Catalonia and Spain Enter Dangerous Uncharted Territory

Yves here. I feel a bit neglectful in not posting on Catalonia tonight, but I have a major competing blog project that is chewing up a ton of time. However, we are also in the midst of what Lambert calls an overly dynamic situation, which means the possible outcomes are very bushy (as in if you were to try to draw decision and event nodes, you get tons of possible paths very quickly).

A few observations:

What happens with the police force is key. Madrid has dismissed Catalonia’s chief of police and its director general. The chief of police was already being investigated for possible sedition charges.

The rank and file stood aside during the referendum, which led Spain to send in the Guardia Civil, which used what was widely decried as excessive force to try to shut down voting. If substantial proportions of the police force refuse to obey orders, Madrid will have an optical and practical problem on its hands.

No one knows how much support there is now for independence in Catalonia. Prior to the election and for years before that, independence never polled as a majority position. I have yet to see any polls post referendum. The high level of injuries during the election probably moved some fence sitters into the separatist camp, but how many? Moreover, even among the separatist parties, some would have been satisfied with more devolved powers, most important, Basque levels of spending autonomy, as opposed to a full divorce. But with support pre-referendum for independence at only a bit over 40%, if there were to be civil war (which per below, I see as unlikely unless Rajoy makes a bone-headed move, like sending in troops), it would seem to be at least likely to occur within Catalonia as between Catalonia and Spain.

If Madrid encounters widespread disobedience, its real nuclear weapon is the banking system. Restricting access to or shutting down the payments system in Catalonia would produce very different fault lines that the use of force to assert control. First, it doesn’t generate dramatic video clips of thuggish behavior. Second, it hits people in their wallets, often quickly. Small businesses and non-salaried workers will feel the pinch quickly.

The relatively rapid timetable for new elections appears to be intended to minimize the amount of time Spain directly rules Catalonia. Rajoy likely sees that as an effort to reassure Catalonia; it’s doubtful many of the locals will be mollified much.

Additional tidbits:

This extract suggests Catalonia won’t find any support from “international law”:

There’s been some discussion of the article, What Political Science Tells Us About the Risk of Civil War in Spain. While the historical analysis is very useful, the author appears to have mis-applied it to Catalonia, at least as of now (if Madrid becomes overly aggressive, the situation could change significantly). I still think the most likely outcome, absent undue use of physical force by Madrid, is that a radical paramilitary group or groups will emerge, as opposed to civil war level resistance.

Due to time pressure, I’m hoisting this comment from the Financial Times which debunked someone else trying to draw a comparison between Yugoslavia and Spain:

Story is completely different. Kosovo was the poorest part of Yugoslavia, inhabited mostly by Serbians and ethnic Albanians who were minority until after 1945 (before 1945 Serbians were majority in Kosovo) . After communist regime took over control of Yugoslavia (where Serbia was powerful member mostly due to its economic and military strength) sought to weaken Serbia position by favoring Albanians minority and also overlooking mass migration of Albanians from neighboring Albania to Kosovo. Most Albanians were also boycotting government institutions. By 1980-s Albanians were overwhelming majority in Kosovo and Serbs were angry as Kosovo Serbs were minority in their own land with very few real rights despite the fact that Serbia was economically helping and financing Kosovo institutions.

So, Catalonia and Kosovo and totally different stories as Catalonia is the richest part of Spain plus they are member of Europe and even if they somehow gain independence, Europe will never accept this in reality as this will open Pandora’s box in other EU members. Plus, majority of young people in Catalonia are educated and not poor which is totally opposite from young Albanians in Kosovo in 1980-s.

By Don Quijones of Spain, the UK, and Mexico, and an editor at Wolf Street. Originally published at Wolf Street

Today was one of the strangest days of my life. I woke up in a constitutional monarchy called Spain and will go to bed, the same bed, in a newly proclaimed republic. Catalonia’s impossible dream has finally come true, but it could be extremely short lived, and it could have very damaging long lasting consequences.

Spain’s Senate responded to the Catalan parliament’s declaration of independence this afternoon by ratifying the activation of Article 155 of Spain’s Constitution, the nuclear button everyone has been waiting for. This will allow the central government to take full rein of the region’s institutions and levers of power, including parliament, the police force, the exchequer (already done), public media, the Internet, the education system, and telecommunications — at least in theory.

There is no telling just yet how Mariano Rajoy’s government intends to stamp its authority on 2.5 million of the Catalans now in open rebellion, or for how long. Given the law’s ambiguity, there are few constraints on its application, but trying to subdue a region where most of the 7.5 million-strong population are hostile to the basic notion of direct rule from Madrid is going to be a tall order, especially if the EU, which refuses to recognize Catalonia, expects Rajoy’s government to bring Catalonia back into line through “the force of argument rather than the argument of force.”

