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Abu Dhabi, UAEMonday 24 September 2018

Bitter Catalonia election battle ends with deadlock forecast

Three parties – including two backing independence from Spain – are neck-and-neck in the polls before Thursday’s election

Republican left candidate Marta Rovira, speaks to journalists at Estremera prison where the party's leader, and former Catalan vice-president, is held. She was met by pro-unity campaigners with banners saying: "Spain does not give up" (AP Photo/Francisco Seco)
Republican left candidate Marta Rovira, speaks to journalists at Estremera prison where the party's leader, and former Catalan vice-president, is held. She was met by pro-unity campaigners with banners saying: "Spain does not give up" (AP Photo/Francisco Seco)

Election campaigning in Catalonia was ending Tuesday with months of demonstrations, economic crisis, and rancour set to be replaced by political stalemate in the messy aftermath of October’s failed bid for independence from Spain.

A bizarre campaign was ending in suitably quirky fashion late Tuesday with thousands of supporters due to attend final rallies held by the three front-running parties – but with only one leader free to address them in person.

With Carles Puigdemont the former president of the breakaway region in self-imposed exile in Brussels and his former deputy in prison, only Inés Arrimadas of the pro-unity Ciudadanos (Citizens) party was due to appear for a rally in Barcelona.

Her party has benefitted most from the chaos of October’s declaration of independence by the region’s separatist leaders, which led to Madrid seizing control of the region’s police force and budget, dissolving the parliament and calling fresh elections.

Fuelled by anger over Madrid’s handling of the 2008-09 global economic crisis, pro-independence parties had held a slim majority in the last regional parliament which allowed them to push through the referendum and independence declaration.

“It was like a bomb that suddenly exploded,” said Jordi Alberich, the director of Barcelona-based thinktank Circulo de Economia. “Although for five years there had been much noise and much confrontation, nothing happened. Then suddenly everything exploded a couple of months ago.”

The last polls on Friday suggested that pro-independence parties would fall just short of controlling parliament again, which could reduce immediate tensions but also set the tone for months of negotiations with Madrid over greater powers for Catalonia, according to analysts.

But with the result still too close to call, Mr Puigdemont was due to appear by video-link at a closing rally to maintain his push for an independent Catalonia after a series of fiery interventions from his Brussels base where the former journalist has sought – and failed – to secure European Union support for a new Catalan state.

The closing rally for his pro-independence rival and former deputy, Oriol Junqueras, of the ERC Republican Left, will be held in his home village on the outskirts of Barcelona while he remains in a Madrid jail for his role in the independence push. A delegation from the party visited him on Tuesday, where they were met by pro-unity supporters shouting insults.

Despite failing to secure bail to join the campaign, he has continued to make his views heard with the latest intervention an interview aired this week on national radio.

The Madrid government ordered an inquiry into the breach of prison rules along with that by another jailed pro-independence leader who gave an interview criticising the leaders of the parties who supported the status quo with Spain and describing them as the “useful idiots” of Spanish premier Mariano Rajoy.

The months of crisis prompted by the October 1 illegal referendum has seen more than 3,000 companies trigger the process to shift their headquarters out of the region. In addition to those firms making the symbolic move out of the region, a survey of 100 regional business executives found that they had delayed investment plans, while retail sales were down and unemployment was rising.

“The Catalan economy is being choked by the independence drive,” said Prime Minister Mariano Rajoy earlier this month.

Many see Catalonia as a separate nation with its own history, language and culture. More than that – on the hard-headed issue of cash creation – Catalonia is ahead of the rest of Spain.

It has more businesses than anywhere else in the country, accounting for a fifth of GDP: more than Madrid and nearly three times that of the Basque Country, where a 52-year armed independence conflict ended only in 2011.

Major banks Caixabank and Sabadell have led the way in shifting their headquarters – sparked by falling deposits - and concerns that they would no longer be covered by EU and Spanish rules if Catalonia broke away from the Spanish rump. Pro-independence campaigners said that fewer than 400 had completed the process with production and jobs remaining in Catalonia.

Spain’s national bank last week cut its growth forecast to 2.1 per cent for 2019 – a full point from previous predictions – citing the constitutional crisis in Catalonia. Any problems for Spain, the fourth largest economy in the 19-nation eurozone, would also have a wider impact on the European Union.

EU leaders have given strong backing to the Madrid government in dealing with the crisis, fearing any success for Mr Puigdemont could trigger their own secessionist problems, and have refused to be seen with the separatist leader.

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Catalonia’s economic importance means that the stakes will be high when 5.5 million voters head to the polls on Thursday. The threatened Spanish economy – which had been posting three per cent growth before the crisis – is likely to rebound if the crisis is not re-ignited by a strong pro-independence vote on Thursday, said economist Andrew Harris of London-based Fathom Consulting.

“Even if they do win again, the worst case would be that Spain could end up with the same situation they had two months ago,” he said. “They don’t have the power to force independence unilaterally.”

Mr Alberich said that the chastening experience for independence leaders in failing to secure their ambitions while seeing some leaders jailed and others in exile meant that an aggressive push for independence was unlikely to be repeated.

He said there will likely be pressure on the Madrid government to secure a ‘third way’ not independence, not the status quo but greater control for Catalonia over its finances and greater powers for its institutions.

The central government has said that it will restore powers to Catalonia once a law-abiding administration is in place, but questions remain whether it would want to be seen to be giving concessions to an administration that had tried to force through independence.

“There will be no immediate solution because a solution will require years and years,” said Mr Alberich. “But it’s clear they would never again break the law, the legal framework.”

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