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Catalonia to press ahead with independence if Spain imposes direct rule

Catalonia to press ahead with independence if Spain imposes direct rule
From CBC - October 18, 2017

Spain's political showdown with Catalonia is set to reach a new level on Thursday when political leaders in Madrid and Barcelona are expected to make good on pledges made to their supporters to stick to their tough positions over the region's future.

In an unprecedented move since Spain returned to democracy in the late 1970s, Prime Minister Mariano Rajoy will impose direct rule in Catalonia unless the region's leader, Carles Puigdemont, retracts by 4 a.m. ET an ambiguous declaration of independence he made last week.

Puigdemont told members of his Catalan Democratic Party on Wednesday night thathe would not back down andwould press ahead with a more formal declaration of independence if Rajoy suspends Catalonia's political autonomy.

It is not yet clear how and when this declaration would take place and whether it would be endorsed by the regional assembly, though many pro-independence lawmakers have openly said they wanted to hold a vote in the Catalan parliament to make it more solemn.

If Rajoy invokes Article 155 of the 1978 constitution, which allows him to take control of a region if it breaks the law, it would not be fully effective until at least early next week as it needs upper house approval, offering some last-minute leeway for secessionists to split unilaterally.

Article 155 has never been used during Spain's four decades of democracy.

Rajoy's People's Party holds an absolute majority in the upper house, the Senate.

Authoritative Catalan newspaper La Vanguardia reported that Madrid plans to appoint its own delegates to run regional government departments. Puigdemont would remain nominally in his role but stripped of all powers.

Even though it is not clear what direct rule will look like, the prospect has raised fears that social unrest could add to the turbulence, on the heels of an exodus of hundreds of Catalan firms and cuts to economic growth forecasts.

In the latest grim prediction, Spain's independent budget watchdog warned this week that continued uncertainty could wipe as much as 12 billion($17.6 billion Cdn) off potential economic growth next year, cutting forecasts by between 0.4 and 1.2 percentage points.

Catalonia accounts for 20 per cent of Spain's GDP.

'Volatility and confrontation'

Since an Oct. 1 independence referendum that Madrid branded illegal, some 700 companies have moved their head offices from Catalonia, according to Spain's companies' registry.

Banco Sabadell, Spain's fifth-biggest bank, is considering moving its top management to Madrid.

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