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Catalan independence would have huge repercussions for Spain. But will it actually come about? This story will run, but to start off, here’s a short guide to what’s happening.

Sports fans around the world will be familiar with banners hung from the terraces at Catalan sporting events, declaring that “Catalonia is not Spain”.  The hope for many Catalans is that this wish will soon turn into reality.

On 27th September elections were held in Catalonia to choose the autonomous government – but with a twist.   Dubbing it a ‘plebiscite’, parties supporting the right to self-rule joined together in one electoral list, known as Junts pel si (Together for Yes), and with a simple premise: if they won a majority of seats, they would formally declare the start of a unilateral independence process.

It didn’t work out exactly as they had hoped.   Junts pel si ended up with 62 seats, 6 short of the 68 needed for an overall majority.  But another fierce supporter of independence, the CUP (Popular Unity Candidacy) – a far-left  anti-system and anti-capitalist party which had stayed out of the Junts pel si list, won a further 10 seats.  Count those in, and pro-independence groups have a sufficient majority in parliamentary seats to push ahead with the plan.

Yet a month on from the vote, Catalans are still waiting for a Government to be formed.  The CUP and the former president Artur Mas, head of the centre-right Convergencia party and the promotor of the plebiscite formula, make unnatural bedfellows.   The CUP initially refused to back Mas or anyone from Convergencia as President of the new Government, and publicly at least haven’t shifted from that view.

The original road map announced by Mas envisaged the declaration of the start of the process once a new Government was named.  This was to kick-off an 18 month period in which the republic would continue building the infrastructure of an independent state, culminating in a “proclamation” of full independence in 2017.

Standing in the way is the law, in the shape of the Spanish Constitution, which states unequivocally that Spain is indivisible.   Whereas in the UK an act of parliament was enough to permit the Scottish referendum, Spain would first need to vote to change the constitution, with the backing of a two thirds majority in parliament.  Up to now no Spanish Government has shown interest in pushing a reform that would allow the Catalans or Basques to break away.

This may well change – Spanish General Elections have been called for 20th December.  The current Prime Minister, Mariano Rajoy, and his centre-right People’s Party will almost certainly not win a workable majority.   With the strong emergence nationally of the Ciudadanos (Citizens) party, which originated in Catalonia to oppose secession, and the left-wing populists of Podemos, born out of the indignados street movements, it’s a safe bet that a different Government will emerge, with no party being able to govern alone.   Podemos declares itself pro-union but also in favour of permitting a referendum; should it form any part of the next government, a vote could be on the cards.

Might Mas be tempted to hold fire until the Spanish elections are over?  While it can’t be ruled out, he won’t want to be accused of back-tracking.   If at all possible, he will reach agreement with the CUP and push ahead with his plan.  The alternative would be new elections, with no guarantee of a similar result.  The smell of corruption also hangs in the air, with Mas’s predecessor, Jordi Pujol, being investigated for tax fraud and money laundering stretching back 34 years, together with most of the Pujol family and a number of Convergencia senior figures.  Support for Mas could fall away if the scandal grows.  Enthusiasm for independence may even dwindle.

Which could be why Junts pel si and the CUP are in no mood to ease off.  This week they presented a draft resolution of the promised declaration to constitute the new state.   The text incites the new government to disobey Spanish law and in particular any sentence from the Constitutional Court in Madrid.

So a clash looks unavoidable. The supporters of independence are sure their moment has come. But they may have underestimated the power of the state to block what is in effect a coup d´état.   And critically, although Junts pel si and the CUP together will have a majority of seats in the new parliament net, their share of the popular vote was under 48%.  That is a defeat under any definition of a plebiscite, and hardly a ringing mandate for such a momentous break with the past.

Whatever happens over the next few weeks, those who follow events in Spain are going to be entertained.    With more questions than answers, investors and international companies looking for a swift outcome shouldn`t hold their breath.    Will Mas and the CUP reach agreement or will they have to call further elections?  How will the Spanish Government react to a unilateral declaration?  What will be the response from Catalonia to any measures from Madrid?  And who will be in power in Madrid after 20th December?

And while it plays out, for the Spanish economy it is an unwelcome distraction.  The country is pulling out of a long and deep recession.  Current growth of over 3% is encouraging and is beginning to chip away at the huge numbers out of work, but with unemployment at 22.2%, nobody should celebrate seeing the recovery derailed.  The worry is that the Catalan question may do just that.


 In the next post, we’ll bite the bullet and head into more controversial ground as we look at the possible economic repercussions for Catalonia and Spain as a whole.  Would an independent Catalonia remain in the EU?  How would the Catalan and Spanish economies be affected?  And how long would Lionel Messi last in el Barça, away from the bright lights of La Liga?