The force of argument is not exactly Rajoy’s forte. In all likelihood, his government’s first act will be to try to arrest the Catalan president, Carles Puigdemont, suspend his ministers, and assume direct authority over the regional government. To do that, it will probably have to take full control of Catalonia’s regional police force, the Mossos d’Esquadra. But what if some officers resist? What if there are clashes between Mossos and members of Spain’s National Police Force or Civil Guard?

Right now, Catalonia and Spain are in very dangerous uncharted territory. Emotions are running high on both sides of the divide. There have already been calls for a general strike on Monday that could last for over a week. The goal is clear: to inflict as much harm as possible on the Spanish economy so that investors begin to question the wisdom of being exposed to Spanish assets. It’s a tactic Catalonia’s Vice President Oriol Junqueras warned of using during a speech in Brussels way back in 2013:

Given that Catalonia represents a quarter of all Spain’s fiscal revenues and that we have the means to mobilize two million people onto the streets of Catalonia, does anyone seriously believe that we are not capable of halting the Catalan economy for one week? If we did this, can you imagine what kind of impact it would have on Spanish GDP? Or what foreign creditors would suddenly think of Spanish debt and what that would mean for the risk premium of Spanish bonds?

Four years on, and this doomsday scenario has become a very real possibility. But how will today’s markets react?

If today’s response is any indication, perhaps less severely than may be expected. Spain’s benchmark index, the IBEX 35, ended Friday’s trading 1.5% lower, making it the only Western stock market to finish the day in the red. Catalonia’s second biggest bank, Banco Sabadell, which is hurriedly packing its bags for more stable pastures (Alicante and Madrid), shed 4.85% of its market cap while the region’s biggest bank, Caixabank, ended the day 2.75% lower.

So far the real blood in Spain’s economic tug of war with Catalonia is not on the bourse; it’s on the ground. Since the constitutional conflict began four weeks ago, a staggering 1,700 companies, representing an estimated 30% of Catalonia’s entire GDP, have changed their registered address from Catalonia to some other part of Spain. Some have even changed their fiscal address.

As WOLF STREET reported a couple of weeks ago, the move is only on paper — something that is not being reported as clearly as it should be in much of the Spanish and foreign press. For the moment most of the companies are not moving their operations, head office, or for that matter any of their workers. All they have done is change their legal address, and what’s more with minimal fiscal fanfare — in most of Spain (with the exception of the Basque Country and Navarre), all corporate tax is paid into the central coffers.

In the meantime, the growing boycott of Catalan goods in other parts of Spain continues to bite. So serious has it become that in a televised interview earlier this week, the former Spanish minister Josep Borell urged Spanish consumers to stop the boycott straight away because it is “destroying the economic ties” between Spain and Catalonia:

I keep receiving messages from small business owners in Catalonia whose livelihood is on the line and they say to me, ‘please stop this, it’s going to ruin us’… There’s going to be an economic fracturing of Spain if we’re not careful.

The fracturing is not just economic though. It’s political, geographic, and social. Communities and families throughout Catalonia are being torn asunder by a conflict that was wholly avoidable, had Madrid shown the slightest interest in reaching a negotiated political settlement.

This comes just when the ECB has announced that it will be paring back its bond purchases. QE pushed down the once sky-high costs of borrowing for the Spanish government, banks, and industry and has kept the economy afloat in the last five years. But if an amicable solution between Catalonia and Spain is not found — and by now, it’s hard to imagine how it can be — Spain’s fragile economic recovery could soon be at risk, and at the worst possible moment. By Don Quijones.

Independence would be “horrific” and amount to “financial suicide,” said Spain’s Economy Minister. But financial suicide for whom? Read… Catalonia’s Political Crisis Snowballs into an Economic Crisis

Print Friendly, PDF & Email


  1. Meher Baba

    Thankyou. The wikipedia page for Catalonia Independence Declaration, cites a long list of countries whom have submitted written statements supporting Spain and disavowing Catalonia. Many of the actual statements are there also. Even the US and UK. Serbias statement was careful to make mention of Kosovo and say ‘ but guys- please dont bomb Catalonia this time. It’s okay, promise!’

    1. Hayek's Heelbiter

      One request.

      Meher Baba is a historic spiritual figure, the silent India master who coined the phrase, ‘Don’t worry, be happy,” back in the 1920s. [In actual fact, the full quote was, “Do your best, then don’t worry, be happy. i will help you.” Most people conveniently elide the first sentence.]

      Meher Baba was vehemently apolitical, and time after time, warned his followers not to get involved in politics.

      Although NC Is primarily an economic website, it often covers political topics such as this one.

      To use “Meher Baba” as your nom-de-plume might very easily lead to confusion, thinking that Meher Baba himself is posting on the website and endorsing a particular view either positively or negatively.

      Please change your handle to something less ambiguous, “Meher Baba Lover / Follower / Admirer,” whatever.

      In my own case, my nom-de-guerre is “Hayek’s Heelbiter.” I can’t imagine the s*storm that would erupt should I dare post comments under the name “Friedrich Hayek.”

      Thank you.

      Hayek’s Heelbiter.

