The President of the Catalan regional government (Carles Puigdemont) has not really clarified if his statement on Tuesday the 10th of October was or not a declaration of the independence and has maintained his call to dialog with the Mariano Rajoy, points out Jesus Castillo, Research Analyst at Natixis.

Key Quotes

“At this stage we believe that the Spanish government has no other option than to apply the article 155 of the Constitution with the aim to restore the normal functioning of the institutions. From now on Catalonia and Spain enter in an unchartered territory.”

“Today at 10am finished the second deadline that the Spanish government gave to the President of the Catalan government Carles Puigdemont to clarify if yes or no he declared the independence on the 10th of October. In addition Puigdemont was supposed to indicate the measures taken to revert all the measures that didn’t comply with the legal obligations.”

“After several days of internal debate within his own coalition, Puigdemont has finally declared that the independence decided, on the back of the outcome of the 1st of October referendum remains suspended. However he also write that if the Spanish government persists in the application of the article 155 of the Constitution, that allows it to take the control of the regional administrations, the Catalan Parliament will formally approve by a vote the declaration of the independence. Thus the situation remains not very clear. We still do not know if the independence has been declared or not since it is suspended but not approved by the regional chamber.”

“The ball is clearly in the camp of Mariano Rajoy. He has call for an extraordinary meeting of his cabinet on Saturday and therefore inform of the next move of the Spanish government. At this stage he has not many options:

1/ The Spanish government decides to continue with the application of the article 155. Then it gives the detail of the measures it is going to send to the Senate for its approval. The measures may be more or less soft from a control from strategic areas to the full control of the Autonomous Community with the appointment of an interim delegate of the state that will assume the regional executive power.

2/ The Spanish government considers that the independence has not been yet declared and that it has some leeway to avoid the use of the article 155. In this scenario the government tries to gain times to avoid a decision that may result in an elevated political cost. However, the final outcome of this potential strategy is not clear at all.”

Our view is that the Spanish government is going to use all the legal tools available. It cannot accept that the current crisis lasts more. Thus we believe that it will order to some strategic regional administrations to obey to its instructions with the aim to revert all the illegal decisions taken to the date. Before that, the Senate has to approve the measures proposed by the Spanish Government. This can take several days since a parliamentary session must be called previously. Thereafter, the President Puigdemont can also ask to be heard by the senators to defend his stance.”

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