic shape as a result of the regional government’s push for independence.

“We will ask the Senate, with the aim of protecting the general interest of the nation, to authorize the government … to sack the Catalan president and his government,” Rajoy told a news conference.

Spain’s upper house of parliament is scheduled to vote on the plan next Friday.

It is the first time since Spain’s return to democracy in the late 1970s that the central government has invoked the constitutional right to take control of a region.

Direct rule will give Madrid full control of the region’s finances, police and public media and curb the powers of the regional parliament after it allowed an independence referendum that Madrid declared illegal.

Rajoy said he did not intend to use the special powers for more than six months and he would call a regional election as soon as the situation was back to normal.

“Our objective is to restore the law and a normal cohabitation among citizens, which has deteriorated a lot, continue with the economic recovery, which is under threat today in Catalonia, and celebrate elections in a situation of normality,” Rajoy said.

Catalan President Carles Puigdemont, was due to deliver an address at 9 p.m. (1900 GMT) after meeting with his government, his office said. He was also due to join the protests in Barcelona.

Puigdemont made a symbolic declaration of independence on Oct. 10, and on Thursday he threatened to press ahead with a more formal one unless the government agreed to a dialogue.

The Catalan parliament is expected to decide on Monday whether to hold a plenary session to formally proclaim the republic of Catalonia.

Catalan media have said Puigdemont could decide to dissolve the regional parliament himself immediately after independence is proclaimed and call elections before the Spanish senate makes direct rule effective.

Under Catalan law, those elections would take place within two months.

UNSUSTAINABLE

Pro-independence parties said the move from the center-right government of the People’s Party (PP) showed the Spanish state was no longer democratic.

“The Spanish government has carried out a coup against a democratic and legal majority,” Marta Rovira, a lawmaker from Catalan government party Esquerra Republica de Catalunya, tweeted.

Anti-capitalist party CUP, which backs the pro-independence minority government in the regional assembly said: “Taken over but never defeated. Popular unity for the Republic now. Not a single step back.”

Catalan authorities said about 90 percent of those who voted in the referendum on Oct. 1 opted for independence. But only 43 percent of the electorate participated, with opponents of secession mostly staying at home.

The main opposition in Madrid, the Socialists, said they fully backed the special measures and had agreed on holding regional elections in January.

“Differences with the PP on our territorial unity? None!” said socialist leader Pedro Sanchez.

Rajoy also received the backing of King Felipe, who said at a public ceremony on Friday that “Catalonia is and will remain an essential part” of Spain.

The independence push has brought on Spain’s worst political crisis since a failed military coup in 1981 several years after the end of the Franco dictatorship. It has met with strong opposition across the rest of Spain, divided Catalonia itself, and raised the prospect of prolonged street protests

It has also led Madrid to cut growth forecasts for the euro zone’s fourth-largest economy and prompted hundreds of firms to move their headquarters from Catalonia. Rajoy on Saturday urged firms to stay in the region.

Madrid has insisted that Puigdemont has broken the law several times in pushing for independence.

“The rulers of Catalonia have respected neither the law on which our democracy is based nor the general interest,” the government said in a memorandum to the Senate. “This situation is unsustainable.”

Pro-independence groups have mustered more than 1 million people onto the streets in protest at Madrid’s refusal to negotiate a solution.

Heavy-handed police tactics to shut down the independence referendum were condemned by human rights groups, and secessionists accused Madrid of taking “political prisoners” after two senior independence campaigners were jailed on charges of sedition.

Hacking group Anonymous on Saturday joined a campaign called “Free Catalonia” and took down the website of Spain’s constitutional court.

Spain’s national security department had said on Friday it was expecting such an attack to take place, though nobody was available on Saturday to confirm it.

(Editing by Angus MacSwan and Robin Pomeroy)

Spain plans new elections in Catalonia to end independence bid: opposition

Spain plans new elections in Catalonia to end independence bid: opposition

By Sonya Dowsett and Inmaculada Sanz

MADRID (Reuters) – The Spanish government has secured opposition support for dissolving Catalonia’s parliament and holding new elections there in January in its bid to defuse the regional government’s push for independence.

The Socialists, the main opposition, said on Friday they would back special measures to impose central rule on the region to thwart the secessionist-minded Catalan government and end a crisis that has unsettled the euro and hurt confidence in the euro zone’s fourth-largest economy.