      1. Meher Baba Fan

        Yves am sensitive to my comment being off topic but felt response to genuine reqest was called for. Apologies if out of place.

      2. Jon Snow

        whatever the merits of Meher Baba (dead on 31 January 1969), even if we take at face value the claim that he is God in human form, it is hard to believe that in both of the possible cases (1 – dead or 2 – God) he would bother to post here.

        Disclaimer for people who take stuff too literally: not posted by the actual Jon Snow, who may or not be dead somewhere in Westeros

    2. Reini Urban

      Of course Kosovo is a bad comparison, Slovenia would be the proper one.
      They were also upset about Serbia leading the community, they had closest ties to the west, they were the richest, and they got signals of support from Austria. Which is the big difference there. France is still obeying the EU, and not signaling support to help Catalonia, as they did in all previous conflicts.
      All eyes on Paris now.

  2. Christopher D. Rogers

    I’m rather surprised that neither Yves or Lambert have linked into Criag Murray’s website of late with regards events in Catalonia & Spain and the EU’s response to these events. Mr Murray, for those who need to know, has been an ardent proponent of the EU for many years – indeed, he continually instructed on his Blog that all persons who voted for Brexit in the UK were racists. However, in a remarkable about face Mr Murray has now denounced the EU & actually sees it for what many on the Left actually viewed it as, which was not the cuddly teddy bear many believed it to be. Anyway, Craig’s Blog can be linked into here & his analysis is worthy of reading, particularly given Craig is an ardent Scottish Nationalist who’s grasp on recent developments deserves serious consideration:

    1. Peronella

      I second that, enthusiastically.

      Craig Murray’s analysis on Catalonia, and the EU are spot on. He is knowledgeable and insightful. Well worth reading.

    2. Strategist

      Craig Murray has just tweeted a response to Lallans Peat Worrier’s citing of the Canadian court re Quebec.

      Article 2 of the Charter of the United Nations says that peoples have the right to self determination with no qualifications on situation. The Canadian Supreme Court has no jurisdiction to make international law that self-determination only applies in colonial situations.

      The issue here is not just about the realpolitik that there is no such thing in practice as “international law”, or that it’s difficult to take on naked power and win – there is an element here of being clear that there is a moral high ground, and it is held by the Catalans.

      1. Oregoncharles

        Unfortunately, moral high ground is worth very little in a contest of power.

        Mao: “Political Power comes out of the mouth of a gun.”

        Catalonia is at the point of challenging that maxim. Fortunately, there are some restraints on Spain’s actions. I wish them both all the luck in the world – they’ll need it.

        This is major instability near the heart of the EU. Germany’s recent election is another example.

  3. David May

    I have relatives visiting from Madrid. I must ask their opinion. (Solid pijo but Atletico supporters.) I hope this does not descend into violence. Things can escalate quickly and the damage is irreversible.

    Too long a sacrifice
    Can make a stone of the heart.
    O when may it suffice?
    That is Heaven’s part, our part
    To murmur name upon name,
    As a mother names her child
    When sleep at last has come
    On limbs that had run wild.
    What is it but nightfall?
    No, no, not night but death;
    Was it needless death after all?
    For England may keep faith
    For all that is done and said.
    We know their dream; enough
    To know they dreamed and are dead;
    And what if excess of love
    Bewildered them till they died?
    I write it out in a verse –
    MacDonagh and MacBride
    And Connolly and Pearse
    Now and in time to be,
    Wherever green is worn,
    Are changed, changed utterly:
    A terrible beauty is born.

    Last verse, Easter, 1916. WB Yeats

    1. Yves Smith Post author

      I am very eager to get on the ground reports. The partisans on both sides have strong incentives to exaggerate.

      It would very much help to get a sense of how many people are simply dismayed, as in they don’t like Spain’s refusal to negotiate and its crackdown but think declaring independence is destined to backfire or for whatever reason isn’t something they are on board with. Or put it more simply: who is in the “pox on both their houses” camp, even if their sympathies lean towards one side or the other?

      1. David May

        Unfortunately we didn’t get into a deep discussion. They thought that both sides negotiated ineptly and that it, obviously, should have never reached this stage. There was no rancor, just bewilderment at the lack of political nous on both sides.

    2. Strategist

      Yes, but Madrid is not an on-the-ground report. It’s a simplification inevitably, but it’s like saying that a woman can only leave a marriage if the husband agrees. Getting views from Madrid is getting views from the husband – of course they are entitled to their view and of course they should be listened to, but holding the last word? No, I don’t think so.

      Spain’s sacred indivisibility, or whatever is written into the immediate post-Franco constitution is ultimately just so much horseshit.

      If Catalonia democratically wants to go, it is entitled to go, and it is entitled to our simple and straightforward solidarity and support to do that. To the extent that a third way of greater regional autonomy has been ruled out by intransigence, then Rajoy – who ultimately is the offspring of the Francoists – is 99% to blame for that

      The fact that “naked capitalist” and naked state power means that it could be incredibly difficult to do – if, for example, they start messing with the payments system – then that should only increase our resolve to do our level best to deny naked capitalist and naked state power the right to coerce us into whatever they decide to do to us today.

