Mas Trouble In Little Spain As Country Layers Constitutional Crisis Onto Economic Depression

Tyler Durden's picture

Catalonia's exit polls confirm over two-thirds of votes will go to pro-independence parties that will likely push for a referendum to break away from Spain, which the central government will challenge as unconstitutional. The more-populous-than-Denmark region is home to car factories and banks that generate one-fifth of Spain's economic wealth (larger than Portugal's). The incumbent, Artur Mas, has converted to a more radical separatist bias since huge street demonstrations in September showed the will of the people. As Reuters notes, growing Catalan separatism is a huge challenge for Prime Minister Mariano Rajoy, who is trying to bring down painfully high borrowing costs by persuading investors of Spain's fiscal and political stability. Critically, the exit polls suggest the dominance of separatist parties will mean a referendum for secession within two years - leaving us asking the simple question: who will buy any Spanish debt, even fully backstopped by the ECB, if there is a real risk that in under two years, 20% of Spanish GDP will simply pick up and leave.

  • *CATALAN PRO-INDEPENDENCE PARTIES WIN MAJORITY, EXIT POLL SHOWS

Pro-Referendum/Separatists:

  • *CIU WINS 54-57 OF 135 SEATS IN CATALAN VOTE, EXIT POLL SHOWS (Separatist)
  • *ERC HAS 20-23 SEATS IN EXIT POLL BY TV3 (Separatist)
  • *ICV, which backs referendum, wins 10-12
  • *CUP, which backs independence, wins 5-6

Anti-Referendum

  • *PP HAS 16-18 SEATS IN CATALAN EXIT POLL
  •  *SOCIALISTS HAVE 16-18 SEATS IN CATALAN EXIT POLL

Via Reuters:

Spain's Catalonia region, fed up with the tax demands of cash-strapped Madrid, was expected to elect on Sunday a separatist government that will try to hold a referendum on independence.

...

 

"It's time for Catalans to pursue their own nation. When you're in a relationship and you're not getting along you work for mutual respect. We've tried, but Spain hasn't," said Jose Manuel Victoria, 67, who voted for the main pro-independence party.

...

 

With more people than Denmark and an economy almost as big as Portugal's, Catalonia has its own language. Like Basques, Catalans see themselves as distinct from the rest of Spain.

 

Growing Catalan separatism is a huge challenge for Prime Minister Mariano Rajoy, who is trying to bring down painfully high borrowing costs by persuading investors of Spain's fiscal and political stability.

...

 

Up until recently Mas was a moderate nationalist who had pushed Spain to give Catalonia more self-governing powers. He has followed the popular mood in converting to a more radical separatism, but it is not clear he can hold a referendum legally.

 

Many Catalans are angry that Rajoy has refused to negotiate a new tax deal with their largely self-governing region. Annually, an estimated 16 billion euros ($21 billion) in taxes paid in Catalonia, about 8 percent of its economic output, is not returned to the region.

 

Home to car factories and banks that generate one fifth of Spain's economic wealth, ...

 

MONEY PROBLEMS

 

After a decade of overspending, Catalonia's debt has been downgraded to junk. Blocked from the bond markets, Mas has had to seek billions of euros in rescue funds from the central government in Madrid, itself fighting to prevent financial meltdown.

 

But, on the campaign trail, Mas focused on the region's gripes with Madrid. He told supporters he wanted to be the last president of Catalonia within Spain.

 

Wary that separatism could spread to the Basque Country and beyond, Rajoy said this week that the Catalan election is more important than general elections.

...

 

"Don't stay at home (on election day) if you don't want them to kick us out of Spain and out of Europe," she said at a campaign rally this week.

...

 

MAS RISK

 

Enthusiasm for independence could ebb if voters think the price is having to leave the European Union, leaving Mas high and dry.

 

"I have no interest in independence. It's totally irresponsible," said 45-year-old Luis, a Peruvian immigrant and salesman who voted for the PP.

 

"It means exiting the EU and a drop in Gross National Product... Mas is an economist. He knows this but he isn't saying it. Why?" said Luis, who declined to give his last name.

 

After the vote Mas will struggle to push conflicting agendas: his promised referendum on independence and his drive to cut Catalonia's high deficit.

The only possible spin by the statists is that there is a possibility that the CIU and ERC will not come to an agreement over a referendum, and that the wealth redistribution from Europe's solvent to its insolvent can continue under the guise of a common currency:

Mas - who converted to separatism after huge street demonstrations in September - is unlikely to win the 68 seats needed for an absolute majority.

 

He will have to team up with smaller pro-independence groups such as the Republican Left, or ERC, to push ahead with the plebiscite that he promised to voters.

Follow the results live here:

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hawk nation's picture

Looking forward to this movement in the states since we wont need a new constitution but simply going back to the original intent

Anyone who states the lost revenue from the government i say bull shit since with the fed gov out of the states affairs everything they do and every service the state provides ill get cheaper with federal regulation

The added advantage is if local politicians dont follow the constitution they ill be readily available for the consequences

magpie's picture

Yes, but these people are mostly going for a conditional independence and would love to stay in the Euro.

