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Catalan Separatists Tap Brakes as Banks Consider Departure

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Posted on : October 6, 2017

Separatist leaders in Catalonia are seeking to avoid an immediate declaration of independence from Spain as officials in Madrid and business leaders in Barcelona ratchet up pressure on the nationalist camp.

With the movement’s leaders divided on the issue, some on the Catalan side want to create more time for a negotiated settlement, said two people familiar with their plans. The leader of the most powerful group among the separatists promised the regional parliament will meet as planned Monday, defying an order by Spain’s highest court, though stopping short of vowing a unilateral declaration.

“There will be some formula for the Catalan Parliament to convene and hold its meeting as planned,” Jordi Sanchez, who heads the group known as the Catalan National Assembly, said in an interview in Barcelona. “There will be a plenary session.”

Regional President Carles Puigdemont’s mainstream separatist group is concerned that a move toward independence would send the economy into a tailspin, the people said.  But following Sunday’s illegal referendum on secession — which the regional government said won the support of 90 percent of 2.3 million voters — hardliners from the anarchist party CUP are demanding a quick break with Spain, according to the people, who asked not to be named because the conversations are private. A spokesman for the Catalan government declined to comment.

Markets Rally

Spanish markets surged after reports of the more conciliatory stance by the separatists. The IBEX 35 stock index jumped 2.5 percent versus a 2.9 percent fall Wednesday. Spanish 10-year bonds rose for the first time this week as the spread over German bunds narrowed by 8 basis points, and the euro edged higher for a third consecutive session.

“Markets were looking for a rational solution, and it now looks like we’ll get one,” said Alberto Espelosin, a fund manager at Abante Asesores Gestion. “It’s good to see both sides willing to have some kind of dialogue.”

The Spanish Constitutional Court, meanwhile, suspended a session of the Catalan Parliament scheduled for Monday, at which Puigdemont had sought to evaluate the result of the independence vote. The injunction came after the court agreed to hear a challenge to the meeting filed by the Catalan Socialist party.

Economy Minister Luis de Guindos slammed the Catalan administration. Highlighting the economic risks of secession, he said Spain has nothing to discuss with the secessionists until they back off threats of declaring independence. 

Catalan banks “have indicated that if this process goes on, they are totally open to relocating their headquarters,” de Guindos told Bloomberg Television. “This is a clear indication of how insane is the regional government of Catalonia.”

The board of Banco Sabadell SA was scheduled to meet at 5 p.m. Thursday to discuss a plan to shift its headquarters to Alicante, further down Spain’s eastern coast. And Barcelona-based CaixaBank SA is considering a temporary move of its legal domicile to the Balearic Islands, according to the daily El Mundo.

Puigdemont on Wednesday night called for outside mediators to help broker a settlement and said the regional government in Barcelona would soon apply the results of Sunday’s makeshift vote. He stopped short of saying how or when he would trigger the process to leave Spain.

Puigdemont is trying to hold together a movement that includes a broad swathe of Catalan society, from the anarchists of the CUP to business leaders like Abertis SA Chairman Salvador Alemany. While Puigdemont heads the regional executive, civic groups like the Catalan National Assembly, or ANC, hold much of the power. It’s the ANC that brought more than a million people onto the streets of Barcelona, and the group took the lead in organizing the vote last Sunday.

“The group within the Catalan government that is calling the shots is the CUP, an extremely radical group with a lot of anarchist links and they are the ones setting the agenda,” de Guindos said. “Everybody has started to realize.”

Puigdemont’s democratic mandate is relatively weak. He was parachuted in to head the regional government as a compromise candidate after regional elections in 2015 left the mainstream separatist alliance, Junts pel Si, unable to form a majority without the anarchists.

The prospect of secession is boosting pressure on Prime Minister Mariano Rajoy and his minority government in Madrid. The premier has been seeking cross-party political support for his hard-line approach after police stormed polling stations and triggered mass demonstrations. The next move could involve suspending the regional government and implementing direct rule from Madrid.

The moderates want to avoid declaring independence without triggering unrest on the streets from supporters who might feel let down. One formula under discussion would involve deferred independence, with Puigdemont announcing a period of weeks before his decree will be implemented in an effort to force the Spanish government to the negotiating table, the people said.

The divide will fuel further uncertainty over the path to independence for Catalonia, which accounts for about 20 percent of Spain’s economic output, raising questions about whether Puigdemont will ultimately back down from his demands. The Spanish government has resolutely opposed any talks while the threat of independence is still on the table.

“This is not a question of arbitration or mediation, it is a question of a government that has to enforce the law,” de Guindos said. “There is nothing to negotiate without the full respect of the rule of law.”

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