Blogs and advice from Industry leading Specialists
Valuable Opinions, Comments & Gossip
Financial related News & Articles relating to Spain
Latest News, Stories
& Hot Topics
Various Tools & Widgets to help with your financial needs
Tools & Widgets to
help with finances
Polls, Surveys and Opinions featured throughout Tumbit
Featured Polls, Surveys & Stats
Discussions, Advice & Topical Chat
Discussions, Advice & Topical Chat

Catalans Prepare to Vote in Defiance of Spain

Source: Bloomberg - Sat 8th Nov 2014
Catalans Prepare to Vote in Defiance of Spain

In more than 900 towns across Catalonia, an army of volunteers is preparing to open polling stations tomorrow and offer their compatriots a vote on independence in defiance of Spain's central government and the nation's highest court.

The informal ballot, which was stripped of its legal validity by a Constitutional Court ruling in September, will pose voters two questions: Do you want Catalonia to be a state? And, should that state be independent? Separatists led by regional president, Artur Mas, aim to win a majority in favor of breaking up Spain and use that mandate to force PM Mariano Rajoy to negotiate.

The run-in to the vote has been marked by legal salvoes from both sides: Rajoy's government wrote to public officials in Catalonia reminding them of their obligation to respect the Constitutional Court's ban, and Mas had an appeal to that ruling thrown out by the Supreme Court. The Catalan government talked of filing a suit against Spain in an international court while an activist group in Madrid responded with its own suit to state prosecutors demanding the police halt the ballot.

"The Spanish government is being really short-sighted," said Alex Quiroga, a lecturer in Spanish history at Newcastle University in England.

"Continually saying ‘no' and appealing to the Constitutional Court doesn't help. It's clear that only through negotiation can they solve the problem."

Bonds Volatile

Spanish bonds are likely to remain volatile through the vote and in the political maneuvering which will follow, JPMorgan analysts Gianluca Salford and Marco Protopapa said in a Nov. 5 research note. They advised clients to buy Irish government bonds instead of Spanish paper to avoid potential losses.

Mas's separatist ally Oriol Junqueras, who leads the Esquerra Republicana party in the regional parliament, said this week that investors should open talks with the Catalan authorities as soon as possible to establish how Spain's sovereign debt will be honored in the event of a breakup. He said Catalonia might shoulder as much as 21% or as little as 9% of Spain's EU1 trillion of public debt.

Catalonia is home to 7.4 million people in the northeast corner of the Iberian peninsula and has the largest economy of Spain's 17 autonomous regions, with annual output of EUbillion euros. That's about the same as Finland or, indeed, Scotland, where voters in September opted to remain part of the U.K. in their own independence referendum negotiated with the government in London.

Economy

GDP per capita in Catalonia is 17% above the EU average, whereas Spain's as a whole is 5% below. Catalonia-based companies make up about 12% of Spain's benchmark stock index, the Ibex.

The ballot is set to take place as the Spanish political establishment faces its biggest crisis since the return of democracy 36 years ago. With unemployment stuck at 24%, the 2nd-highest in Europe after Greece, and successive waves of corruption allegations eating away at the government's moral authority, the anti-bailout Podemos party surged into the lead in 2 opinion polls in the past week.

If the voting booths do open, that would constitute another blow to Rajoy who has insisted for months that the legal hurdles he's thrown up would prevent it. Deputy PM Soraya Saenz de Santamaria last week called the Catalans' plans a "perversion of democracy."

To get around the court ban, Mas is deploying more than 40,000 people who have volunteered to assist, allow public employees to remain at arm's length from the vote. Some have volunteered to assist on Sunday in a personal capacity.

Mas sought to win the right for the region's employees to participate, and for public property such as schools to be used, in his appeal to the Supreme Court rejected on Nov. 6.

Thousands of Catalans are ready to set up ballot boxes across the region anyway, in the expectation that perhaps millions of their compatriots will cast their ballots.

Recommended Reading :

* Madrid will not stop Catalan referendum if privately organized