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Why Spain will not allow Catalonia to separate
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Loading...The Catalan separatist movement is the biggest threat to the constitutional order in Spain since the introduction of democracy was introduced in the late 1970s. Unofficial Sunday's vote puts 7.5m of Catalans on a declaration of independence that violates the authority of the Spanish court, national leaders, police and military. This vote calls into question the country's legal framework with an economy of $1 trillion.
The Catalan government demanded independence by consulting its people, and nearly 2 million people voted, with 90 per cent of them supporting separation. The Referendum Act in Catalonia says the regional parliament must declare independence within two days of the vote. In other words, this must happen until tomorrow. The problem with Catalonia is that Spanish Prime Minister Mariano Rajoy has the right to end Catalonian autonomy, with the central government being in the power to obey the area of Spanish law. This leads to many security issues in the region. If the Catalan police, subordinate to Madrid, tried to prevent the local government, the likelihood of many people going out on the streets of protest is great.
The biggest problem facing the Catalans right now, and at the same time, Madrid's only decision is that 90% of wage and public service money come from the capital, and any company or individual who does not pay taxes to it will be prosecuted by law as debtor.
On the other hand, if we have a real separation of the region from Spain, the country will very hardly be able to cover its debt, as Catalonia is responsible for 19% of Spain's GDP. There will be a strong fall in the euro, and the growth of the European economy will slow down due to worries about the Spanish debt.
Source: Bloomberg Pro Terminal
Jr Trader Petar Milanov
Bloomberg Businessweek: How Far Can the Catalan Rebellion Go?
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