Prime Minister Mariano Rajoy, who wants opposition support to be able to present a united front in the crisis, has called an emergency cabinet meeting on Saturday to pave the way for Madrid establishing central control in the region.

The government on Friday would not confirm whether January elections formed a part of the package, with Rajoy saying only that the measures would be announced on Saturday.

However a government spokesman saw regional elections as likely. “The logical end to this process would be new elections established within the law,” said government spokesman Inigo Mendez de Vigo at a weekly government press conference.

It will be the first time in Spain’s four decades of democracy that Madrid has invoked the constitution to effectively sack a regional government and call new elections.

Rajoy wants as broad a consensus as possible before taking the step, which has raised the prospect of more large-scale protests in Catalonia, where pro-independence groups have been able to bring more than one million people out onto the streets.

Catalan leader Carles Puigdemont, a former journalist who is spearheading the secession campaign, has refused to renounce independence, citing an overwhelming vote in favor of secession at a referendum on Oct.1.

Catalan authorities said around 90 percent voted for independence though only 43 percent of voters participated. Opponents of secession mostly stayed home.

ECONOMIC CONFIDENCE HURT

Spanish courts have ruled the referendum unconstitutional, but Puigdemont says the result is binding and must be obeyed.

The prolonged standoff has caused hundreds of companies to move their headquarters outside Catalonia and prompted the Spanish government to cut its economic growth forecast. The region accounts for a fifth of Spain’s economy.

Later on Friday, Moody’s was scheduled to review Spain’s sovereign rating, days after warning that political tensions between Madrid and the rebel leadership in Catalonia were credit-negative for the sovereign.

In a test of investor appetite for Spanish stocks, housebuilder Aedas <AEDAS.MC> dropped over 6 percent in its debut on the Madrid stock exchange on Friday, although it later regained losses to trade close to its listing price.

The uncertainty surrounding the future of the region has rattled the euro. On Thursday, European Union leaders including Germany’s Angela Merkel and France’s Emmanuel Macron offered their support for Rajoy at an EU leaders summit in Brussels.

The EU says it will not act as a mediator and the crisis is for Madrid and Barcelona to resolve.

After Rajoy announces the direct control measures on Saturday, Spain’s upper house will have to approve them in a session which could take place on Oct. 27, a Senate spokeswoman said on Friday.

Actions could range from dismissing the Catalan parliament and government, to a softer approach of removing specific heads of department. Direct rule from Madrid would be temporary while regional elections are held to form a new government.

Madrid on Friday stressed the move was not about taking autonomy away from Catalonia but temporarily imposing direct rule until a government was elected that would act within the law.

Socialist politician Carmen Calvo, a member of cross-party talks to establish what measures the government should take to impose direct rule on Catalonia, told TVE state television that January regional elections would form part of the package.

She gave no further details apart from saying the Socialists wanted a light-touch intervention.

(Additional reporting by Raquel Castillo and Isla Binnie; Writing By Sonya Dowsett; Editing by Richard Balmforth)

Spain to take control of Catalonia if gets ambiguous reply on independence

People walk with a huge Catalan flag during Spain's National Day in Barcelona.

MADRID (Reuters) – The Spanish government will take control of Catalonia if regional leader Carles Puigdemont replies ambiguously to Madrid’s question about whether he has declared independence from Spain, the interior minister said on Saturday.

Puigdemont made a symbolic declaration of independence on Tuesday night, only to suspend it seconds later and call for negotiations with Madrid on the region’s future.

Spain’s Prime Minister Mariano Rajoy has given him until Monday to clarify his position – and then until Thursday to change his mind if he insists on a split – threatening to suspend Catalonia’s autonomy if he chooses independence.

“The answer must be without any ambiguity. He must say ‘yes’ or ‘no’,” Spanish Interior Minister Juan Ignacio Zoido told Cope radio.

“If he answers ambiguously, it means he doesn’t want dialogue and thus the Spanish government will have to take action,” he also said.

Puigdemont, who is holding consultations with local parties to prepare his answer, faces a tough dilemma.

If he says he did proclaim independence, the central government will step in. If he says he did not declare it, then the far-left Catalan party CUP would probably withdraw its support for his minority government.

CUP on Friday called on Puigdemont to make an unequivocal declaration of independence in defiance of the Madrid government’s deadlines.

Such a hardline position has also been backed by influential pro-independence civic group Asamblea Nacional Catalana (Catalan National Assembly).