      1. Peronella

        Agree 100%.

        The abuser husband and abused wife metaphor actually works very well here.

        The previous Spanish constitutions all ensured the inviolate territorial integrity of a Spanish state that included the colonies. Cuba was only the most recent colony to disagree. Today, Catalonia is treated just like a colony and it too wants out from an extractive abussive relationship.

        1. SpainIsHot

          The “abuser husband and abused wife” metaphor is in fact horrendous (even ignoring its obnoxious sexism).

          The first obvious issue is that talking about the “abused wife who is not allowed the divorce” conveniently hides the fact that 50% (+-) does NOT want to separate, not even remotely. (And, according to most polls, the other 35% (+-) wants to re-negotiate the terms of the “marriage”, while just ~ 15% is indeed bent on independence).

          The other problem is the “abused” part. You say that “Catalonia is treated just like a colony”. Uh? Can you give one example, please? I have been living in Barcelona for 4 years and am sympathetic to some elements of the independence movement, but I dare anyone to walk the streets of this city and point to a single case of abuse, oppression, etc. There are very real grievances, and I am personally affected by some laws that the catalan Parliament passed but the spanish Constitutional Tribunal later ruled against … but to talk about “colony” and an “extractive abusive relationship”? Words completely lose their meaning that way.

          After Franco, a new Spanish constitution was voted which included the notion of “autonomies” and made explicit efforts to recognize and address the desires of different regions in Spain. If I am not mistaken, it was approved by 88% of catalans, a percentage noticeably higher than in other regions. A new, common project was started and it was vibrant and exciting (see Almodovar’s movies). Barcelona was chosen for the Olympics in ’92… there was a genuine desire, among the majority, to participate in a shared goal. And yes, I am sure that there were lots of people who always dreamt of an independent Catalunya, mostly as a utopian goal (just look at the evolution of the independentist movement in terms of numbers). In any case, one could easily argue that (PART OF) Catalunya is no longer interested in that common deal and wants to either re-negotiate it or simply drop it, that’s fine and valid. But talking about abuse, colony, fascism, etc. etc. etc. is simply not intellectually honest and makes further discussions practically impossible.

          * As readers of NC should very well know, the fact that I am responding negatively to this comment does not mean, in any way, that I support the central government’s handling of the issue … nor that I do not recognize that there’s a genuine desire to renegotiate the terms and/or separate (even if the desire were merely capricious, which it is not, you can’t simply wish it away. It must be deal with, something which the government in Madrid has refused to do over the years and now it must deal with a much more serious problem).

          1. Strategist

            In my version of the divorce metaphor, there is no need to argue over whether there has been abuse. The question is, if the wife wants a divorce, should the husband be able to forbid it?

            The fact that the virgin bride willingly entered into the marriage contract in the late 1970s with an 88% vote really doesn’t make any difference. What does she want now?

            You say: “…conveniently hides the fact that 50% (+-) does NOT want to separate, not even remotely”. Well then, it seems to me that in that case, a democratic vote should settle it. But the people who don’t want Catalonia to declare independence seem to be serially avoiding such a vote. There was a referendum. The support for no didn’t vote no, they didn’t show up. The vote in the Catalan parliament yesterday went 72-10 or something like that. The “no” MPs didn’t vote ‘no’, they didn’t show up. So where can you demonstrate you are the majority?

          2. MyLessThanPrimeBeef

            Yes, it was not what I said a while back, in connection with California secession, that a divorce could be no-fault, as it has been for many progressive decades now.

            “True, I said I loved you many times…in ’88, in 92′ and many years after. But I am leaving today. My lawyer will talk to you and your lawyer about what is legally mine.
            You have a job, with your economy. I’m employed, with my own economy. Let’s not permanently scare the children.”

          3. Peronella

            Let’s look at some real numbers instead of speculating.

            The Catalan elections of 2015
            Total votes cast, 4,130,196 = 74.95% of registered voters, considered a record turnout.

            Total votes for the 2 pro-indep parties 1,966,508 = 47.6% of total
            Total votes for the 3 unionist parties 1,608,849 = 38.9% of total
            Total for non-indep, non unionist CSQP 367,612 = 8.9%

            There were an additional 5 parties that did not meet the minimum vote threshhold so they are not reflected above.

            Fast forward two years, Oct 1, 2017 – with Int’l observers present.

            Total votes for independence 2,044,038 an increase of 77,530 over 2015, so the number of voters favoring independence went up by 4%. At Least.

            Some additional 770,000 votes were lost, taken by the police; they could not be counted. It is fair to say that some part of those votes were pro-independence and would have raised the the percent of increase even higher.

            It bears repeating, ad infinitum. If Rajoy wants us all to believe that the majority of Catalans want to remain in Spain, why not have a referendum? With the 8 point spread they wanted us to believe is in their favor, that would have settled the issue for a generation. Without those ugly pictures of Spanish police beating up peaceful Catalans trying to vote. The only rational conclusion I draw is that Rajoy’s internal polling was showing them losing the referendum by a very significant margin. Therefore they cannot allow a true election.

