Month: October 2017

An air of calm settled over Barcelona after hundreds of thousands of Catalans attended a rally Sunday for Spanish unity.  The atmosphere of the rally was peaceful, as police helicopters monitored from above.

Amid a forest of Spanish national flags and chants of “Viva Espana,” protesters called for the jailing of Catalan president Carles Puigdemont, who on Friday issued a declaration of independence shortly before the Spanish government stripped Catalonia of its autonomy.  

But the calm that followed the rally in the Catalan capital attended by an estimated 300,000 people had the quality of the stillness before a storm.  Few are ready to hazard a prediction of how events in Catalonia may unfold in the coming days in a confrontation that has seen intransigence from both sides.

How Madrid starts imposing direct rule Monday on its restive northeast region, and how separatists respond, will determine the next phase in the month-long cat-and-mouse standoff between the politicians in Madrid and Catalan secessionists.  Both appear to be banking on the other side tiring like a bull played by a matador.

But fears are growing the perilous confrontation, at times visceral and seamed with past historical grievances including from the era of Gen. Francisco Franco, will degenerate into violence, despite the separatists’ determination to remain non-violent and Madrid’s eagerness not to repeat the national police violence that accompanied an October 1 independence referendum.

Olive branch

Despite the sacking of Puigdemont by Madrid among a raft of direct-rule measures announced Friday, including the dissolving of the regional parliament, Spanish ministers offered an olive branch Sunday by suggesting the Catalan leader is not barred from continuing in politics and even welcomed the idea of him taking part in regional elections Madrid has called for December 21.

“If Puigdemont takes part in these elections, he can exercise [his] democratic opposition,” said government spokesman Íñigo Méndez de Vigo.  That suggests the implacable deputy Spanish prime minister, María Soraya Sáenz de Santamaría Antón, a 46-year-old former prosecutor who is charged with overseeing direct rule, is not planning to kick off by arresting Catalan separatist leaders, a move some analysts say would be inflammatory, if it is tried.

Nonetheless, there will be several flash-points in the coming week that could push the confrontation, the worst political crisis to roil Spain since a failed military coup in 1981, down paths neither Madrid nor the secessionists want or could control, say analysts.  They worry the type of clashes seen on October 1, when the national police and Civil Guard tried to distort the referendum, will be seen when Madrid decides  to enforce direct-rule by closing down Catalonia’s parliament and regional government.  “I really will be amazed if we don’t see more of that, sadly,” said Sally Ann-Kitts, a lecturer in Hispanic studies at Britain’s University of Bristol.

“All sides seem to be living in Wonderland,” according to John Carlin, who was fired from his job at the Spanish newspaper El País earlier this month over an article he wrote highly critical of the Spanish government for its response to the independence referendum.

In an article for the London Sunday Times, Carlin argued the biggest risk may come if the idea takes hold “among highly energized independence-seeking youth that they have been the victims of a Franquista coup d’état.”

Another risk is that provocateurs on either side, violent anarchists or hardline Spanish nationalists take advantage of the mess Catalonia is in and organize an incident to provoke a reaction from their opponents.  On Friday young Spanish nationalists attacked a Catalan radio station.

Rival administrations

As things stand, Catalans will wake up Monday to two rival administrations in their region claiming legitimacy, the Puigdemont-led regional government and an emergency authority staffed by Spanish civil servants and led by Sáenz de Santamaría.  On Saturday, Puigdemont defied the fact that he was formally dismissed by the Spanish government and urged Catalans to “defend” the new republic in a televised address.

Separatist leaders and their supporters appear determined to wear Madrid down much as a matador does with a bull by obstructing and resisting the orders issued by Madrid. “The only answer we have is self-defense – institutional self-defense and civil self-defense.  I hope Catalans won’t be intimidated by Madrid,” says Abel Escriba, a pro-independence political scientist.

Madrid is banking on Catalonia’s 200,000 public employees and the executives of public companies in the region accepting direct-rule and ignoring the instructions of the Puigdemont-led regional government.  Public employee, teacher and firefighter unions have proclaimed their members will ignore Madrid’s instruction.

“We are going to ask them to be professional and to continue to provide services for their citizens,” a Spanish official told VOA last week.  The strategy is to be as light-touch as possible as the region is steered to the snap elections in December, which the Spanish Prime Minister Mariano Rajoy is gambling will go against the separatists.

