by Mish

Prime minister Mariano Rajoy said there would be no Catalonia independence referendum. He lied. Despite sending in 10,000 troops to stop the referendum, there was a vote and it was 90% in favor of kissing Spain goodbye.

On Thursday, the Spanish Court Blocked the Catalan Parliament from Declaring Independence. Wanna bet?

Spain’s constitutional court has moved to stop the Catalan government making a unilateral declaration of independence by suspending the regional parliament session in which the results of Sunday’s referendum were due to be discussed.
The court warned that any session carried out in defiance of its ban would be “null”, and added that the parliament’s leaders could face criminal action if they ignored the court order.
The Madrid government has refused to rule out invoking article 155 of the constitution. The article, which has never been used, makes provision for the central government to step in and take control of an autonomous region if it “does not fulfill the obligations imposed upon it by the constitution or other laws, or acts in a way that is seriously prejudicial to the general interest of Spain”.
However, given the heightened tensions in Catalonia and the huge protests seen across the region this week, the move could prove counterproductive, and Puigdemont has already warned that the triggering of the article would be the Spanish government’s “ultimate mistake”.

Catalonia ‘Civil War’

The Telegraph reports Catalonia ‘civil war’ warning as independence declaration fears grow.

The EU’s budget commissioner has warned of the risk of “civil war” in Catalonia, as fears grew over a looming independence declaration and major banks prepared to relocate their headquarters.
As another day passed with no sign of dialogue and pro-independence parties pushed for the declaration of a Catalan Republic as early as Monday, Gunther Oettinger, the budget commissioner, urged the two sides to talk.
“The situation is very, very disturbing. A civil war is planned in the middle of Europe,” Mr. Oettinger said in Munich.

Bank Attack

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Reuters reports Spain to make it easier for firms to move base from Catalonia as business alarm deepens.

Spain’s government will issue a decree on Friday making it easier for firms to transfer their legal base out of Catalonia, two sources said, in a move that could deal a serious blow to the region’s finances as it considers declaring independence.
The decree is tailor-made for Spanish lender Caixabank, sources familiar with the matter said, as it would make it possible for the bank to transfer its legal and tax base to another location without having to hold a shareholders’ meeting as stated in its statutes.
“The government is working on changing the law so that it’s no longer need to have a shareholders’ meeting, which would delay a change of the legal base in a case of emergency,” one of the sources said.
The board of Caixabank will meet on Friday to study a possible transfer of its legal base away from Catalonia due to the political uncertainty in the region, a source familiar with the situation said.
Caixabank is Catalonia’s biggest company by market value and accounts for around 50 percent of the region’s banking sector.
Another Catalonia-based bank, Sabadell, Spain’s fifth-biggest lender, decided on Thursday to move its base from Catalonia to Alicante, on Spain’s eastern coast.

Early next week, it’s highly likely Catalonia will tell Rajoy and the Spanish court where to go.

Then what?

10,000 troops could not stop a vote. Will Spain send in 100,000 troops? Block all the banks?

In regards to the latter question, Eurointelligence notes a paradox.

“A bank domiciled in a Catalonia whose independence is not recognized would remain, for all legal purposes, within the territory of the monetary union, and the Bank of Spain and ECB could be in violation of the law if they denied it liquidity.”

Stay tuned.

Mike “Mish” Shedlock

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