Friday, October 3, 2014

Mas Doubles Down on Independence Defying Spanish Courts


Photographer: David Ramos/Bloomberg
Catalonia’s President Artur Mas is due to meet today the regional heads of the four parties backing the referendum to discuss their strategy in the wake of the Constitutional Court’s ruling


Catalan President Artur Mas and his allies resolved to push ahead with a plan for a Nov. 9 vote on independence, formalizing their defiance of Spain’s highest court and setting up a showdown with the government in Madrid.

The regional executive will maintain the decree officially calling the ballot, government spokesman Francesc Homs said in a televised statement. Mas met with the leaders of three parties that support his plan in Barcelona today.

The Catalan administration will “keep the decree so that citizens can participate and exercise their right to vote on Nov. 9,” Homs said.

Two weeks after Scotland voted against independence from the U.K. after 307 years of union, Mas is escalating his dispute with Spanish Prime Minister Mariano Rajoy, who says the vote is unconstitutional. Rajoy has said his government is ready to use all legal tools at its disposal to stop the ballot.

Mas has previously said he won’t break the law and promised for find a way for Catalans to vote legally.

“Mas had a road map and he had made a promise to his voters that he will hold the consultation so he will stand firm,” said Serafi Rodriguez, a fixed income trader at Morabanc Grup SA, which oversees almost 7 billion euros ($9 billion). “The closer we get to Nov. 9, the more volatility we will see.”
Pro-Referendum Alliance

The region’s 193 billion-euro economy is almost exactly the same size as Scotland’s, while its population is 7.5 million compared with 5.3 million Scots. Scotland, though, makes up less than 10 percent of the U.K. economy while Catalonia represents about twice that proportion for Spain.

The pro-referendum parties also agreed to ask the Spanish judges to reach a swift decision on the government’s legal challenge to allow the vote to go ahead.

“We call on the Constitutional Court to be as quick to lift the suspension as it was to block it,” said Homs, citing the agreements reached out from the on going government partners. “We’ll continue with an exhaustive analysis of how to guarantee the vote on Nov. 9.”

The Catalan leader is seeking to keep pressure on Rajoy to enter negotiations and satisfy nationalist groups that want to push on with the ballot, without triggering legal reprisals.
Court Suspension

Mas’s decision to keep the voting is following the naming of the electoral committee last night, a body created by the Catalan consultation law, which is subject to the legal block.

“Mas knows that the Constitutional Court suspended the consulations law and all related actions,” Spanish Deputy Prime Minister Soraya Saenz de Santamaria told reporters in Madrid after the weekly cabinet meeting. “State lawyers are working to add that violation to the lawsuit filed before the Constitutional Court,” she said, referring to the naming of the committee.

The stance by Mas is holding together an alliance of parties that more often found themselves on opposite sides of the political divide before the independence movement started to gather more momentum in 2010.

Mas’s Convergencia i Unio group is pro-business and has often cut deals with the central government. Esquerra Republicana de Catalunya, which means Catalan Republican Left, has always been committed to breaking away from Spain and has pushed Mas into hardening his position.
Mas’s Polling

Voters have shifted their support to Esquerra, which had the backing of 19.8 percent of respondents in a Catalan government poll released today. The party’s 6.7 percent lead over Mas’s CiU compares with 4.2 percent in April.

The spread between Catalonia’s 2020 bonds and similarly dated Spanish debt was little changed at 146.5 basis points today, data compiled by Bloomberg show. The gap was 101 basis points on July 2, signaling a deterioration of the investors’ risk perception since then.

“This story is far from over,” said Marco Brancolini, a London-based bond analyst at Royal Bank of Scotland Group Plc. “The market will have to start caring.”

By Esteban Duarte Oct 3, 2014
Bloomberg

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