A poll published by El Pais Saturday suggested a small majority of Catalans (52 percent to 43 percent) favor the dissolution of the regional parliament and the holding of the early elections.  Fifty-five percent of Catalan respondents opposed the declaration of independence, with 41 percent in favor of secession.

 
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Iceland’s ruling Independence Party took the largest share of the vote in the island nation’s parliamentary election but faces difficult negotiations to form a new government after populist candidates showed unexpected strength.

A record eight parties won seats in Saturday’s vote as the 2008 global financial crisis continues to roil the island’s politics.

Despite topping the poll, the Independence Party saw its support dip to 25 percent. The three-party governing coalition lost a total of 12 seats, leaving it 11 seats shy of a majority in parliament, known as the Althingi. The opposition Left Green Movement finished second with 17 percent, despite predictions it could win the election.

“Everyone lost,” said political analyst Gunnar Smari Egilsson said. “The current opposition gained no seats while the ruling coalition lost 12 seats. Populists alone triumphed.”

The upstart Center Party and People’s Party both exceeded expectations, winning 11 percent and 7 percent of the vote, respectively, with promises to work for the average Icelander. That proved appealing at a time when many working-class people feel they’ve been left behind by the island’s tourism boom.

Iceland became a poster-child for the global financial meltdown in 2008, when its debt-laden banks collapsed. That triggered political as well as economic chaos on this North Atlantic island of 330,000 people, with around 40 percent of the sitting members of parliament losing their seats in each election since the crisis. The current government, which had been in power only a year, collapsed in September amid allegations that the prime minister’s father backed an effort to help the job prospects of a convicted pedophile.

Voters took to social media Sunday to lament the country’s third government in four years — though some joked that the position of prime minister was probably the most unstable job in the gig economy.

Tourism has bolstered Iceland’s economy in recent years, largely because of the publicity surrounding the 2010 eruption of the Eyjafjallajokull volcano. While ash spewed into the air by the eruption initially stranded millions of travelers worldwide, tourists later flocked to the island to see its pristine glaciers, fjords and the Northern Lights.

Despite that growth, many Icelanders fear the financial crisis is not yet over. On social media, debate centered on those still struggling after the “hrunid,” or the collapse.

Egilsson — the former editor-in-chief of Frettabladid, Iceland’s largest daily — said left-wing parties missed an opportunity this weekend to defeat the “most unpopular government in history.”

“The left focused on middle-class politics, which did not resonate with the vast number of people excluded from the current economic boom,” Egilsson said.

The populists promised change and cash.

The People’s Party, founded by Inga Saeland, a former contestant on “The X Factor,” capitalized on anger and frustration over corruption. Although she has been criticized for Islamophobic statements and critical remarks about refugees, Saeland sidestepped immigration questions during the campaign.

The Center Party, meanwhile, promised to give a windfall to “every Icelander” by distributing shares in government-owned banks to the public.

That put the party over the 5 percent threshold needed to win seats in the Althingi, even though party founder Sigmundur David Gunnlaugsson was ousted as prime minister only last year after documents leaked as part of the Panama Papers showed his wife held an account in an offshore tax haven.

On election night, spirits were high among Center Party supporters who gathered in Reykjavik, the capital. The predominantly middle-aged men attending the celebration reflected the party’s electoral base.

Tour guide Magnus Kjartansson said he voted for Center because he supported Gunnlaugsson and believes the media has smeared the former prime minister.

“He is going to solve issues the rest of them are not brave enough to tackle,” he said.

 
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Hundreds of thousands of supporters of a united Spain are attending a rally in Barcelona Sunday, according to police.

Demonstrators marched in Catalonia’s capital to show they are in favor of the Spanish government’s dismissal of Catalonia’s Cabinet and squashing of the region’s secession push.

Meanwhile, ousted Catalan leader Carles Puigdemont has called for peaceful “democratic opposition” to Spain’s takeover of the region that once enjoyed a considerable amount of autonomy.

In a pre-recorded statement, Puigdemont said he would continue working to build a free country and that only the regional parliament has the authority to dismiss the Catalan government.