            Dante Fachin (Podemos Cat) said as much addressing himself to the PP and Ciudadanos during the Parlament debate last Thursday.

            And if there is a new election in December, my bet is that the independence parties will not be allowed to contest it. Madrid cannot win a clean election in Catalonia. Period.

            1. Yves Smith Post author

              The referendum makes CalPERS elections look good. There were none of the normal controls in place to prevent duplicate voting. Ballots were downloaded from the Internet. People could vote at any polling station. The results cannot be claimed to prove anything.

            2. mpalomar

              “If Rajoy wants us all to believe that the majority of Catalans want to remain in Spain, why not have a referendum?”

              I suspect Rajoy doesn’t care if Catalans want to remain in Spain. Isn’t he making the case that the option is not on the table?

              1. St Jacques

                What Rajoy believes is completely irrelevant. It is his job to defend the constitution and the state and for any Spanish government to hold such a referendum would be to break constitutional law. Quite simply it is beyond his authority to call such a referendum. The only people who have the authority to change the constitution are the Spanish people voting as a whole – it’s this funny idea called democracy – something the Catalan seperatists struggle to comprehend.

                1. mpalomar

                  That was largely my point. Though his handling of the situation has been clumsy and counterproductive or at least that’s how I perceive it.

                2. Strategist

                  This is absolutely the key point here. Your position is “I’m sorry woman, but you signed the marriage contract and there’s no way out of this marriage unless I agree.”

                  The Spanish constitution of 1978 is sacred, there’s no way out, give

                  it’s this funny idea called democracy – something the Catalan seperatists struggle to comprehend.

                  In the circumstances we observed the other week, that my friend is the comment of a complete schmuck.

                  I would repeat my plea here: although there is a place for analysis of the realpolitik, there is also a place for simple & straightforward solidarity with a people’s movement pursuing a peaceful divorce according to pacifist and democratic principles.

          4. False Solace

            > You say that “Catalonia is treated just like a colony”. Uh? Can you give one example, please?

            I guess I’m crazy because I can actually remember things that happened more than 6 months ago. My memory stretches even so far as the last financial crisis (amazing, I know. The media does its best to inflict collective amnesia on the voting public).

            After the financial crisis Spain inflicted ruthless anti-democratic austerity. Any nation that toys with austerity is playing with fire. The political elite are responsible for this crisis, they are the only ones to blame, not Catalunya, not Spaniards in general. Those who sow austerity will reap the whirlwind. This is merely another example, and yet we have people lined up expressing amazement that this has happened, and Brexit, and everything else. The centrist elites in Madrid treat everyone in the 99% as a colony. That is the problem that needs to be addressed, whether by devolution or something else.

            1. Yves Smith Post author

              Catalonia does not have its own currency. And the fact that it can’t get there from here (see our posts on Greece) makes your argument moot.

              And what proof do you have that Catalonia’s citizens wouldn’t have imposed austerity? The neoliberal ideology has been marketed very effectively and most people believe in it. I suspect the best you would have gotten is austerity lite.

              If it had had its own currency, it would be of pissant size. It would have had a currency crisis for going against the bad orthodoxy. That means it would have been subjected to an IMF program. That is actually the IMF’s traditional role, “helping” small countries that have had currency crises. So it would likely have gotten to the same place by a different means.

              1. St Jacques

                Spanish governments, including the conservative PP, have repeatedly exceeded their deficit limits since the crisis began even while loudly proclaiming their austerity credentials. I feel that they have been able to do this because Spain’s sheer size gives it bargaining power with the EU that a small country like Greece simply does not have. So your argument that Catalonia would have been worse off as a separate state looks likely, especially as it was particularly hard hit by the collapse of the property bubble.

        2. Pespi

          The ‘self-colonization’ of states by their finance sectors is what also came to my mind. If finance predation hollows out a state, if all compete against all, why not have every rich region try to break away from its poor neighbors, as happened all over Africa.

          The weakening of national identities under the EU umbrella is an interesting but possibly hoped-for, by some parties, event.

          I thought it absurd, but the point advanced by Pat Lang of Turcopolier.typepad is that a real draft is what takes a multifarious people and shapes it into a singular nation. There is a secondary benefit of preventing too many colonial adventures.

          My Swiss friends would agree, (Switzerland having 4 distinct cultural/geographical areas, french, italian, german, roman-unique derived, with mandatory service and generally a united populace. The opposite of Belgium or Spain).

          I see it as something to be for, for a better world. It wouldn’t really need to be martial, we could recreate the WPA and have people from across the country work together as a body.

  4. EoinW

    Given the mention of market reaction, I have to ask something I’ve been pondering for some time. If all markets are manipulated to prevent a decline, is it still possible to have a market crash? If we do get a crash, I wonder if it will be because those manipulating the markets chose that moment to crash them. I would hope central bankers do not have such omnipotent control over the “free” market, yet it seems they can control the optics, while the real economy crashes and burns, with only those directly effected noticing.

