Spain Politics


Catalonia independence push imminent | separatist parties win absolute majority in parliament

In an election framed as a de facto vote on independence, separatist parties won an absolute majority in the Catalan regional parliament on 27 September. Artur Mas, the regional President of the Generalitat of Catalonia, Spain’s wealthy north-eastern region, had called early regional elections to push for independence from Spain. Preliminary results show that pro-independence coalition Together for Yes (Junts pel Si) came in first winning 62 out of 135 seats and 39.5% of the vote. The other pro-independence party, far-left Popular Unity Candidacy (Candidatura d’Unitat Popular, CUP) came in sixth with 10 seats and 8.2% of the vote. Together the two separatist parties secured 72 out of 135 seats in the regional parliament, surpassing the 68 seats needed for an absolute majority. However, the parties failed to secure over 50% of the popular vote, winning just under 48%.

Among the parties opposed to independence, Citizens (Ciutadans) surpassed expectations coming in second with 25 seats and 17.9% of the vote. While the People’s Party of Catalonia (Partit Popular de Catalunya, PPC) and the Socialists’ Party of Catalonia (Partit dels Socialistes de Catalunya, PSC-PSOE), whose national affiliates have governed Spain for more than 30 years, performed poorly winning 8.5% and 12.7% of the vote respectively. Catalonia Yes we Can (Catalunya Si que es Pot) a coalition containing newcomer Podemos with a less clear stance on independence, fell well short of expectations and gathered 8.9% of the vote. Notably, voter turnout recorded a record high of 77.4% underscoring the importance of the election.

In the coming days, the parties will begin negotiations to form a government. While an agreement between the two separatist parties, Together for Yes and CUP, appears most likely, negotiations could be challenging due to conflict over the incoming Catalan President. In the medium term, Together for Yes is expected to carry on with its pledge to lead a transitionary government and work towards achieving an independent state by 2017. However, despite the election result, Catalan independence still appears highly unlikely, at least in the near-term. As the pro-independence parties failed to win over 50% of the popular vote, this suggests that the majority of Catalans may not support a completely independent state. Moreover, a number of political and legal hurdles lie in the way. Spain’s central government is fiercely opposed to the region’s independence and argues that any declaration of independence is illegal under the country’s constitution. Following the election, Spanish Prime Minister Mariano Rajoy commented to reporters: “What I’m ready to do, as I’ve always said, is listen and talk. But I’m not ready, under any circumstances, to get rid of the law.” In addition, the status of Catalonia’s EU membership as well as whether international organizations would recognize the region as an independent state remain unknown.

Nonetheless, the regional election will likely have implications going forward. The strong showing for independence parties should place more pressure on the central government to negotiate with the Catalan government, particularly over reaching fairer redistribution of resources across regions in Spain—a common complaint from separatists. In addition, the case of Catalonia will likely play into the election debate ahead of the December general elections. Some analysts have argued that the threat to national unity could boost support for the People’s Party in regions which receive net-transfers from the government, as they want to keep the current system intact.

From an economic perspective, the vote has sparked some volatility on financial markets. Spanish securities underperformed their regional peers in the run-up to the election, with the yield premium on 10-year bonds over Italy’s hitting a two-year high in September. In addition, the gap between Spanish and Catalan five-year bond yields has been hovering at its widest point in almost two years. Looking forward, despite increased political uncertainty related to both the Catalonia question and the upcoming general elections, Spain’s prospects are bright. The economy has become one of the fastest growing major economies in the Eurozone and the FocusEconomics Consensus Forecast panel sees GDP expanding 3.1% in 2015, which is up 0.1 percentage points from last month’s forecast. For 2016, our panel sees the economy growing 2.7%.

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