Spanish Prime Minister Mariano Rajoy dissolved Catalonia’s parliament, just hours after the regional body voted Friday in favor of independence from Spain.

In addition to dismissing the regional parliament, Rajoy has called for snap Catalan elections on December 21 and has stripped Catalonia’s most senior police officials of their powers.

Inigo Méndez de Vigo, a spokesman for the Spanish government, said Puigdemont and all other Catalonian leaders will be eligible to run in the December election.

“We are giving the voice to the Catalans in a legal and free elections, not so-called referendum which is outside the law,” he said. “So, this is the way of telling the Catalans, if you want to vote, you have the right to vote, do it under the conditions of the law and freely.”

WATCH: Spanish official: ‘Giving the voice to the Catalans’ 

The resolution to secede from Spain was drafted and presented by the more radical separatist factions of the regional coalition headed by Puigdemont, and it passed with 70 votes in favor, 10 against and 2 blank votes.

Friday’s resolution by the Catalan regional parliament ends a period of uncertainty over Catalan independence that has prevailed since an October 1 referendum on independence that won 90 percent of the vote in a 50 percent voter turnout.

Puigdemont could face a 25-year prison sentence for sedition. The central government already has jailed two separatist leaders and is prosecuting other officials accused of using public resources to support the independence bid.

Belgium’s Asylum and Migration minister, said his country could offer Puigdemont asylum. Theo Francken said on Twitter Sunday that independent asylum authorities would make the final decision about whether to grant asylum to the deposed leader.

World reaction

De Vigo said Europeans “do not want any new nationalism,” and he pointed out that no foreign nations had yet recognized an independent Catalonia.

“We know what in history nationalism has meant to Europe. So, I think it is a very positive reaction,” he said.

The United Nations spokesperson urged all sides “to seek solutions within the framework of the Spanish constitution and through established political and legal channels.”

The European Union Council President Donald Tusk, who has supported Madrid’s approach to the crisis, said on Twitter he hoped “the Spanish government favors force of argument, not argument of force.”

European Union President Jean-Claude Juncker echoed the sentiment, saying “there isn’t room in Europe for other fractures or other cracks. We’ve had enough of those.”

NATO, of which Spain is a member, said in a statement, “The Catalonia issue is a domestic matter which should be resolved within Spain’s constitutional order.”

Even regional authorities in the traditionally nationalistic Basque region have been reluctant to support the Catalan cause, despite growing relations between radical separatists in both regions.

Madrid’s efforts to keep the country united also have the continued support of the U.S. government. U.S. State Department spokeswoman Heather Nauert said in a statement, “… the United States supports the Spanish government’s constitutional measures to keep Spain strong and united.”

Russian involvement

Some international support for Catalan independence, however, seems to be coming from Russia, which is giving some recognition to Catalan separatists as reciprocal action for past U.S. and European backing to breakaway former Soviet republics and the controversial independence of Kosovo.

“By backing the independence of Kosovo, formed and prosperous countries such as Spain put at risk their own fragile stability,” Russian President Vladimir Putin said last week at an international forum in Sochi.

“It’s undeniable that Putin is interested in the destabilization and balkanization of Spain,” a senior Spanish diplomat told VOA, asking that his name not be used.

The de facto foreign minister of the Russian supported breakaway state of South Osetia, Dimitri Medoev, who is reported to be close to the Kremlin, visited Catalonia this week to set up an “interests office” in Barcelona to promote “bilateral relations in humanitarian and cultural issues.”

South Osetia pledged support for the “sovereignty of Catalonia” following the October 1 referendum.

Rogue states such as Venezuela and North Korea also have expressed support for Catalonian secessionism.

 Martin Arostegui in Barcelona contributed to this report.

 
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Xavier Gabriel can take some credit if the tiny Catalan mountain town of Sort is one of the most famous in Spain.

He runs a lottery shop called La Bruja de Oro, or The Golden Witch, in a town whose name, aptly, means “Luck” in Catalan. Its fortune in having sold many prize-winning tickets has made it a household name and a successful online business.

But the crisis surrounding Catalonia’s push for independence has changed life for 60-year-old Gabriel. He joined more than 1,500 companies in moving their official headquarters out of the wealthy region in recent weeks. Their main fear: that they would no longer be covered by Spanish and European Union laws if Catalonia manages to break away, dragging their businesses into unknown territory.

