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Friday, July 19, 2024 | Back issues
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Economic Worry in Catalonia Amid Unanswered Mediation Calls

Political uncertainty over the future of Catalonia's secession bid has started spreading to the economy, with stock markets falling and big Catalan firms relocating — or considering a move — elsewhere in Spain.


BARCELONA, Spain (AP) — Political uncertainty over the future of Catalonia's secession bid has started spreading to the economy, with stock markets falling and big Catalan firms relocating — or considering a move — elsewhere in Spain.

Executives in Banco Sabadell, one of Catalonia's largest banks, are set to decide later Thursday on whether to move the company's official registration from Barcelona in order to remain under European regulations even if regional separatist authorities succeed in declaring independence as early as next week.

The news pushed the bank's shares up 4 percent, following heavy losses of almost 10 percent this week. On Wednesday, Spanish stocks suffered the biggest drop since the Brexit referendum in the U.K. last year.

In a sign that investors are taking the financial risks of independence seriously, one company, biotech firm Oryzon Genomics, saw its shares jump 23 percent since announcing Wednesday that it would move its headquarters out of Catalonia.

Around 40 percent of Catalonia's electorate of 5.5 million voted over the weekend in a divisive referendum marred by violence when police moved in to close polling stations and confiscate ballot boxes. The 'Yes' scored a landslide victory that was also expected given that the majority of those who want Catalonia to remain in Spain ignored a referendum that courts had suspended.

Catalan authorities and the Spanish central government are at loggerheads over the vote's legitimacy. Spain's 1978 Constitution bars any attempt to secession and rules that all Spanish nationals must have a say in the country's sovereignty.

Catalonia's regional parliament meets Monday to evaluate the results of the referendum and pro-independence lawmakers say the declaration will be made then.

As the clock ticks toward the deadline, the clamor for dialogue and mediation in the political crisis is gathering momentum in Spain, although Prime Minister Mariano Rajoy's government is sticking to its stance of not talking to those wanting to break up the country.

On Wednesday, Barcelona lawyers set up a commission to promote talks bringing together trade unions, economists and even the city's famed Barcelona soccer club.

The leader of Spanish opposition party Podemos, Pablo Iglesias, called the country's prime minister on Wednesday to urge him to seek mediation. But Rajoy insists that regional president Carles Puigdemont must first drop the threat of declaring independence.

Rajoy has been under pressure to act without further tarnishing his image or inflaming separatist sentiment in the region, where a strong cultural identity has mixed with years of grievances for what many Catalans see as an unfair economic treatment to the region, one of Spain's richest.

On Thursday, some of the additional police officers deployed in the region were seen checking out of a hotel in the coastal town of Pineda de Mar amid two sets of protesters — one side yelling at them to leave and another showing them support.

Protests mushroomed following the divisive vote on Oct. 1 to condemn police violence and urging the "occupying forces," as many demonstrators have called them, to leave Catalonia.

Spain's government has praised the police response, calling it proportionate.

In a statement, the country's Interior Ministry said that the departures on Thursday had been previously scheduled, as contracts ended with some of the hotels hosting the police reinforcements.

Because of difficulties in finding accommodation on land, some of the more than 5,000 extra forces deployed in the region have slept on three ferries docked in Barcelona and nearby Tarragona.


Giles contributed from Madrid.

Categories / Economy, Government, International, Politics

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