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Abu Dhabi, UAESunday 16 December 2018

Spain’s third largest bank heads business exodus out of Catalonia

Caixabank is the latest organisation to shift its operations amid concerns that an independent Catalonia would be kicked out of the eurozone

The logo of Spanish lender Caixabank, which is relocating outside of Catalonia because of the push for secession. (AP Photo/Manu Fernandez)
The logo of Spanish lender Caixabank, which is relocating outside of Catalonia because of the push for secession. (AP Photo/Manu Fernandez)

Spain’s third largest bank will move its base outside of Catalonia in the latest blow to the region’s government before a potential declaration of independence next week.

Caixabank will shift its headquarters from Barcelona to the eastern city of Valencia, the latest big business to move to ensure that it remains within the eurozone in the event of independence.

In a statement, the bank said the reason for the relocation was to "completely safeguard the legal and regulatory framework substantial for its activity" and to remain under the supervision of the European Central Bank. The European Union says an independent Catalonia would be kicked out of the 28-nation bloc and forced to stop using the euro.

At least another six companies, including another major lender Banco Sabadell, have moved or agreed to shift from Catalonia because of concerns over the implications of declaration of independence. Two companies who announced their plans to relocate have seen their share price surge.

Separatist leaders have vowed to call independence next week, despite the opposition of central government and monarchy which have condemned the move as illegal and an attack on the unity of Spain.

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The increasingly bitter dispute followed last Sunday’s chaotic vote in which 90 per cent of voters backed independence, according to the regional government. The secessionist vote was based on a turnout of just 43 percent of the region's 5.3 million eligible voters amid strong police pressure to shut down the vote.

Madrid has vowed to prevent the secession of the country’s richest region, which has agitated for greater autonomy throughout the history of modern Spain with long-standing linguistic, economic and political frictions with the central government.

It has introduced a series of measures this week to stymie the want away government’s ambitions, including making it easier for businesses to move their headquarters outside of the region. The measure allows executives to bypass the wishes of shareholders to impose their decision.

Spain's economy minister Luis de Guindos said: "This is the result of an irresponsible policy that is causing uneasiness in the business community."

The government’s representative in the region has apologised to people injured during police efforts to stop the referendum, seen as an attempt to placate Catalans who have taken to the streets to protest the violence. Some 900 people were treated for their injuries, according to the regional government.

The government of Spain's conservative Prime Minister Mariano Rajoy has, however, rejected any negotiations unless the separatists drop their secession bid.