“The time had come to make a decision,” said Gabriel, who employs 16 people and describes himself as a proud Catalan.

​Hedging their bets

Like Gabriel’s, the vast majority of companies that moved their headquarters didn’t transfer workers or assets, such as bank holdings or production equipment. So far, it’s mainly a form of legal insurance. But as the political crisis escalates, the risk is that companies are deferring investments and hiring. There is evidence that tourists are holding off booking, perhaps frightened by images in the media of police crackdowns, street demonstrations and strikes.

And the situation risks getting worse before it improves: the central government’s decision Friday to take control of the region could spiral out of control if there is popular resistance, whether by citizens or local authorities like the Catalan police force.

“There is absolutely no doubt that the crisis is having a very damaging effect on the economy,” said Javier Diaz Gimenez, an economics professor at Spain’s prestigious IESE Business School.

Financial markets in Spain have so far fallen only modestly, reflecting investors’ apparent belief that the tensions will eventually be resolved. The Spanish government has called a regional election in Catalonia for Dec. 21 and could later consider revisions to the constitution that might placate some of the independence supporters.

But that could take some time, Diaz Gimenez says, given how confrontational both sides have been.

Banks leave

The list of businesses moving headquarters includes Catalonia’s top two banks, Caixabank and Sabadell, which are among Spain’s top five lenders. Then there is the Codorniu cava sparkling wine maker for which Catalonia is famous. Another well-known cava maker, Freixenet, is also planning to follow if the independence drive continues. Publishing giant Planeta, the world’s leading Spanish-language publisher and second biggest publisher in France, has also moved its official address out of Catalonia.

Caixabank says it suffered a moderate but temporary run on deposits because of the crisis, but said it has since recovered and was adamant the move was permanent.

Shares for Caixabank, Sabadell and some other companies have been volatile, falling after the Oct. 1 vote for independence and jumping sharply when they announced their decision to move headquarters.

Tip of the iceberg

Lottery shop owner Gabriel says ticket sales this month are up nearly 300 percent over last year, a rise he attributed to popular support for his decision to move his business.

Diaz Gimenez said the decisions to move headquarters, while not immediately affecting jobs, were “just the tip of the iceberg.”

“Plans to relocate firms or invest elsewhere are going to accelerate and some of it is going to go to, say, Poland, and it’s never going to come back,” he said.

“People that were thinking about investing in Spain and Barcelona are starting to think again,” he said. “It’s not just Catalonia. It’s the mismanagement by Spain, which is proving that it’s not a serious country because it cannot solve this thing.”

Spanish economy humming

The turmoil, ironically, comes just as Spain has been enjoying some of the fastest economic growth in Europe.

Its economy, the fourth-largest in the 19-country eurozone, grew by a hefty quarterly rate of 0.9 percent in the second quarter. The government has maintained its forecast for growth in 2017 at 3.1 percent, but revised its estimate for 2018 from 2.6 percent to 2.3 percent because of the political crisis. Moody’s credit rating agency has warned that a continued political impasse and, ultimately, independence for Catalonia would severely hurt the country’s credit rating.

Billions at stake

Tourism seems to be taking the biggest hit so far.

Experts say spending in the sector in Catalonia in the first two weeks of October — that is, following the independence referendum — was down 15 percent from a year earlier.

Tourism represents about 11 percent of Spain’s 1.1-trillion euro ($1.3 trillion) gross domestic product, with Catalonia and its capital, Barcelona, providing a fifth of that, being the most popular destinations for visitors.

Exceltur, a nonprofit group formed by the 25 leading Spanish tourist groups, expects growth in tourism this year to ease from an estimated 4.1 percent to 3.1 percent.

Reservations in Barcelona alone are down 20 percent compared with last year, it said. If the trend continues in the final three months of the year, it could lead to losses of up to 1.2 billion euros ($1.41 billion) in the sector, which in turn could affect jobs.

Analysts fear that the independence movement’s stated aim of continuing to create as much social and economic chaos for Spain as possible could exacerbate the situation. The Catalan National Assembly group has been openly talking about a boycott against Spain’s top companies and major strike activity.

“Spain, its tourism, everything is very dependent on image,” Diaz Gimenez said. “And this is just killing it.”
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