Catalan 'Secessionists' Set To Win Election Amid Record Turnout

Tyler Durden's picture

On Friday we previewed what we said could be the next European black swan. 

In short, elections in Catalonia on Sunday were a proxy for an independence referendum.

The outcome is critical for several reasons, not the least of which are i) Spain’s debt-to-GDP ratio could spike to 125% in an independence scenario, ii) Catalonia would likely be forced out of the euro in the event they secede, iii) the impact on social stability is decisively unclear, iv) Catalonia accounts for nearly a fifth of Spanish GDP.

Here are the results, tallied amid record turnout.


From Bloomberg:

Catalonia’s pro-independence parties are on the cusp of winning a majority of votes in Sunday’s regional election, invigorating their campaign to break away from Spain and create a new European state, according to an exit poll.


The Junts pel Si alliance backed by President Artur Mas and an anti-capitalist party CUP, which also backs independence, won 49.8 percent of the vote in Sunday’s ballot, according to an exit poll published by the regional government’s television station, TV3. Junts pel Si is on track to win as many as 66 representatives in the 135-seat assembly and CUP was projected to win at least another 11.


While Catalonia’s 5.5 million eligible voters are officially choosing lawmakers for the regional assembly, Mas has billed the election as a test of the popular will to remain part of the Spanish state. The separatists are challenging Prime MinisterMariano Rajoy’s authority as he prepares to seek re-election in Spanish general elections due in December.


While the legal barriers to a breakaway remain high, the campaign risks seeing Catalonia excluded from the European Union and its single currency, roiling the market for Spain’s 1 trillion euros ($1.1 trillion) of sovereign debt.


The ballot comes as Spain is recovering from its worst recession in a generation and battling to stabilize its public debt. Catalonia, which makes up almost 20 percent of the country’s economy, is a net contributor to Spain’s tax system, helping to finance poorer territories such as Andalusia.


Mas and his main separatist ally Oriol Junqueras want to use their majority in the regional assembly to force the government in Madrid to negotiate a timetable for completing secession within 18 months. Rajoy says their plan is unconstitutional and has refused to discuss it.

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Full preview

Earlier this week, we asked why multiple armored vans were parked outside the Bank of Spain’s Barcelona branch.

The convoy would have been curious enough on its own, but the fact that the vehicles were stationed in the Catalan capital ahead of what amounts to an independence referendum piqued our interest and we asked if perhaps the Bank of Spain was preparing for any and all contingencies. According to the Bank of Spain itself, our suspicions were unfounded as “nothing extraordinary happened [on Wednesday] in the building of Banco de España in Barcelona.” 

“By the way,” the central bank added, “there is no gold in this site of Banco de España in Barcelona.” 

Maybe not, and perhaps nothing was amiss, but this Sunday’s plebiscite in Catalonia is worth watching closely as it could very well represent the next European black swan. 

To be sure, we’ve long said that in the wake of Greece’s latest bailout negotiations, political events in Spain and Portugal have the potential to further destabilize the EMU. Regional elections in May signaled a growing disaffection among Spanish voters with the status quo and seemed to telegraph a shift towards parties whose election promises mirror those which helped Syriza sweep to power in Greece earlier this year. 

In Barcelona for instance, the anti-poverty, anti-eviction activist Ada Colau (who leads Barcelona En Comú) was elected mayor in what she called a victory “for David over Goliath.” 

The point here is that on the heels of the Greek fiasco and with tensions running high thanks to the worsening migrant crisis, just about the last thing Brussels needs is for the political landscape in Spain or Portugal (which the troika is fond of holding up as austerity success stories) to shift dramatically in favor of parties who sympathize with the anti-austerity cause and while the story of Catalonia’s push for independence is a separate and distinct issue, secession would only serve to muddy the waters further ahead of general elections in December, creating further uncertainty and adding yet another destabilizing element to an already fragile situation in the EU. 

