The Daily Update - Catalonia's referendum

Mariano Rajoy, Spain’s Prime Minister, this morning faces the Iberian Peninsula’s biggest constitutional crisis in living memory after the referendum in Catalonia overwhelmingly voted in favour of independence. According to Jordi Turull, the Catalan regional government spokesman, 90% of the nearly 2.3m Catalonians who voted yesterday (about 42% of those eligible) chose to vote for a separation from the rest of Spain. The number of ballots did not include those confiscated by Spanish police during the violence that erupted after Madrid declared the referendum unconstitutional and banned it. Nearly 850 people and 33 police are reported to have been hurt. Carles Puigdemont, Catalonia’s regional leader spoke after the results had been declared, saying ‘On this day of hope and suffering, Catalonia’s citizens have earned the right to have an independent state in the form of a republic’, adding ‘My government, in the next few days, will send the results of the vote to the Catalan parliament, where the sovereignty of our people lies, so that it can act in accordance with the law of the referendum’.

The manner in which the referendum result unfolded in Catalonia was probably the worst-case scenario for PM Rajoy's minority's government. On national TV after the polls had closed, Rajoy said the result ‘only served to cause serious harm to coexistence’ among the Spanish population, however, he was ‘not going to close any doors’ to dialogue.

The result is going to be a massive test of Spain’s minority government and will be closely watched across the rest of the EU. It looks as though if Catalonia declares independence over the next couple of days this could force the Spanish government to revoke Catalonia's autonomy by using constitutional laws. There will hopefully be a peaceful outcome; however it looks like talks, if they do indeed take place, will be a fraught and hazardous journey.

Last Friday, before the vote, ratings agency Standard and Poor’s maintained Spain’s investment-grade sovereign credit rating at BBB+ as well as maintaining the positive outlook assigned earlier in March. However, it did warn that tensions between Catalonia and Madrid could weigh heavy on growth if not sorted. A company spokesperson warned ‘We could revise the outlook to stable if the current tensions between the central government and the regional government of Catalonia escalated and started weighing on business confidence and investment, leading to less predictable future policy responses’.

Interestingly, yesterday Barcelona FC played its game against Las Palmas behind closed doors after the club asked for the match to be postponed due to the protests. After Barcelona was threatened with a six-point deduction if they did not go ahead with the game, they decided just 20 minutes before kick-off to play the game to an empty Camp Nou. During the warm-up, Barcelona’s players wore a yellow-and-red-striped shirt, the colours of the Estelada flag, an unofficial flag associated with Catalan independence. For their part, Las Palmas, had the Spanish national flag embroidered onto their shirts. Barcelona won comfortably 3-0.

And finally, as if the situation is not bad enough, Jeremy Corbyn, the UK Labour leader, thinks the Prime Minister Theresa May should intervene ‘to find political solution to the crisis’. We can see it now; Prime Minister Rajoy calling a halt to his day to take a phone from the PM, advising him on the art of negotiating!!

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