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Catalonia still won't say whether it's declaring independence, but wants to meet with Spanish leader


Catalan regional government president Carles Puigdemont attends a regional government meeting at the Generalitat Palace in Barcelona on October 10, 2017.

Catalonia has once again failed to give clarity on whether the region is officially declaring independence, putting the ball back into the court of the Spanish government.

Madrid had given a deadline of 9:00 a.m. London time Monday for an official response from Catalonia, hoping to receive a clearer indication on whether it wants a break with Spain or not. However, when a letter arrived from Catalan leader Carles Puigdemont just two hours before the deadline, it failed to offer any confirmation either way.

The letter reiterated an offer by Puigdemont to meet Spanish Prime Minister Mariano Rajoy as soon as possible to discuss the situation in Catalonia, and asked that dialogue take place over the next two months, Reuters reported.

Madrid reaction

The initial demand for clarity came from Rajoy last week after Puigdemont made an ambiguous statement last Tuesday in which he seemed to declare independence before suspending it, calling for dialogue with Madrid.

How the Spanish government will react to Catalonia's refusal to declare its position is uncertain. It has previously refused to enter into dialogue before Catalonia clearly states its position.

Last week, Rajoy told Puigdemont that if he did declare independence Monday, he would be given an additional three days to rectify that decision, until Thursday October 19 at 9:00 a.m. London time.

The latest statement from Catalonia appears to muddy the waters and Spain's response will be closely watched.

If a declaration of independence is pursued at this further deadline, Rajoy has said he would be ready to invoke Article 155 of the Spanish Constitution which would allow him to sack the regional government and call for fresh elections.

This scenario is still likely, according to analysts.

"If the Catalan government chooses a hard line, we expect that Article 155 will be triggered (there are three more days for that to happen, with a final deadline set for next Thursday). While it is difficult to predict the exact contours of its implementation, we foresee that in due time a new regional election will be called in an attempt to restore the normal institutional set up," JPMorgan economist Marco Protopapa said in a note last week looking ahead to the deadline.

The Catalonia government — which had been emboldened to pursue independence following a non-binding referendum in the region in which a majority of voters voted for secession — had subsequently been weakened, in Protopapa's view, by a fracture within the pro-independence camp between more radical hard-liners and more moderate elements calling for dialogue with Spain.

In addition, a number of high profile businesses have threatened to relocate out of the northeastern region and the European Union has said an independent Catalonia would find itself isolated, outside the bloc.

Protopapa said the Catalan government "had been weakened by these events" while Bob Parker, investment committee member at Quilvest Wealth Management, who told CNBC Monday that the Catalonia crisis was a high-stakes event.

"Catalonia accounts for close to 20 percent of the Spanish gross domestic product (GDP) so there are some very big stakes here on this debate between Madrid and Barcelona," Parker said.

"If Catalonia did become independent that would have some significant negative effect on the Spanish economy which is why investors have been looking at this very clearly."



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Muslim Global: Catalonia still won't say whether it's declaring independence, but wants to meet with Spanish leader
Catalonia still won't say whether it's declaring independence, but wants to meet with Spanish leader
Catalonia has once again failed to give clarity on whether the region is officially declaring independence, putting the ball back into the court of the Spanish government.
Muslim Global
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