While it will not come as a surprise to anyone following ongoing events in Spain, moments ago the country's Constitutional Court said on Tuesday the referendum law passed by the Catalan government Sept. 6 to hold a vote on independence was unconstitutional and void, a spokesman said. The court's full statement can be found here, while the opinion is at this link.
The court had originally suspended the referendum law as it studied its legality, though the Catalan government went ahead with the ballot regardless.
BREAKING: Constitutional Court rules Catalan referendum law is unconstitutional, void (vs. previous suspension). pic.twitter.com/Pgd1zOEp96— The Spain Report (@thespainreport) October 17, 2017
According to the Court, the Catalan legislation, approved by the region on Sept. 6 and suspended by the court the following day, usurped powers of the State to hold referendums. It also violated the principle that the Spanish nation is indissoluble.
In other words, this is the definitive confirmation from Spain that any Catalan separation is not possible, nor legal.
And with Spain having extended the ultimatum given to Catalan leader Puigdemont to definitively clarify his stance on the declaration of independence through Thursday, the separatist leader finds himself increasingly trapped, as a response will either prompt a crackdown by Spain or a blowback from other pro-independence groups inside Catalonia.
Meanwhile, the market appears to already feel more comfortable, with Catalan 2Y yields having fallen sharply from recent highs.