They were joined on Saturday by another key member of Puigdemont’s coalition, Esquerra Republicana de Catalunya, whose leader Oriol Junqueras said they should press ahead with splitting from Spain following an independence vote.

The Catalan government said 90 percent of Catalans had voted for a breakaway in an Oct. 1 referendum that central authorities in Madrid had declared illegal and most opponents of independence boycotted, reducing turnout to around 43 percent.

“We have an unequivocal and absolute commitment to fulfill the democratic mandate from Oct. 1,” Junqueras said.

Under Article 155 of the Spanish constitution, the central government in Madrid can suspend the political autonomy of a region if it breaks the law.

This article, which enables Rajoy to sack the Catalan government and call a regional election, has never been activated since the constitution was adopted in 1978 after the death of dictator Francisco Franco.

(Reporting by Rodrigo de Miguel and Julien Toyer; Editing by Adrian Croft)

Allies press Catalan leader to declare full independence, ignore Madrid deadlines

People walk under a huge Catalan flag during Spain's National Day in Barcelona. REUTERS/Gonzalo Fuentes

By Isla Binnie and Paul Day

MADRID (Reuters) – Catalan leader Carles Puigdemont came under pressure from one of his key allies on Friday to declare full independence and ignore a threat of direct rule from the Spanish government.

Puigdemont made a symbolic declaration of independence on Tuesday night, only to suspend it seconds later and call for negotiations with Madrid. [nL8N1ML2NZ]

Spain’s Prime Minister Mariano Rajoy has given him until Monday to clarify his position – and then until Thursday to change his mind if he insists on a split – threatening to suspend Catalonia’s autonomy if he chooses independence.

But far-left Catalan political group CUP called on Puigdemont to make an unequivocal declaration of independence in defiance of the deadlines.

“If (the central Madrid government) wants to continue to threaten and gag us, they should do it to the Republic that has already been claimed,” the party said.

The CUP only holds 10 seats in the 135-seat Catalan parliament. But Puigdemont’s minority government relies on its support to push through legislation and cannot win a majority vote in the regional parliament without its backing.

The wealthy region’s intention to break away after a referendum has plunged Spain into its worst political crisis since an attempted military coup in 1981.

Sources close to the Catalan government said Puigdemont and his team were working on an answer to Rajoy though they declined to say what line he might take.

The CUP statement echoes the position expressed late on Thursday by influential pro-independence civic group Asamblea Nacional Catalana which said: “Given the negative position of Spain toward dialogue, we ask the regional parliament to raise the suspension (on the declaration of independence).”

But the leader of Puigdemont’s party, Artur Mas, who served as the region’s president until 2016 and is still believed to influence key decisions, said on Friday declaring independence was not the only way forward.

“If a state proclaims itself independent and cannot act as such, it’s an independence that is merely aesthetic,” he told Catalan television TV3.

“The external factor must be taken into account in the decisions that will be made from now on,” he said.

The European Union, the United States and most other world powers have made it clear they wanted Catalonia to remain within Spain.

“If we allow Catalonia – and it is none of our business – to separate, others will do the same. I do not want that,” Jean Claude Juncker said in a speech at Luxembourg University.

(This refiled version of the story adds dropped word in paragraph six).

(Writing by Julien Toyer; Editing by Andrew Heavens)

Spain takes step toward direct rule over Catalonia’s independence move

Spain´s Prime Minister Mariano Rajoy attends a cabinet meeting at the Moncloa Palace in Madrid, October 11, 2017. Moncloa handout via REUTERS

By Blanca Rodríguez and Sonya Dowsett

MADRID/BARCELONA (Reuters) – Spanish Prime Minister Mariano Rajoy took the first step on Wednesday toward suspending Catalonia’s political autonomy and ruling the region directly to thwart a push for independence.

He demanded that the regional government clarify whether it now considered itself independent following a speech by Catalan president Carles Puigdemont on Tuesday night.

This requirement is a necessary step before triggering Article 155 of the constitution, which would allow Madrid to suspend the region’s political autonomy.

Rajoy’s move could deepen the confrontation between Madrid and Catalonia but it also signals a way out of Spain’s biggest political crisis since a failed military coup in 1981.

The prime minister would be likely to call a snap regional election after activating the constitutional mechanism allowing him to do so.