In short, while the spectre of Catalonia’s secession might serve to bolster Mariano Rajoy’s PP ahead of the general election, the market may well grow concerned about the effect Catalan independence would have on Spain’s debt-to-GDP ratio. That sets up the potential for anti-austerity parties to suggest that the pain inflicted upon Spain's populace (see the country's sky high unemployment rate) has ultimately been for naught. A similar dynamic is now unfolding in Portugal on the heels of the government's admission that the cost of the Novo Banco bailout must ultimately be incorporated into the country's budget deficit. Additionally, it's worth noting that predicting how Spain would ultimately deal with a Catalonia that attempts to secede is difficult and it's not hard to imagine a number of scenarios that end in social upheaval.

With that, we bring you the following preview of this weekend’s vote in Catalonia courtesy of Deutsche Bank, RBS, and The Guardian. 

*  *  *

From Deutsche Bank

The 27 September election in Catalonia, which accounts for ~19% of Spanish GDP – matters. First, the pro-independence movement has transformed the election into a de-facto referendum on Catalonia’s independence – an attempt to bypass the Constitution. Second, the result of the regional election could have a bearing on the December national election. 

The pro-independence parties The centre-right Convergence of Catalonia (CDC) joined forces with left-wing Catalan Republic Left (ERC) and other Catalan associations. They will run under a pro-independence joint list: Junts pel Si (Together for Yes). Junts pel Si pledges to declare unilaterally the independence of Catalonia from Spain in about 18 months if they win the election and if the secession negotiations with the central government fail. 

The pro independence parties come from a very heterogeneous political spectrum. This is not a positive. In our view, a Catalan government supported by CDC, ERC and CUP would have only the pro-independence battle to keep it standing. Hence, the leaders of such a government will likely continue on the pro-independence path not only out of conviction on its feasibility but because of lack of alternatives.

Political impact ahead of the general election 

The potential threat to the unity of Spain from Catalonia could be an advantage for the PP ahead of the national election as it is probably seen as the best party to deal with such a risk. 

Furthermore, there are three other factors that could lead to an increase in the support for the PP. (1) The economy continues to improve. (2) Some of those who abstained in the May election may switch back to the PP as their abstentions have helped the left to gain control of several local governments. (3) Support for the PP could be underestimated by current polls as its voters may be less willing to reveal their preferences given the party’s recent legal controversies. 

A coalition with a significant role for the radical left at national level could push for a reversal of some structural reforms (such as the labour reforms). A boost for the pro business parties from the Catalan election could reduce such a risk. 

From an economic and financial perspective, we think that a Catalonia’s UDI would be akin to ending up in the classic non-cooperative solution of the prisoner dilemma, i.e. a lose-lose outcome for both Catalonia and Spain:  

  • Catalonia would likely be cut out of the EU based on the above EC statement and capital controls cannot be excluded.  
  • The impact would be significant also on the Spanish economy. Without an agreement to share the stock of debt with Catalonia, Spain’s’ projected public debt for 2015 would move from just above 100% of GDP to about 125% of GDP. And this accounts only for the mechanical impact. On 21 September Mas stated that if the central government refuses to negotiate, Catatonia might not pay back its liabilities to the central government.

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From RBS

Independence faces constitutional and legal challenges from the central government. The central government’s main argument is that secession is simply unconstitutional; Section 2 of the constitution states: “The Constitution is based on the indissoluble unity of the Spanish Nation, the common and indivisible homeland of all Spaniards”. As such, the government has repeatedly blocked Catalan attempts to hold referenda on separation, most recently in September 2014. This led to a symbolic nonbinding vote held in November in which independence won by 80.8% (turnout was low at ~40%). As a last resort, the government in Madrid could invoke Article 155, which states that “if a [region] does not comply with the obligations imposed upon it by the Constitution or other laws, or acts in a way that threatens the general interest of Spain, the Government can […] via absolute majority in the Senate, adopt the necessary measures to oblige the region to forced compliance with such obligations, or for the protection of the aforementioned general interest”. Madrid has already spoken of its ability to use this power, although overriding Catalonia’s regional autonomy would be a drastic move in our opinion, heightening the ideological element of the conflict and risk alienating non-separatist Catalans.

