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Home>Spain braces for more turmoil ahead of first speech from rebel Catalan leader since independence vote

Spain braces for more turmoil ahead of first speech from rebel Catalan leader since independence vote

Spain braces for more turmoil ahead of first speech from rebel Catalan leader since independence vote

10/04/2017

By Barbara Kollmeyer, MarketWatch

Spanish assets absorb sharp blow Wednesday

The standoff between the Spanish government and separatists in the Catalonian region over the bid for independence by the latter appeared to be taking a turn for the worse on Wednesday.

Fresh resolve among those pushing secession was joined by pushback from the Spanish king after a tumultuous vote on Sunday (http://www.marketwatch.com/story/chaos-clashes-and-hundreds-of-reported-injuries-as-catalans-go-to-the-polls-in-vote-that-could-split-spain-2017-10-01) to ramp up political pressure in the wealthy and industrialized region and the country -- as well, of course, as in the financial markets, where Spanish stocks suffered worst day in 15 months (http://www.marketwatch.com/story/spanish-stocks-suffer-worst-day-in-14-months-as-rift-over-catalonia-independence-deepens-2017-10-04) on Wednesday.

All sides, and interested observers, are now awaiting a key address later Wednesday that could trigger still further tension, adding to the market anxiety over Catalonia's fate, which has hung over investors for some time now.

What's today's key event? Catalan President Carles Puigdemont is expected to make an address at 9 p.m. local time (3 p.m. Eastern) on Wednesday. It's his first major address since Sunday's controversial referendum, in which 90% of the 2.26 million Catalans who voted reportedly cast ballots in favor of independence (https://www.theguardian.com/world/2017/oct/01/dozens-injured-as-riot-police-storm-catalan-ref-polling-stations). The Spanish government has maintained that the vote was illegal. Puidgemont's speech comes on the heels of a BBC interview (http://www.bbc.co.uk/news/av/world-europe-41494090/catalonia-referendum-puigdemont-will-declare-independence-in-matter-of-days) on Tuesday. "We will declare independence 48 hours after all the official results are counted," he said in that interview, adding: "We will act over the weekend or early next week."

Why does it matter? If and when Puigdemont declares independence, the Spanish government is likely to react by invoking an article of the federal constitution and taking over the regional government. What he says Wednesday evening will be tightly scrutinized with that in mind.

Puigdemont told the BBC that if the Spanish government tried to intervene and take over the Catalan government, "this could be the ultimate mistake." No doubt, it could open the door to strikes and mass demonstrations, and possibly even more conflicts between police and rank-and-file Catalans. Puigdemont said a Monday call for mediation by someone inside the Spanish government received no response.

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