Puigdemont made a symbolic declaration of independence from Spain on Tuesday night but then immediately suspended it and called for talks with the Madrid government.

“The cabinet has agreed this morning to formally request the Catalan government to confirm whether it has declared the independence of Catalonia, regardless of the deliberate confusion created over its implementation,” Rajoy said in a televised address after a cabinet meeting to consider the government’s response.

Without giving a specific deadline for the Catalan government to reply, Rajoy said: “The answer from the Catalan president will determine future events, in the next few days.”

It is not yet clear if and when the Catalan government would answer the requirement but it now faces a conundrum, political analysts say.

If Puigdemont says he did declare independence, the government would likely trigger Article 155. If he says he did not declare it, then far-left party CUP would likely withdraw its support to his minority government.

“Rajoy has two objectives: if Puigdemont remains ambiguous, the pro-independence movement will get more fragmented; if Puigdemont insists on defending independence then Rajoy will be able to apply Article 155,” said Antonio Barroso, deputy director of London-based research firm Teneo Intelligence.

“Either way Rajoy’s aim would be to first restore the rule of law in Catalonia and this could at some point lead to early elections in the region”.

DIALOGUE CALL DISMISSED

Puigdemont had been widely expected to unilaterally declare Catalonia’s independence on Tuesday after the Catalan government said 90 percent of Catalans had voted for a breakaway in an Oct. 1 referendum that Spain had declared illegal and which most opponents of independence boycotted.

Madrid responded angrily to Puigdemont’s speech, saying the Catalan government could not act on the results of the referendum.

“Neither Mr. Puigdemont nor anyone else can claim, without returning to legality and democracy, to impose mediation… Dialogue between democrats takes place within the law,” Deputy Prime Minister Soraya Saenz de Santamaria said.

Invoking Article 155 to ease Spain’s worst political crisis in four decades would make prospects of a negotiated solution to the Catalonia crisis even more remote.

A spokesman for the Catalan government said earlier on Wednesday that if Madrid went down this road, it would press ahead with independence.

“We have given up absolutely nothing…We have taken a time out…which doesn’t mean a step backwards, or a renunciation or anything like that,” Catalan government spokesman Jordi Turull told Catalunya Radio.

Socialist opposition leader Pedro Sanchez said he would back Rajoy if he had to activate Article 155 and said he had agreed with the prime minister to open a constitutional reform within six months to discuss how Catalonia could fit better in Spain.

It was not clear how the Catalan government would respond to the offer.

MARKET RELIEF

Puigdemont’s speech also disappointed supporters of independence, thousands of whom watched proceedings on giant screens outside parliament before sadly leaving for home.

Financial markets, however, were encouraged that an immediate declaration of independence had been avoided.

Following Puigdemont’s speech, Spain’s benchmark IBEX share index rose as much as 1.6 percent, outperforming the pan-European STOXX 600 index. The rally pushed the main world stocks index, the MSCI’s 47-country ‘All-World’ index, to a record high.

Spain’s 10-year government bond yield — which moves inversely to the price — dropped 5 basis points to 1.65 percent in early trade, according to Tradeweb data.

In Brussels, there was relief that the euro zone’s fourth-largest economy now had at least bought some time to deal with a crisis that was still far from over.

One EU official said Puigdemont “seems to have listened to advice not to do something irreversible”.

The Catalan crisis has deeply divided the northeastern region itself as well as the Spanish nation. Opinion polls conducted before the vote suggested a minority of about 40 percent of residents in Catalonia backed independence.

The stakes are high — losing Catalonia, which has its own language and culture, would deprive Spain of a fifth of its economic output and more than a quarter of exports.

Some of Catalonia’s largest companies have moved their head offices out of the region and others were set to follow if he had declared independence.

(Additional reporting by Julien Toyer, Paul Day, Jesus Aguado; Writing by Adrian Croft; Editing by Julien Toyer and Angus MacSwan)

Catalonia nears possible independence proclamation despite Madrid warnings

Catalonia nears possible independence proclamation despite Madrid warnings

By Angus Berwick

BARCELONA (Reuters) – Catalan police tightened their guard on the region’s parliament on Tuesday where secessionists have threatened to adopt a unilateral declaration of independence from Spain despite warnings from Madrid of swift counter-measures.

Regional leader Carles Puigdemont held a meeting of his cabinet to decide how to press an independence drive that has stirred powerful emotions across Spain and raised concern in European Union partner states.