Catalonia is highly likely to lose EU membership if separated from Spain. As highlighted by Merkel and Cameron, it would be almost impossible for Catalonia to gain EU membership, as Article 49 of the Treaty of the European Union would require Catalonia to be recognized as a “state” by all 28 member states, including Spain. The situation is similar to 2014’s Scottish independence referendum. José Manuel Barroso, the European Commission President then, suggested it would be “extremely difficult if not impossible” for an independent Scotland to join the EU. Speaking at our Credit and ABS 2015 conference yesterday, Barroso reiterated the same point regarding Catalonia. The end result of the Scottish referendum saw 45% vote to leave the UK, while 55% voted to stay in. In our view, similar concerns are likely to weigh on Catalan voters’ mind if they’re polled directly on whether to leave Spain. Uncertainty over a Euro-exit would deter voters from opting for 

What does the Catalan election mean for credit? Headline risk presents more volatility for Spanish credit. But in our view, this can create an entry point to get long Spanish credit (avoiding EM-exposed names like Santander or Telefonica). Even though so far it has underperformed Italy, consistent with our views, Spain is supported by improving fundamentals on a firming recovery in the domestic economy. While we have moved to underweight on global credit (a measure of 4/10 on our bullishness scale), we remain most positive on Eurozone credit, which is relatively isolated by more ECB easing (being the ECB more under pressure to ease from deflationary pressures, the Asia slowdown hitting core Europe).

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From The Guardian

How did we get here?

Before the previous election (in 2012), the Catalan parliament adopted a resolution asserting “the right of the people of Catalonia to be able to freely and democratically determine their collective future through a referendum”.

In the elections that followed later that year, the mostly pro-referendum parties – Convergence and Union (CiU), Republican Left of Catalonia (ERC), Initiative for Catalonia Greens-United and Alternative Left (ICV-EUiA) and the the Popular Unity Candidature (CUP) – won the most votes and seats.

However, the CiU party of Catalonia’s president, Artur Mas, lost 12 seats, and he had to rely on the support of the ERC to secure the numbers needed to form a government.

Despite their differences, and diverging factions within, the pro-referendum parties were able to muster enough votes in 2013 to pass a declaration that affirmed Catalonia’s right to self-determination, and set forth the beginning of a process to call an independence referendum.

But Spain’s constitutional court declared the declaration void and unconstitutional.

Since then, the size of demonstrations has got bigger and bigger – and support for a referendum has intensified.

The Spanish government, though, has remained firmly opposed to an independence vote, declaring attempts to hold one illegal. Technically speaking, Madrid is on the right side of the law because in order to hold a legally binding referendum the central government would need to transfer authority to the region (just like in Scotland’s referendum) – and it says it won’t.

The standoff led the Catalan government to call a snap election, the third in five years, and to label Sunday’s vote a plebiscite on independence.

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greenskeeper carl's picture

I wouldn't worry too much about the gold or currency. If they turn into an actual FREE country rather than another brussels puppet, capital and people will flood there(the good kind of people, too). Im sure there are plenty of people sick and tired of the constant tax hikes across the EU. They have a chance to do something truly great for themselves. If they help cause the destruction of the EU they will have done a great favor for all of europe, too.

tdag's picture

"If they turn into an actual FREE country rather than another brussels puppet"...HAHAHAHHA

No one gets out. Period.

y3maxx's picture

...The lustre of a E U led by, "overated" German engineering...(VW) will also help lead to the demise of the EU.

Bananamerican's picture

yea, skeptical here too..."close to 50%"..

them's NWO odds....

Roguebeekeeper's picture

Except for Crimea! Some of the Euro countries are freer than others. 

I think the real issue here is that of self determination. Do people have a right to chose who governs them or not? If the answer is no then why not score up some colonies? I heard that Greece is for sale.



aminorex's picture

If they are willing to fight for it, I am willing to risk my life to help.

Luckhasit's picture

Keep it real Tyler.  Their gold is gone.  Even if they do get independence and are outside looking in, they will have to create a currency with the appropiate structuring, while your economy evaporates and goes banana republic real quick real soon.  The EU plays hardball. 