    Yes it’s still October. Thinking 1929 type things.

    1. jefemt

      Taleb’s Black Swan?

      Can’t help myself: The Clash- Spanish Bombs:

      Spanish songs in Andalucia
      the shooting sites in the days of ’39
      Oh, please leave, the ventana open
      Federico Lorca is dead and gone:
      bullet holes in the cemetery walls
      the black cars of the Guardia Civil
      Spanish bombs on the Costa Rica
      I’m flying in a dc-10 tonight

      Spanish bombs; yo te quiero infinito
      Yo te quiero, oh mi corazón
      Spanish bombs; yo te quiero infinito
      Yo te quiero, oh mi corazón

      Spanish weeks in my disco casino
      the freedom fighters died upon the hill
      They sang the red flag
      they wore the black one
      but after they died, it was Mockingbird Hill
      Back home, the buses went up in flashes
      the Irish tomb was drenched in blood
      Spanish bombs shatter the hotels
      My señorita’s rose was nipped in the bud

      The hillsides ring with “free the people”
      or can I hear the echo from the days of ’39
      with trenches full of poets
      the ragged army, fixing bayonets to fight the other line?
      Spanish bombs rock the province
      I’m hearing music from another time
      Spanish bombs on the Costa Brava
      I’m flying in on a dc-10 tonight

      Spanish bombs; yo te quiero infinito
      Yo te quiero, oh mi corazón
      Spanish bombs; yo te quiero infinito
      Yo te quiero, oh mi corazón
      oh mi corazón
      oh mi corazón

      Spanish songs in Andalucia:
      mandolina, oh mi corazón
      Spanish songs in Granada, oh mi corazón

    2. MyLessThanPrimeBeef

      If central banks can create as much money as they want, I believe, in theory, as a result, they can make markets go up forever, should they desire that.

      1. subgenius

        That would require markets to be only based on money.

        The forces that may crash them are far wider – nature bats last.

        1. MyLessThanPrimeBeef

          If you’re thinking the Carrington Event, or revolutions, you’re right.

          Perhaps a few other natural or man-made phenomenons as well.

  5. diptherio

    A couple of thoughts on international law. One: I don’t recall ever being given the opportunity to vote for any international legislator, so who is making these international laws and how did they get the power to do so? This “international law” business seems to me like an obvious way to impose rules without even the semblance of democratic oversight. But I am, admittedly, a bit of an anarchist.

    Second: The text in the tweet states that people only have a right to succession if they are colonized or if they don’t have any democratic way to advocate for their desires. It’s that second one that gets me. Gilens and Page showed conclusively that in the US, none of us have any meaningful say in our Federal gov’t. Only the elite’s opinions matter. Do we really think it’s that different in Spain? How legitimate or captured is the Spanish state? At what point does the existence of pseudo-democratic institutions no longer cut it, according to international law? My guess would be, never, because the laws written by people in power will of course give them the “right” to stay in power no matter what.

    The use of any force by the state, proves that what they are trying to accomplish is illegitimate. If the only way you can get people to not do what you don’t want them to do (like hold a referendum) is bash their heads in, you have no claim on legitimate authority. If you had legitimate authority, the head-bashing would be unnecessary, QED.

    1. MyLessThanPrimeBeef

      Second: The text in the tweet states that people only have a right to succession if they are colonized or if they don’t have any democratic way to advocate for their desires.


      You have a right to secede only if you don’t have ‘any democratic way to advocate for (your) desires’ (including the desire to secede)?

      To repeat this again: You can secede if you can’t democratically advocate (or declare) secession?

      That is, you can secede by undemocratic means???

      Like, maybe after World War II, you seized control of a territory and the United States immediately recognized you?

    2. WobblyTelomeres

      My guess would be, never, because the laws written by people in power will of course give them the “right” to stay in power no matter what.

      This is why I shudder every time I hear a politician declare, solemnly, “We are a nation of laws.”

      1. some lurker

        This is why I shudder every time I hear a politician declare, solemnly, “We are a nation of laws.”

        When I hear that, I remember I live in a country run by lawyers.

    3. St Jacques

      “The use of any force by the state, proves that what they are trying to accomplish is illegitimate.”

      That’s just silly Christian mumbo jumbo. As Max Weber told us, all states, no matter how constituted, are at heart about the monopoly of violence in a given territory. When the south suceeded, Abraham Lincoln resisted the heavy internal political pressures placed on him to negotiate because he correctly realised that a democracy cannot survive if people can just opt out whenever it suited them. The fact is these people broke the constitution that had been voted for in 1978 by holding a referendum that broke the country’s constitutional law. You may decry the tactics, I for one would have simply ruled the shoddily organised and dodgy referendum null and void, but that is all.

      1. MyLessThanPrimeBeef

        Diptherio is not into Christian dogmas, based on reading him over the years.