Catalan police armed with automatic rifles stood guard at Barcelona’s Parc de la Ciutadella which houses the elegant 18th century building. Spanish national police, decried by separatists over their use of force to hinder an Oct. 1 referendum, were not to be seen.

A declaration of independence would deepen Spain’s biggest political crisis since an attempted military coup in 1981 and would almost certainly draw tough counter-measures from Madrid, possibly including suspension of the regional government.

The parliament and other buildings, such as the regional high court building, could become a focus of contention between Spanish and Catalan authorities.

Thousands of national police reinforcements sent by Madrid for the referendum remain in the area, many of them in two cruise ships docked in Barcelona harbor.

Pro-independence demonstrators were due to gather before the parliament building under the slogan “Hello Republic” to mark Puigdemont’s speech at 6 p.m. (1600 GMT).

Hundreds of thousands of people demonstrated in Barcelona against independence at the weekend, waving red-yellow Spanish flags through the city center. That rally fell a week after some 900 people were injured when police fired rubber bullets and stormed crowds with truncheons to disrupt a referendum ruled illegal in Madrid.

Puigdemont has said he is determined to apply a law passed by the Catalan assembly which called for a declaration of independence within days if Catalans voted ‘yes’ in the Oct. 1 referendum.

The government of Spain’s wealthiest region says 90 percent of those who voted backed independence, but turnout was only 43 percent as many opponents of independence stayed at home.

The Madrid government has said it will respond immediately to any unilateral declaration.

Puigdemont could ask the parliament to vote on a motion of independence, which lawmakers say would start a period of up to six months during which Catalonia would write a new constitution and negotiate a divorce with Spain; or he could make a statement of intent on a future independence declaration.

Catalan government spokesman Jordi Turull refused to disclose what Puigdemont would say but told a news conference after the cabinet meeting he would be “clear and explicit” and Tuesday would be an historic day.

Ruling party lawmakers say Prime Minister Mariano Rajoy is considering taking the unprecedented step of dissolving the Catalan parliament and triggering new regional elections, the so-called nuclear option.

The European Commission repeated its call for dialogue in Spain to end the crisis in Catalonia. Puigdemont has also called for talks and international mediation, but Rajoy has said he will not negotiate with the Catalan leaders unless they abandon plans to declare independence.

BUSINESS CLIMATE

Markets have been rattled by the Catalan crisis, raising Spain’s borrowing costs and pushing down shares.

Spain’s benchmark 10-year bond yields were a touch lower on Tuesday, but above lows hit the previous session as investors awaited Puigdemont’s speech. Spain’s benchmark Ibex share index was down nearly one percent.

The tension is taking its toll on the business climate. On Monday, three more Catalonia-based companies joined a business drift from the region that has gathered steam since the Oct. 1 referendum.

Property group Inmobiliaria Colonial and infrastructure firm Abertis both decided to relocate their head offices to Madrid and telecoms firm Cellnex said it would do the same for as long as political uncertainty in Catalonia continued.

Publishing house Grupo Planeta said it would move its registered office from Barcelona to Madrid if the Catalan parliament unilaterally declared independence.

Spain’s finance minister said it was the Catalan government’s fault the companies were leaving.

The issue has deeply divided the northeastern region as well as the Spanish nation. Opinion polls conducted before the vote suggested a minority of around 40 percent of residents in Catalonia backed independence.

Losing Catalonia, which has its own language and culture, would deprive Spain of a fifth of its economic output and more than a quarter of exports.

The crisis has reopened old divisions in a nation where the right-wing dictatorship of General Francisco Franco, who died in 1975, is a living memory easily revived by strong displays of nationalism.

(Additional reporting by Rodrigo de Miguel, Paul Day, Blanca Rodriguez, Emma Pinedo, Jesus Aguado, Carlos Ruano and Alba Asenjo; Writing by Adrian Croft; editing by Ralph Boulton)

Spaniards take to streets as Catalonia independence tensions rise

People take part in a pro-union demonstration in Madrid, Spain, October 7, 2017. REUTERS/Sergio Perez

By Raquel Castillo and Sam Edwards

MADRID/BARCELONA (Reuters) – Tens of thousands of people gathered in Madrid and Barcelona on Saturday as Catalonia prepared to declare independence, many dressed in white and calling for talks to defuse Spain’s worst political crisis for decades.