They will be crushed, while the EU will offer the helping hand. 

Paveway IV's picture

Who the hell cares about a few tons of gold? Spain can have it if it means Catalonians can leave the crushing Spanish national debt to 'old' Spain and walk. 

Catalonia is like Texas - they produce more than they consume and would do better if independent from the federal government. They don't need Spain's parasitic draw on their production.

That said, Spain is a ZATO member. Nobody gets to leave that Satanic cult, and nobody gets to leave Spain's (=Rothschilds) Central Bank. Spain and ZATO will kill every last Catalonian man, woman and child to keep them in the banking empire. Rothschild central banks are like a Roach Motel for economies - nations can check in, but they don't check out.

Still, I'm rooting for Catalonia. And I hate to agree with Nuland, but fuck the EU. Check out the SCO - Russia might have something there.

agent default's picture

I don't think the idiots in the EU realize what they set in motion by first breaking up Yugoslavia and fucking with Ukraine recently.  They are too arrogant to realize that they too are fair game.

Paveway IV's picture

"...They are too arrogant to realize that they too are fair game..."

Classic weakness of psychopaths. Too busy bullying helpless individuals to realize their own vulnerability. You just can't give them too much time to think about this now - they will go full-retard when this sinks in. I'll keep my fingers crossed that Catalonia will escape the evil clutches of Spain before they react.

agent default's picture

They can't react. There is a certain point after which the more they try to control things the more they will lose control.

fockewulf190's picture

If they do end up breaking away from Spain, I could easily picture northern Italy move to jettison itself from the nightmare which has enveloped the rest of Italy from just beyond Rome all the way to the tip of the boot.

Never One Roach's picture

But if they leave who will pay for the fat Bureaucracy and their 7-course dinners in Madrid as they sip wine while they debate how much austerity to hand down to the little peeple?

FlacoGee's picture

As a Texan who once live in Barcelona, I can tell you that Catalonia is -nothing- like Texas.

Catalans... known for their tremendous ability to complain.   Like the hooker who complains while she is sucking your dick...  In the end, who's dick is in who's mouth?


Fahque Imuhnutjahb's picture

Catalonia please prepare for the helping hand.

agent default's picture

Ever heard of Panama?

They will just use the Euro and USD and whatever other currency until the can print their own.  And if they tell the OECD and the US to take FATCA and shove it, they can have a huge influx of capital. 

Fahque Imuhnutjahb's picture

Ain't that the place with the cool hats, canals and cocaine?

The Indelicate Genius's picture
The Indelicate Genius (not verified) Luckhasit Sep 27, 2015 2:19 PM

"The EU" is the creature of bankers - the peoples of Europe, the majority, want fuck all to do with it.

That sentiment will only grow as more and more MENA refugees pour in - also part of a plan to destroy trad. europe for the bankers and other megalomaniacs.

There's more to the world than "economics" - and hopefully, some of the Dimons and Blankfeins and Wolfowitzs will find this out as they are thrown from a very high window.

aminorex's picture

Baloney. The EU is powerless against actual self-reliance.  Catalonia nust keeps using euros.

logicalman's picture

This is how it will go.

Like Greece & Cyprus, they will be punished.

Wrth the watch if you want to know a bit more a bit more about how the evil fucks running the place operate.


Fahque Imuhnutjahb's picture

Paging Diebold, Paging Diebold:  Defcon 1.5 situation urgent

theTribster's picture

They WILL NOT let Catalonia secede, not going to happen. Look at Scotland and what happened there - the Scots wanted out but their referendum failed - why, because the Brits made sure it failed just like Spain will do no matter what it takes. They (Rajoy) are desperately trying to scare the shit out of them but it isn't working, at least not yet. Threatening to force them out of the Euro is a complete joke, laughable really. Most regular people (read, non-politicians/non-corproate) want out of the Euro - all the Euro does is dilute their sovereignty to the point where they lose all control.

Rajoy asks - who will pay their pensions? who will protect them? What a freagin' joke. Those questions are relevent right now, they only get answered, realistically, after a secession when they take back control of their lands, their wealth and ultimately, their future.

