Spain: Heading for regional elections in Catalonia in early 2018 - HSBC

At a cabinet meeting on 21 October, the Spanish government agreed to go ahead with the implementation of Article 155 of the Spanish constitution, which effectively allows the central government to take control of Catalonia, notes Fabio Balboni, European Economist at HSBC.

Key Quotes

“This will now go the upper house (Senate) on Tuesday, 24 October.  The final vote is expected to take place on 27 October, where it will have to be approved by an absolute majority.  The ruling party Partido Popular (PP) has a majority (149 MPs in the 266-seat house) and the main opposition party, PSOE, with 62 MPs, has said that it will support the application of Article 155 (El País, 16 October). This suggests it will pass and should take effect immediately after the vote.”

“The only way to prevent Article 155 being triggered would be if the Catalan government called an early regional election, but so far it has ruled out that option.  Jordi Turull, an advisor to the Catalan government, said in a radio interview on 22 October that "elections are not on the table" (El Pais, 22 October).” 

“Things to watch

A regional election is likely to carry more weight than the recent referendum, but would still not be quite the same thing as an independence referendum. Indeed, there are several factors which could give an advantage to pro-independence parties in a regional election, provided they continue to present a united front, compared to a referendum, which is not possible under the Spanish constitution:

• The regional electoral law favours the geographical concentration which characterises these parties. In 2015, pro-independence parties got c. 48% of the votes, but a majority of seats in parliament. The latest polls suggest pro- and anti-independence parties are neck-and-neck in terms of seats in parliament (Sociologíca, 10 October);
• Anti-independence parties include everything from the right to the radical left of the political sphere, and it might be difficult for them to form a government. Cat Si que es Pot (the Catalan offshoot of radical Podemos), despite being against independence, is in favour of the region holding a legal independence referendum, which again could make it harder to reach a common position with the other anti-independence parties;
• If an election is forced by the central government under Article 155, it could affect support to pro-independence parties.”

“Other factors could pull in the opposite direction. Almost a thousand companies have now moved their headquarters outside of Catalonia, including the two major banks CaixaBank and Banc de Sabadell. Also given the threat by the European Commission of having to leave the EU (and therefore the euro) following possible independence, some voters might be wary of giving a too-strong mandate to pro-independence parties. Similarly, some fractures are also emerging within the pro-independence parties, with the leftist euro-sceptic CUP pushing for unilateral independence at any cost, and the pro-business PDECat favouring a negotiated solution, which currently does not appear to be on the table. The recent pledge by the central government to change the financing system of the regions, making it more favourable to Catalonia, could help lure in the less ideologically-driven supporters of independence.”

“We are sceptical whether there will ever be a "legal route" to independence. This is due to the risk, from the central government's perspective, of opening a Pandora's box with other regions following, the difficulties in changing the constitution to enable a referendum highlighted in our previous updates, and limited political incentives. Recent polls in Spain suggest that the parties which have been 'tougher' on Catalonia – like centrist reformist party Ciudadanos, which advocated for Article 155 to be triggered immediately after the referendum – have been the ones that have gained most in the polls.”