The wealthy northeastern region of Catalonia, with its own language and culture, has long claimed to be distinct from the rest of the country and on Sunday held a referendum on leaving Spain, a vote the constitutional court had banned.

The Catalan authorities say that a majority of those who voted supported a split from Spain, something Madrid says is illegal under the country’s 1978 constitution.

The political stand-off has divided the country, pushed banks and companies to move their headquarters outside Catalonia and shaken market confidence in the Spanish economy, prompting calls from the European Commission for Catalan and Spanish leaders to find a political solution.

In protests called across 50 Spanish cities, thousands gathered dressed in white and carrying banners calling for peace and dialogue between leaders.

Meanwhile in Barcelona, protesters chanted “let’s talk” in Catalan, while many carried signs criticizing political leaders for not finding a diplomatic solution to the impasse.

“This is producing a social rupture in Catalonia and this has to be resolved through dialogue, never via unilateralism,” Jose Manuel Garcia, 61, an economist who attended the protest dressed in white said.

“I’m very worried. This will end badly and everyone will lose (without dialogue).”

While Catalan leader Carles Puigdemont has said he is open to mediation, Prime Minister Mariano Rajoy insists he gives up the independence campaign, which grew in strength during a near-six year economic crisis, before he will discuss the matter.

Meanwhile, in Madrid, parallel to the “Let’s talk” march, thousands gathered beneath the enormous Spanish flag in Colon Plaza waving their own flags, singing and chanting “Viva España” and “Viva Cataonia”.

“I’ve come because I feel very Spanish and makes me very sad what’s happened,” Rosa Borras, 47, an unemployed secretary who had joined a noisy gathering in central Madrid, said.

Borras, wearing a “Catalonia, we love you” sticker and surrounded by thousands waving Spanish flags, added: “I wanted to be here for unity, because I also feel very Catalan. My family lives in Catalonia.”

EU CONCERN

Rajoy’s government mobilized thousands of national police to stop Sunday’s vote, leading to clashes with would-be voters as they tried to close polling stations in schools and remove ballot boxes.

The police violence drew widespread condemnation and forced the government to issue an apology on Friday, although tensions continued to rise after reports that plans for a unilateral declaration of independence will be handed to the Catalan parliament on Tuesday.

The crisis has also caused disquiet among Spain’s European Union partners and German Chancellor Angela Merkel has discussed it with European Commission President Jean-Claude Juncker, an EU official told Reuters. [L8N1MI08F]

Concern is growing in EU capitals about the impact of the crisis on the Spanish economy, the fourth largest in the euro zone, and on possible spillovers to other economies.

European finance ministers, gathering in Brussels on Monday and Tuesday for a regular meeting, could discuss the issue, although it is not formally on the agenda, EU officials said.

The support given in public statements by EU leaders to Rajoy is combined with concern expressed in private about how the Spanish government’s use of police to prevent Catalans from voting last week in an independence referendum could backfire.

Some EU states are worried that talk of Catalan independence could fuel secessionist feelings in other parts of Europe.

(Reporting by Raquel Castillo; Writing by Paul Day; Editing by Alexander Smith)

Spain apologizes, tone softens in Catalonia independence crisis

Tiles with the Estelada (Catalan separatist flag) are displayed on a table covered with a Catalan flag at an arts and craft market four days after the banned independence referendum, in Barcelona, Spain October 5, 2017. REUTERS/Susana Vera

By Sam Edwards and Raquel Castillo

BARCELONA/MADRID (Reuters) – Spain apologized on Friday for a violent police crackdown on Catalonia’s independence referendum, in a conciliatory gesture as both sides looked for a way out of the nation’s worst political crisis since it became a democracy four decades ago.

Spain’s representative in northeast Catalonia, which accounts for a fifth of the national economy, made the apology just as Catalonia’s secessionist leader appeared to inch away from a plan to declare independence as early as Monday.

“When I see these images, and more so when I know people have been hit, pushed and even one person who was hospitalized, I can’t help but regret it and apologize on behalf of the officers that intervened,” Enric Millo said in a television interview.

Spanish police used batons and rubber bullets to stop people voting in Sunday’s referendum, which Madrid had banned as unconstitutional. The scenes brought worldwide condemnation and fanned separatist feeling but failed to prevent what the Catalan government described as an overwhelming yes vote.