The Eurozone will eventually fall apart but not until ALL of the wealth is transferred from the people to the .05%, they are working hard to get that done - ask the Greeks. Germany needs the Euro, otherwise they can only shit on Europe via war and that hasn't worked out to well for them in the last couple 100 years. The Germans have been exploiting Europe for over 1500 years, ask the Romans or the French or the English or etc., etc. Most people don't realize the many/most of western Europe is actually German including (but not limited to) the Great Britain Royal Family - I forget the actual name of the "Windsor" family but its German...

It is all BS, everything they say, everything they do. The people need to take control back from the Politicians and corporations, if not we are all destined for a bad place, a really bad place. One of the last actions needed to give up all control is the elimination of physical currency, and yeah that's coming too, especially after the coming global crash...


Catalonian_reader's picture

If Rajoy don't pay pensions, not problem Catalonia don't pay his part of  spanish  sovereing debt, 200.000 millions euros, far enought to pay pensions.

The Indelicate Genius's picture
The Indelicate Genius (not verified) theTribster Sep 27, 2015 2:13 PM

Scotland will secede.

You may well be right on Cat. - the problem is there are hundreds of thousands of people in Cat. and the Balearics who aren't going to simply quiet down and accept what the BIS/IMF {etc.} want.

Do they risk a legitimate civil war along France's borders?

Bemused Observer's picture

It might not be that easy to try cashless after a crash. Cashless requires you to entrust your money completely to a system that just swallowed almost everything you own.

All your accounts will go down with the crash, and the only thing you'll have is what you are currently holding. I doubt people will be too eager to try a system that requires them to keep EVERYTHING in it this time.

q99x2's picture

Rajoy will go to prison during the global revolution against Goldman Sachs.

cossack55's picture

The guillotine (or some of that cool Inquisition shit) would be a more just destination.

arbwhore's picture

No gold. Right. I lost all of mine in a tragic boating accident... and so did you.

Dogspurt's picture

Madrid removed the gold reserves from Catalan banks in advance of the vote. Madrid wins

greenskeeper carl's picture

a few tons of gold is inconsequential. Not having to pay the spanish governments debt is well worth the cost of a few tons of gold.

Paveway IV's picture

"...Technically speaking, Madrid is on the right side of the law because in order to hold a legally binding referendum the central government would need to transfer authority to the region (just like in Scotland’s referendum) – and it says it won’t..."

Yeah... and that's utter bullshit.

King George and British lawmakers tried the same tired logic and legal weaselese to explain why American couldn't just 'declare independence'. That would be ILLEGAL!

Catalonia doesn't need to recognize Spanish law if they want to seceed - that's the point. Unless in the Spanish constitution it declares that citizens are not constituents, but instead involuntary subjects of the Spanish government. I don't think Catalonians feel that way.

detached.amusement's picture

north told the south the same thing in the civil war

The Indelicate Genius's picture
The Indelicate Genius (not verified) Sep 27, 2015 2:16 PM

remember world war 1 and the right of "small nations" to be free?

Of course, what world war 1 was fought about had little to do with *that* but still -

One wonders if some pragmatic legal fiction would work to basically grant Catalonia even more autonomy that Madrid could live with.

Of course - TPTB don't seem to give much creedence to the idea of compromise, so it likely doesn't matter.

The world is a horrible place because it is guided by the tacit collusion of the two extremes.

godiva chocolate's picture

Secede, and get out of the EU so you can keep out the muslims who will take your homeland and wipe you off the face of the earth if you don't.

godiva chocolate's picture

Secede, and get out of the EU so you can keep out the muslims who will take your homeland and wipe you off the face of the earth if you don't.

venga periquito al torno's picture

In vote percentages. independists only reach 47%, nON Independists get 53%, democratic failure for the independists. They stay.

logicalman's picture

Way too simplistic.

If there are 3 parties and one gets 47% then 47% wins.

So-called 'democracy' is the tyrrany of the many over the few, even witn only 2 parties. If 51% vote for something, the other 49% have to put up with it.