        And that’s real question about Lincoln that needs be debated – Why can’t people just opt out? Why must he preserve the union?

        1. some lurker

          And that’s real question about Lincoln that needs be debated – Why can’t people just opt out? Why must he preserve the union?

          That was what he was elected to do?

          I have wondered many times if it would have been better if Lincoln had let them go with the option of readmittance when they had forsworn slavery. Whatever the outcome, it would not have cost 600,000 lives and the ensuing 150 years of Jim Crow…

          1. MyLessThanPrimeBeef

            Like King George was crowned to preserve the empire and her colonies.

            “But those colonials want to leave, why can’t they, peacefully, your royal highness?”

      2. diptherio

        I’m more of an anarcho-syndaclist than a Christian, for the record ;) I don’t think it’s the case that “democracy” cannot survive without the option for people to opt out, but I think you and Abraham Lincoln are right that the psuedo-democracy that we have right now (and kinda always have had) couldn’t survive.

        The nation-state we (and pretty much everyone else) currently has was designed for and by elites, to serve their interests, not the interests of the masses. If you read the papers of, for instance, John Adams, you will find that his chief aim for the US Constitution was that it constrain democratic power, not to enhance it (I get the impression Franco probably felt similarly).s Our present system is now, and has always been, run for the benefit of the few at the expense of the rest of us. That system can’t be fundamentally changed through that system…the people presently in charge have seen to that quite well. Anyway, maintenance of the hierarchy is built into the structure of the system, hence the Senate (House of Lords) and President (King). There’s a reason the US’s constituion is based on that of a monarchy.

        We can have different forms of organizing ourselves that don’t involve the nation-state as presently constituted, and don’t entail total chaotic anarchy (in the negative sense) either. People can, actually, be trusted to not be animals to each other without the constant threat of some state authority hanging over their head. We do not need the state to provide us with a good life, and the state was not created to provide us with a good life in the first place. It was designed to extract as much as possible from as many as possible for the benefit of those who control it (see Gilens and Page, 2014). If people want to secede from a system that wasn’t set up for their benefit to begin with, who are we to tell them “no”? That’s Rajoy’s job.

  6. Sid_finster

    I will sum up the entire corpus of public international law in three words: “might makes right.”

    As regards Yugoslavia, the FT commentator picked the wrong country, and intentionally so.

    The better Yugoslav analogy is the departure of Slovenia, not Kosovo.

    1. Disturbed Voter

      A tragic situation created by two authoritarian-leaning leaders. Yes, do think Yugoslavia. The EU and Germany are deeply a part of this situation as well, they create tendencies toward devolution of ethnic minorities, just by being what they are … not as active conspirators. It is gravitational, but inverse. Masses are put into a tendency to pull apart rather than pull together. Statements from EU and Germany … resisting devolution … however sincere, are like the cat saying to the mouse, don’t worry, I am not hungry now. Yes, do think Greece and Cyprus.

    2. MyLessThanPrimeBeef

      Might makes right…political power from the barrel of a gun…

      Lee won the Battle of Antietam, the right to secession would have been recognized, and a peace treaty ensued, with many lives spared.

      Had Washington lost, there would have been many traitors branded as such by King George.

      Unfortunately, we are still in the Trial-By-Combat age…a method of Germanic law, where the winner of the fight was, and even today is, proclaimed to be right.

  7. StephenKMackSD

    For those interested in Catalonia, and the recent secession read ‘Abuse Of The Rule Of Law In The EU’ by Dr. Albena Azmanova at the Social Europe web site. The concluding paragraphs are instructive!

    ‘Moreover, the Spanish Constitution makes a mockery of the Rule of Law by equating it to the will of the people, as it pledges to “consolidate a State of Law which ensures the rule of law as the expression of the popular will.” The ‘popular will’ is the source of sovereignty in a democracy. The ‘rule of law’ guards individuals from the abuse of power by any power, including that of the ‘popular will’. Sourcing the rule of law from the will of the people, as does the Spanish Constitution, provides a legal basis for a dictatorship: as we Europeans know only too well, all our great dictators claimed to speak with the voice of the people.

    No, Europe is not about to fall into the abyss of Despotism, but it has taken a careless step down that slippery slope. Preventing the downgrading of the rule-of-law into a despotic rule-by-law is the business of every European citizen.’


  8. freedeomny

    I have two friends who just got back from Spain – they stayed partially in Madrid and did not travel to Catalonia. They said that the Spanish flag was Everywhere – hanging from almost every building, in windows, in stores, in the projects and low income housing to the wealthier homes. Everywhere you looked you would see the Spanish flag….

    1. Anon

      I’m not sure what to make of your friends observations. Well, sure, Spanish flags were flying in Madrid. It’s the capital city of Spain. Had they gone to Catalonia they would likely have seen different flags flying. State propaganda is not confined to the US, or Russia, or Mexico for that matter.