Moments earlier, a Catalan parliament spokeswoman said the regional government’s leader, Carles Puigdemont, had asked to address lawmakers on Tuesday, in timing that appeared at odds with earlier plans to move an independence motion on Monday.

Puigdemont wanted to speak on the “political situation”.

The softer tone contrasted with remarks earlier on Friday from Catalonia’s head of foreign affairs who told BBC radio it would go ahead with an independence debate in the regional parliament.

Spanish Prime Minister Mariano Rajoy has offered all-party political talks to find a solution, opening the door to a deal giving Catalonia more autonomy. But he has ruled out independence and rejected a Catalan proposal for international mediation.

The stakes are high for the euro zone’s fourth-largest economy. Catalonia is the source of a huge chunk of its tax revenue and hosts multinationals from carmaker Volkswagen to drugs firm AstraZeneca <AZN.L>.

Secession could also fuel separatist-nationalist divisions across the rest of Spain, which only this year saw ETA guerrillas in the northern Basque region lay down their arms after a campaign lasting almost half a century.

Spanish ruling-party lawmakers say Rajoy is considering invoking the constitution to dissolve the regional parliament and force fresh Catalan elections if the region’s government goes ahead with an independence declaration.

The spokeswoman for Catalan parliament said Puigdemont would speak in the assembly next Tuesday, with parliamentary leaders to meet on Friday at 1330 GMT to decide on the exact timing.

STOCKS, BONDS SINK

The Catalan government’s head of foreign affairs, Raul Romeva, told the BBC that the crisis could only be resolved with politics, not via judicial means.

“Every threat, every menace, using the police, using … the Constitutional Court has been useless in trying to (get) people from step back away from their legitimate rights,” he said.

His remarks hit Spanish stocks and bonds, including shares in the region’s two largest banks, Caixabank <CABK.MC> and Sabadell <SABE.MC>. Sabadell decided on Thursday to move its legal base to Alicante. Caixabank <CABK.MC>, Spain’s third-largest lender, will consider on Friday whether to also transfer its legal base away from Catalonia, a source said.

The court’s suspension order further aggravated one of the biggest crises to hit Spain since the establishment of democracy on the 1975 death of General Francisco Franco.

Secessionist Catalan politicians have pledged to unilaterally declare independence at Monday’s session after staging an independence referendum last Sunday. Madrid had banned the vote and sought to thwart it by sending in riot police.

In a separate development that could raise tensions, Catalan police chief Josep Lluis Trapero appeared in Spain’s High Court on Friday to answer accusations he committed sedition by failing to enforce a court ban on holding the referendum.

Unlike national police, Catalonia’s force, the Mossos d’Esquadra, did not use force to prevent people voting. Trapero has emerged as a hero for the pro-independence movement.

Spanish Economy Minister Luis de Guindos told Reuters in an interview on Thursday the turmoil was damaging Catalonia, an industrial and tourism powerhouse which accounts for a fifth of the national economy.

In addition, the central government on Friday passed a law to make it easier for companies to move their operations around the country just as some businesses consider leaving Catalonia, potentially dealing a blow to the region’s finances.

Opinion polls conducted before the vote suggest a minority of around 40 percent of residents in Catalonia back independence. But a majority wanted a referendum to be held, and the violent police crackdown angered Catalans across the divide.

Catalan officials released preliminary referendum results showing 90 percent support in favor of breaking away.

But turnout was only about 43 percent as Catalans who favor remaining part of Spain mainly boycotted the ballot.

(Reporting by Elisabeth O’Leary, Paul Day, Andres Gonzalez and Rodrigo de Miguel; Editing by Mark Bendeich and Hugh Lawson)

Catalonia to move to declare independence from Spain on Monday

People stand during a demonstration two days after the banned independence referendum in Barcelona, Spain, October 3, 2017. REUTERS/Susana Vera

By Sonya Dowsett

MADRID/BARCELONA (Reuters) – Catalonia will move on Monday to declare independence from Spain, a regional government source said, as the European Union nation nears a rupture that threatens the foundations of its young democracy and has unnerved financial markets.

Pro-independence parties which control the regional parliament have asked for a debate and vote on Monday on declaring independence, the source said. A declaration should follow this vote, although it is unclear when.

Catalan President Carles Puigdemont earlier told the BBC that his government would ask the region’s parliament to declare independence after tallying votes from last weekend’s referendum, which Madrid says was illegal.

