Spain: Central government wants new elections in Catalonia – ING

Spain continues the process to take back control over Catalonia and wants regional elections which could be formalised by the end of the week and Puigdemont could react by calling regional elections himself or by declaring independence, according to Steven Trypsteen, Economist at ING.

Key Quotes

“The Spanish government is continuing the process of triggering Article 155 of the Spanish constitution. Over the weekend the central government of Spain decided to dismiss the Catalan president Carles Puigdemont and his government. They also decided to take control over the regional police force and public radio and television stations. The goal of this is to be able to call for new regional elections within the next six months.”

“The measures will be discussed and voted on in the Spanish Senate at the end of this week. The Spanish government only needs a majority in the Senate to ratify these measures, which it has. The measures are also supported by socialist and the liberals of Ciudadanos. The Basque Nationalist Party, in contrast, condemned the decision by the central government.”

“Puigdemont reacted by asking for a plenary session in the Catalan parliament to discuss these new developments. It seems Puigdemont has two options. He could call regional elections himself. In that case Rajoy could cancel the measures related to Article 155. The second option is to declare Catalonia independent in the coming days.”

“It is important to note that the powers given by Article 155 are not necessarily easy to enforce. The regional ministers could, for example, refuse to leave their offices and public servants could disobey orders from Madrid. The organisation of the regional elections called from Madrid could also be boycotted. On 1 October more than 2 million people went to vote even though Madrid did everything to make it impossible. This shows that controlling the region is not a simple matter.”

“Moreover, new elections would not necessarily remove the separatist parties. According to a poll held between 16 and 19 October (GESOP; El Periodico), new elections would not change much in the allocation of power in the Catalan parliament. Pro-independent parties would keep 50% of the seats.”

“The crisis is not over yet and so the Spanish bond yield spread could still climb a little higher on the back of recent events.”