Maximum tension continues to dominate the political climate in Catalonia and Spain, with Spanish president, Mariano Rajoy, deciding to apply article 155 of the Constitution for the very first time in Spanish history; article 55 is a widescale power that has resulted in Rajoy announcing the destitution of the president of the Catalonian Generalitat, Carles Puigdemont, and of all the counsellors of his government.
Rajoy has vowed to hold a fresh round of elections within the next six months, following an emergency cabinet meeting in which ministers discussed how to respond to the recent October 1 Catalonian referendum, declared illegal by the Spanish constitutional court. Meanwhile, debate continues to abound regarding the important consequences for businesses in Spain and Europe, should Catalonia achieve its independence.
The Scope of Article 155
Although the invocation of Article 155 could theoretically allow the Spanish government to over full administrative control of Catalonia, Rajoy told the press that the autonomy of Catalonia was not under questions; rather, he says, his intent is to cease the powers of the politicians who organised the referendum.
Economic Concerns
On the day of announcing the invocation of Article 155 (Saturday, 21st October), Rajoy begged companies and financial entities not to leave Catalonia. Following the October 1 referendum, financial entity Banco Sabadell moved its fiscal residence from Catalonia to Alicante, while CaixaBank moved to Valencia. There is hot debate regarding possible consequences for businesses in Spain and Europe, should Catalonia achieve its independence.
Economists such as Miguel Ángel Bernal Alonso predict that if Catalonia obtained independence, it would be removed from the euro zone. If the euro were no longer Catalonia’s coin, say the experts, economy could lose stability, since consumers would have less options than before. For instance, variable guaranteed and unsecured loans referenced to the euro could suffer up to 30% from a change to Catalonian currency, which would undoubtedly be devalued in order to better enable to compete with foreign markets. Catalonia’s GDP would also suffer, predict experts, as would savings in Catalonia.
Rajoy’s decision to invoke Article 155 has garnered has mixed reactions from Spanish political parties. Seen as excessive by some, his decision has been praised by others, who feel that it is necessary to apply the Constitution to restore democracy, give the Catalonians their voice once again, and stop economic losses from ensuing. The Catalonians replied by taking to the streets in a protest attended by Carles Piugdemont himself and the Mayor of Barcelona, Ada Colau.