“This will probably finish once we get all the votes in from abroad at the end of the week and therefore we shall probably act over the weekend or early next week,” he said in remarks published on Wednesday.

The constitutional crisis in Spain, the euro zone’s fourth-biggest economy, has shaken the common currency and hit Spanish stocks and bonds, sharply raising Madrid’s borrowing costs.

On Wednesday, the Ibex stock index <.IBEX>, fell below 10,000 points for the first time since March 2015 as bank stocks tumbled. In a sign of the nervous public mood, Catalonia’s biggest bank, Caixabank <CABK.MC>, and Spain’s economy minister had earlier sought to assure bank customers that their deposits were safe.

EVENING STATEMENT

Puigdemont’s comments appeared after Spain’s King Felipe VI accused secessionist leaders on Tuesday of shattering democratic principles and dividing Catalan society, as tens of thousands protested against a violent police crackdown on Sunday’s vote.

The Catalan leader is due to make a statement at 9 p.m. (1900 GMT) on Wednesday, after an all-party committee of the region’s parliament meets to agree a date — likely to be Monday — for a plenary session on independence.

Spain has been rocked by the Catalan vote and the Spanish police response to it, which saw batons and rubber bullets used to prevent people voting. Hundreds were injured, in scenes that brought international condemnation.

Catalans came out onto the streets on Tuesday to condemn the police action, shutting down road traffic, public transport and businesses, and ratcheting up fears of intensifying unrest in a region that makes up one-fifth of the Spanish economy.

Road closures related to the protests briefly halted production at Volkswagen’s <VOWG_p.DE> Catalonia plant.

As shares in Spain’s big lenders fell on Wednesday, Economy Minister Luis de Guindos tried to reassure investors and customers. “Catalan banks are Spanish banks and European banks are solid and their clients have nothing to fear,” he said on the sidelines of a conference in Madrid.

Caixabank <CABK.MC>, Catalonia’s largest lender, said in a memo to employees late on Tuesday that its only objective was to “protect clients’, shareholders’ and employees’ interests”.

“IRRESPONSIBLE BEHAVIOR”

Spanish Prime Minister Mariano Rajoy, a conservative who has taken a hard line on the issue, faces a huge challenge to see off Catalan independence without further unrest.

European Council President Donald Tusk has backed his constitutional argument but some fellow members of the bloc have criticized his tactics. Tusk has appealed to Rajoy to seek ways to avoid escalation in Catalonia and the use of force.

Brussels has in the past given little or no encouragement to separatist movements inside the European Union, whether those of the Catalans, Scots, Flemings or others.

Pro-independence parties who control the regional government staged the referendum in defiance of a Constitutional Court ruling that the vote violated Spain’s 1978 constitution, which states the country is indivisible.

Catalonia has its own language and culture and a political movement for secession that has strengthened in recent years.

Participants in Sunday’s ballot — only about 43 percent of eligible voters — opted overwhelmingly for independence, a result that was expected since residents who favor remaining part of Spain mainly boycotted the referendum.

Outside Catalonia, Spaniards mostly hold strong views against its independence drive. In his televised address, the king said the “irresponsible behavior” of the Catalan leaders had undermined social harmony in the region.

“Today Catalan society is fractured and in conflict,” he said. “They (the Catalan leaders) have infringed the system of legally approved rules with their decisions, showing an unacceptable disloyalty toward the powers of the state.”

The king said the crown was strongly committed to the Spanish constitution and to democracy, and underlined his commitment to the unity and permanence of Spain. He had earlier met Rajoy to discuss the situation in Catalonia.

Opinion polls conducted before the vote suggested a minority of around 40 percent of residents in the region backed independence. But a majority wanted a referendum to be held, and the violent police crackdown angered Catalans across the divide.

(Additional reporting by Adrian Croft and Julien Toyer in Madrid; Writing by Mark Bendeich and Sonya Dowsett; Editing by Catherine Evans)

Catalonia Asks Spanish Government For $9 Billion Bailout

Catalonia, a region of Spain that has expressed a desire to become an independent country, has asked the Spanish government for a $9 billion euro bailout. The Catalonian regional government said the funds would pay down debt and meet targets for deficit reduction.

The region initially requested a $5 billion bailout in August, 2012.

The bailout request comes as the newly elected Catalonian leaders pledged a referendum on the region’s independence. Continue reading →