Ghordius's picture

Fiscal exit, yes. But in all three cases the mother countries are preparing paths for quite amicable divorces. It's not as if they would move away, after all.

Change country, not residence?

magpie's picture

Amicable ? Not so sure, when they are threatening their sucessor states with vetoes. As i said, to a degree it fits the EU game plan very well, but exposes it to extra negotiations of haircuts and stealth defaults on the way out and back in.

Ghordius's picture

Yes, but it's still a family affair.

OK, OK, the War of Roses (movie and historical) was one, too, but an extreme one nevertheless.

magpie's picture

Then off to the BB ticker to find the Catalunyan 10 year

Frastric's picture

"who will buy any Spanish debt, even fully backstopped by the ECB, if there is a real risk that in under two years, 20% of Spanish GDP will simply pick up and leave."

No problem, when Catalonia leaves the Spanish government will just revise all their GDP with Catalonia stricken off.

Catalonia they will say? Never heard of it!

Course Tyler may have a point if Catalonia is the only region stopping Spain descend into a second-world country...

djsmps's picture

They have the coolest cathedral in Europe, La Sagrada Familia. I say, go for it. After staying in Barcelona for a bit, I thought it was the only city in Europe that I wouldn't mind living in.

Atomizer's picture

Oh just stop selling us on the failed socialists European Union experiment.

 

  • Raise the retirement eligibility to 110 years
  • Bring back the theory on hosting century bonds

/sarc

markar's picture

Rajoy is a fool if he can't see the handwriting on the wall. The boys in Brussels, London, & NY want him out. His only move to save himself and Spain at this point is to default and leave the EU.

DavyRoySixPack's picture

Separatism in terms of governance and entire "entitled mathematics"/propaganda of socialism. Will Chicago style thuggery in the US embolden the dominant minority to force feed us dead food and dead talk about "cities on a hill?". Buck Rodgers -digital currencies that produce fountains of death - not youth. Yes, a remnant will escape this madness; this is my hope. People want freedom from these germs of generational treachery!    

michael_engineer's picture

Are there any studies or analyses available that indicate secessionary moves may be bad for both the secessionistas and their splinter?

I would think the cross commerce between the two groups would almost completely shut down which could easily lead to both groups ending up worse off than before.

10044's picture

coming to a state near you.

drdj4425's picture

Whether it is Catalonia or Texas; no one gets to leave without taking a proportionate share of the sovereign debt with them.  Eventually, the whole debt problem, be it individual, corporate, or sovereign, will end badly with all parties trying to walk away from what they owe.  

Joebloinvestor's picture

HAHAHAHAHA

So much for EU "integration".

Sure everyone wants in when there is a trough of cheap money to stick the snout in.

DeliciousSteak's picture

I don't see the problem. The European nation state is obsolete. It's a great thing that distinct regions might get the chance to be part of an integrated European structure outside of their traditional central governments. There is no need for European nation states anymore. That structure is obsolete and it's time to move on to the next stage of European social evolution.

Joebloinvestor's picture

You're on drugs pal.

No region wants to pay for another regions debt.

Yeah, one big centralized black hole.

Orly's picture

It would be more helpful if you would explain your ideas as to why that would be instead of sticking a link to a live chat on the board.

Are you taking into account all the debt the ECB is going to have to absorb over the next eight months?  Probably not...

:D

Haus-Targaryen's picture

I FUCKING HATE THE EMU/EU.  The quicker this dies, the better it will be.  Bar none.  

 

Down with these fascist bastards.  

Rustysilver's picture

Micheal_engineer

Common sense tells you that if you are smaller entity by about 10 million people your voice is

a lot smaller when compare to Germay, France or even British.  If you spending a lot of effort and money to keep it

together than it makes sense to let it go.  Look at large corporation vs smaller one: who has the advantage. Basic managment

theory says that a large corporation can smooth out it earning when some unit is not performing so well.  But that's under

"old" accounting technique. Today those rules don't apply.

 

michael_engineer's picture

Economies of scale favor not fragmenting.

Plus a pissing match over it could escalate to a shit storm. Shit storms are notoriously bad for local economies in a zero sum game. The proverb "don't shit in your own backyard" would be applicable. That would make it hard to smell the roses.

Bansters-in-my- feces's picture

"who will buy any spanish debt" Answer.....= "The Bernanke"

He eats that stuff for breakfast.

lolmao500's picture

And as the economy becomes worse in Spain because of separatists movements, the secession movement will become even bigger... the beast will feast on itself... which is good. Bring on the chaos, bring on the end of the EU and the euro!

ebworthen's picture

And there are those who still claim that nationalism will never return and the Euro will never fail.

The same who say the Greek debt is payable, and that austerity will work.

 

falak pema's picture

finally the regions get it : if the centre does not have the cojones to plug the plug, lets all go regional like ICeland and THEN pull the plug. 

Having said that I would not confuse current regional independence with the demise of Euro prject; just the demise of current financial system. What will come out if something does, could be more regional autonomy but more euro cooperation as well. 

