When last we checked in on Catalonia, Spain’s black swan was splashing around [7] in a desperate attempt to avoid snap elections just three months after the region’s parliament approved a “democratic disconnection” resolution and just four months after Catalans voted [8] in what amounted to a referendum on secession from Spain.
The problem was that although Junts pel Si and the Popular Unity Candidacy (CUP) parties won a majority of the seats in parliament, and although both parties back a split from Spain, the two groups were unable to agree on who should lead the government. The choice was between then-President Artur Mas (Junts pel Si's leader) or someone else.
Once CUP made it clear that they would not back Mas for President, the prospect of new elections reared its ugly head and the countdown was on to January 11 - the deadline for forming a government. "Lacking a majority in the 135-seat parliament, Mas had been reliant on the support of the pro-secession, far-left CUP group, which has 10 seats." WaPo wrote [7] in November. "But the CUP has refused to back Mas as regional president, because of his austerity policies of recent years and his party’s links to corruption scandals."
When national elections held in December proved largely inconclusive [9], the stage was set for new elections both in Catalonia and for the country as a whole. Because the various parties vying for seats in the national parliament are divided on the Catalan independence bid, politics in Madrid are inextricably bound up with politics in Barcelona, creating an extraordinarily complex dynamic that admitted of no obvious solution.
Well, with the clock ticking, Catalonia resolved its stalemate on Saturday when Artur Mas agreed to stand aside so that Carles Puigdemont can assume the presidency. Mas had indicated he wasn't willing to step aside as recently as Tuesday, but when push came to shove, advancing the secession bid proved more important than political grandstanding. Here's FT [10]:
Saturday’s deal marks a striking reversal for Mr Mas and his Junts pel Si movement, which had insisted until the last moment that it would not sacrifice the veteran leader. But with talks deadlocked, and a repeat election moving ever closer, Mr Mas finally agreed to make way for a party colleague, Carles Puigdemont, the mayor of Girona. The former journalist and editor is expected to be voted in as president of Catalonia in a special session of the regional parliament on Sunday.
Mr Mas made clear he was not retiring from politics, saying he was ready in particular to help the cause of Catalan independence in the international arena. “I remain at the disposition of the future president and the future government,” he said.
And from WSJ [11]:
Catalonia’s independence movement got renewed life as secessionist parties in the wealthy region reached an 11th-hour agreement on a new regional president, averting the need to call fresh elections.
Under the accord announced Saturday, Catalan President Artur Mas will step aside for another member of his party, ending a monthslong dispute between the biggest secessionist ticket [12] and a small far-left separatist party that refused to back the incumbent.
Mr. Mas told a news conference that his successor, Carles Puigdemont, a mayor and head of an association of pro-independence Catalan municipal leaders, is a firm believer in the secessionists’ plan to turn the region into an independent nation [13] within 18 months.
With the secession bid thus alive and well, PM Mariano Rajoy may be able to use the renewed "threat" of an independent Catalonia to his political advantage by calling on the Socialists to come to the table. "Xavier Garcia Albiol, the Popular Party’s leader in Catalonia, wrote Saturday on his Twitter account that the emergence of a new pro-independence Catalan administration underscored Spain’s “immediate need for a strong and stable government to respond to the challenge," WSJ notes, adding that "that argument could well strengthen Mr. Rajoy’s hand to pressure Socialists and other rivals opposed to Catalan self-determination to help him form a national unity government and avoid new national elections, said Andrew Dowling, a specialist on Catalan and Spanish history at Cardiff University in Wales."
"The inability to form a regional government would be a significant step back for the Catalan pro-independence movement. Markets may welcome this development, but the political impasse in Catalonia will not help to solve the gridlock at a national level," Deutsche Bank wrote, prior to the last minute deal. "For example, [a] pause in the independence process reduces the sense of national emergency that could have been used to justify a PP-PSOE temporary collaboration." The Guardian has a bit more color [14]:
The resurgence of a unified independence movement increases pressure on the acting prime minister, Mariano Rajoy [15], and his Socialist rivals to bury their differences and form a German-style “grand coalition” in Madrid to thwart the Catalan parties.
A senior official of Rajoy’s PP said on Sunday that a coalition with more than 200 parliamentarians would be the best response to what he called the challenge to Spain’s sovereignty.
“Now there are no excuses,” Fernando Martínez-Maillo told a news conference. “When the new legislature opens next Wednesday, we should reach an agreement among us all to form the broadest government possible of the main parties – the People’s party, the Socialists, and also, logically, [newcomer centrists] Ciudadanos, to, among other things, defend Spain’s unity.”
But even as Mas swears “Puigdemont has a very clear idea on the project of our country [and] is committed to making Catalonia a state," some, like the abovementioned Andrew Dowling, view the secession bid as dubious. “Are they really going to create their own tax authority and other state structures?” he asked. “Ignore the rhetoric and declarations, follow the actions.”
Yes "ignore the rhetoric" - which Puigdemont ratcheted up a notch before being sworn in. Here are the bullet points courtesy of Bloomberg which show that the new President's answer to Dowling's question is definitively "yes":
- New Catalan government to set agenda for talks with Spain, EU about the creation of a new Catalan state
- Catalonia to sets its security, defense plan
- Catalonia needs own central bank
- Catalonia to have a new electoral law
- Catalonia to expand its own tax agency
- Puigdemont speaks in a plenary of the Catalan parliament in Barcelona ahead of vote on his investiture
Remember, Catalonia accounts for some 20% of Spanish GDP. "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," Deutsche Bank wrote in September, describing the impact a messy separation would have for Madrid. "And this accounts only for the mechanical impact," Deutsche added. "On 21 September Mas stated that if the central government refuses to negotiate, Catatonia might not pay back its liabilities to the central government."
And so, the black swan lives. The question now is whether a renewed secession bid paradoxically creates political stability in Madrid by making a grand coalition between PP and PSOE possible. If Rajoy does succeed in forming a government while Catalans attempt to move forward with independence, the stage will be set for a showdown that could very well result in social upheaval.
Watch out for armored vans [16] at the central bank branch in Barcelona...