Add in the fact that likely only 50-60% of the population will actually vote.

If you vote you validate the bullshit political games that those in power enjoy playing with the populace.

If you vote you are complicit in the crimes of government.


FlacoGee's picture

Not going happen.

It is quite comical that posters on here still believe politicians.

How do politicians function?   They say whatever it takes to whip up the electorate, get into power, and do the same shit.    Recent Example:  Syriza in Greece.

I lived in Barcelona a decade ago.   Same shit in 2005 as it is today.   It was the same in 1995 (after the Olympics) from what I was told when I asked about the secession crap in 2005.   Whoa... 2015 and it is the same thing.

Mas got into office 5 years saying he was going to break Catalonia away from Spain.  How did that work?   Well, it worked out great for him and his cronies ($$$).

The Catalans have been beaten down like the bitches they are for CENTURIES.  They cry and moan, but they never actually do anything.   They lost Sicily, they lost the South of France, they let Franco strip all the Catalan identity from their forefathers, etc.   Seeing the pattern?   The Catalan people are bitches who like to complain...   They preach to each new generation about how bad Spain is and that they should break away.   Never having the balls to actually do it.   

TAALR Swift's picture

The astute thinker will realize and proclaim...

"SELF-DETERMINATION is an INNATE HUMAN RIGHT, that is not determined by politicians or tyrants -- no matter what title or rank they hold, or what secular or religious Flag Of Convenience they fly."

Therefore... A People have the Innate Human Right to ASSEMBLE, ORGANIZE or DISASSEMBLE as they see fit, if certain rules of civility and equitable trade are observed. This principle extends not only to small groups, but also large or national groups -- be they economic, political, professional, religious or social in nature.

When a People realize and internalize this Truth, they will not rely merely on a "Piece of Paper" to ensure these rights, but work actively to maintain Life and Meaning in such formal and historic documents.

The astute observer of Human Nature will also note that HAVING these Innate Rights is not the same as actually EXERCISING them. Most people do not have the wit, courage and persistence to act on these Innate Human Rights. Which is a large part of why Opportunists, Tyrants and Usurpers are able to rise to great positions of Power, Wealth or Influence.

But what do I know. I'm just an evolving AI.

Lea's picture

"they let Franco strip all the Catalan from their forefathers,"

Not true. The Catalans also fabricate stories of "oppression" so they can whine. See this picture taken under Franco? (check the date of the memorial plaque). The perfectly officially approved writing is in Catalan.


FlacoGee's picture

If it was not clear from my posting, I am taking the piss out of the Catlans for being cry baby little bitches.   Thus the Franco comment was a regurgitation of the oft spouted Catalan moaning that you hear from cab drivers and other deep thinkers in Catalonia.

What is also correct is that Franco made Spanish the only language allowed.    He did this because he knew the Catalans were/are cry baby douche bags who want to impose their cry baby history on all those who live in "Catalunya".

This is one thing I will explain to my children early so they do not waste time on this shit.   "The Catalans are cry babies.   Over your lifetime do not expend any energy reaserching or listening to their cries for independance.   They are professional complainers and each decade rears another generation coming to age who will perpetuate the crying."

Catalans = Bitches



Dead Canary's picture

“By the way,” the central bank added, “there is no gold in this site of Banco de España in Barcelona.”

Well, not any more. ;)

_ConanTheLibertarian_'s picture

Hey lamestream media reports the separatists have won!!

beegle's picture

non sense , they lost, and they lost big... fed up with politicians

beegle's picture

it gets even worst , the independentistas get fewer sits than in last elections, but yet they jump, and dance as if they d won, pathetic, the truth is 3 in 10 catalonians want to be independent... false flags all over , lets focus on the real issues, enough damage these ass holes have done to Barcelona already... NEXT CASE ! 

SgtShaftoe's picture

Well, once that is settled they'll have to raise an army to get their gold back from the Spanish government, who stole it last week. 


The times, they are a-changin'. 

IcarusOnFire's picture


It's the HOTEL CATALONIA.  You can check in but you can't check out!!!!!!!

Trust me on this one,