The current system is in gridlock because the financial system is IMPORTED not home grown; the only home grown element is the banks who bought into global US finance model; and politicians who had no guts at the center. We need a profound overall which also includes an new paradigm of society. 

Tipping point first world. Copernician revolution. 

chistletoe's picture

maybe Catalonia can form a new union .... with Texas .....

Volaille de Bresse's picture

"They have the coolest cathedral in Europe, La Sagrada Familia"

 

It's an ugly piece of baroque shit (imo).

Bastiat009's picture

Catalonia will leave the EU? Says who?

Catalonia is broke and its main asset is from Argentina. Without Messi, Catalonia is nothing.

americanspirit's picture

A major difference between Catalonia and Texas is that in Catalonia the people can hold a referendum and vote to secede - in Texas the people have no direct say in state decisions through referendums. And by the way, Texas doesn't have any legal or treaty-based right to secede - that is a pipe dream. I live in Texas and wish that there was some basis for secession - I would vote for it in a heartbeat - but it just isn't there. It's possible that someone can come up with a brilliant plan, but so far it hasn't happened. Advocating for secession is just a way to express hatred for the Feds - which I share. Now if some evil terrorist group managed to vaporize DC with a nuke, god forbid with congress in session, then things might change. But gosh, that would be such an awful event I'm sure that no true American would ever want such a thing to happen.

Isotope's picture

1. Sounds a bit like a Tom Clancy novel.

2. Awful event: destroy DC suddenly vs. DC slowly destroying the rest of the country? I think I would have to give a thumbs down to DC.

Non Passaran's picture

The Spain constitution forbids such referendums that's why it is unclear whether Mas can actually change anything.

gould's fisker's picture

They'll double up on the Euro can-kicking meetings and no one will know what the hell is going on for another year--if the broke appear not to need immediate fixing double down.

q99x2's picture

Global Secession Against Banker Occupation.

dolly madison's picture

Catalonia has people still alive who lived under participatory democracy for a time, and some there have been calling for it again.  It is a place to watch.

ShortTheUS's picture

The latest dispatches by Reuters and AP say the results HURT the independence movement but Bloomberg and AFP say it boosts chances of independence. WTF??

CH1's picture

The goons from Foggy Bottom were whispering in ears. American news is now The Voice of The Elite.

sunnyside's picture

I think that as someone said earlier, much of the secession talk here in the US is just frustration.  A return to our Constitution could quiet that.  I have often wondered what would happen if a state really tried. 

Though not from there, I love Texas and most Texans I have met are nice people, but I think Alaska would be the better choice to leave first.  Geographically or physically separate and with the shortest length of time in the US, and with a fairly independent people, I could see it happening if the shit gets deeper.  DC may control the IRS and TSA types, but no way do I see our military getting involved to stop Alaska from telling DC to fuck off.

CheapBastard's picture

"Just walk away." Renounce all your debts. It's the New Paradigm.

Madrid2020's picture

The only thing the two Catalan Nationalist party dislike more than Spain is each other! Catalans don't want an independent state,they just want to pay less taxes and that Barcelona should beat Madrid. Everyone Chill,this ain't Bosnia or Northern Ireland. 

 

Satan's picture

Un altre estranger que sap el que vol...

falak pema's picture

The ongoing implosion in the Houses of Atreus of First World :

After the debacle of USA GOP in recent elections, the tearing assunder of one huge segment of the political process in the greatest democracy in the world; or what was supposed to be; we now have the perspective in this country of Oligarchy filling in the political vacuum created, by OVERTLY dictating to both left and right wings the way to run the country and the world. 

The implosion of the GOP into a populist far right "tea party" wing and an effete and corrupted "moderate" wing has spreadeagled the right aisle of political America. And this in NOT OVER.

Witness now the tearing assunder of right wing populist Spain into regional divides of historical nature : Castillian MAdrid vs Catalonian Barcelona; shades of the Franquist civil war now approach the Spanish people caught up in an economic turmoil imposed by the Oligarchs on their country. And its NOT OVER; ITS JUST BEGINNING.

Witness now also the incredible implosion of the right wing Gaullist party that has now occured over the last week in France. Where two factions are each other's throats like during the Saint-Barthelemy of sad remembrance. At this point in time it looks like the Right wing party will implode totally leaving no Gaullist opposition to current Socialist government. Its an incredible situation as the GAullists have created the current Vth Republic structure.

What have these three events got in commun as they shatter the democratic consensus in three major nation states?

The age of Oligarchy now runs de facto these countries and the political parties are feeling the pain, of having to assume insurmountable debts in government's name and having to assume in the context of mounting public discontent the public blame personally.

We are truly in the House of Atreus and when THIEVES FALL OUT in the storm clouds of their own visible impotence, the knives come out and democracy's blood will flow in gushes as these shills rush out blindly to protect their own personal interests. 

Why has the Pope of ZH's Euro bashing not written something on this trend in "Stupeeed France"; I refer to our good friend Wolfy of Testospit.

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