      Unfortunately, the Spanish propaganda isn’t working so well in Catalonia. These folks seem determined to find a new path, without Madrid. The separatists seem to be a wily lot, and this could be a long running drama (or not). In any case, the separatists seem to have a built-in encryption system: their native language is about as indecipherable to Madrid as Italian is to French.

      1. c_heale

        When I lived in Madrid (I left 5 years ago), there Spanish flag was present but it was an occasional sight (mainly on official buildings) unless there was some sporting event. If it’s present everywhere, that is significant.

    2. Dan F.

      I live in Madrid, and it is true that the Spanish flag is flying from many, many windows. It reminds me of the US after 9/11, although perhaps there are not so many flags as there were in the US.

      There is essentially no sympathy for secession outside of Catalunya. Even most of the left in Spain is quite unhappy with it, and the manner in which it has been pursued.

  9. Ned

    Radio Television España,
    is an excellent free online resource to watch videos, news programs by region, or subject, soap operas, technical programs about agriculture, (agrosphera), old movies, learn Spanish, etc.

    What’s hilarious is that the news coverage barely mention what’s happening in Catalonia except for a few utterances on hispanopoliticogobbledygook coming from the Spanish Cortes.

    Passive resistance and civil disobedience by citizens, as well as boycotts of fleeing companies is one way Catalonians can fight back. I can’t see how that would do anything but hurt the local economy as well.

    How about a new local currency? “The Cat”

    Of course that tired old saw of progressives, like Richard Wolfe, the Mondragon Cooperative, which is very democratic and succesful, but exports to the rest of Spain and Europe, Fragor washing machines, etc, might be instituted on frequent and massive level.

  10. Tony of Ca

    I truly believe the population in Catalan is far more supportive of succession than the polls you source state. According to Mish, he calculates it’s closer to 57% in favor. After Rojoy’s behavior, I’m sure it’s even higher.

      1. Yves Smith Post author

        1. As I indicated, the referendum vote is garbage. Nothing even remotely resembling normal controls of balloting in place.

        2. There were people who voted for independence who merely wanted a Basque-type deal with Madrid. That includes Puigedemont or did you miss that? The reports are widespread that he was prepared to back down and agree to early elections but he was corned by the more hard core separatists plus didn’t trusty Rajoy.

        3. I concede that a lot of people may have moved to a more forceful pro secession position post referendum, particularly as the videos of the Guardia Civil thuggery got out. But you have no proof. Your evidence is bogus. We are rigorous about evidence here and you don’t have it.

        4. Mish is vehemently anti-EU and pretty much everything he writes on Brexit and other separatist movements is thick with confirmation bias. And he’s not a pollster or an election expert (yours truly actually has done survey research professionally).

        1. urdsama

          Yves, while I do agree with your points, I cant help what but wonder what caused Rajoy to react the way he did.

          While I believe the Brexit fiasco is still fresh in the minds of EU politicians, it is hard to find a worse handling of a political situation, that most likely could have been resolved more amicably, outside of the US or UK.

          I would be interested to understand what lead Rajoy to over-react the way he did.

          1. Yves Smith Post author

            He’s been criticized for under-reacting by quite a few members of his party. Beating up on Catalans is very popular in the rest of Spain. And his moves so far have increased the power of his party, the Popular Party. So short term, his approach is a winner even though it is very risky in the long term and as we all know has the potential to blow up.

            1. Tony of Ca

              Why would Catalans want to be part of a country where the Prime Minister of the majority ethnic group poll numbers go up by beating up innocent people for participating in a peaceful protest vote? Rajoy has really managed to awaken Franco’s ghost.

              1. Dan F.

                Speaking of a “majority ethnic group” in this context is absolutely and completely ridiculous. There is no plausible ethnic distinction between residents of Catalunya and residents of the rest of Spain.

                It bears mentioning that approximately 1/6th of Catalan residents, like approximately 1/6th of all resident of Spain, were born in some other country (e.g. Morrocco, Ecuador, Ukraine, China, etc.).

        2. Peronella

          Yves, There is very little going on in regards to Catalonia that I miss. I stand by my sources and by my numbers.

          Puigdemont did indeed intend to dissolve Parliament and call for new elections on the condition that implementation of 155 would be scrapped, and phoned Rajoy accordingly. Shortly thereafter the answer came back that election or no election 155 would still be applied. With this answer, he scrapped the elections.

          Puigdemont was willing to do this (the elections) as a way to avoid the effects of 155 on the greater population, but he would have done it at great risk to himself and pay an enormous price. People in his party were resigning, and he was, as I predicted called a traitor when this decision leaked on Thursday. It was an awful day for all the pro-independence crowd. Traitor was the word heard from the crowd in St James square, when the possible elections story was known. He would have basically ended 7 years of the people’s hard work and been reviled forever.

          After Rajoy’s answer came back, Puigdemont scrapped the elections and decided to go ahead with lifting the stay on the Declaration of Independence, entrusting the Catalan Parlament to move that forward. Thursday evening there was a debate in Parlament, which lasted more than 3 hours. I watched it all. On Friday noon, the final debate, followed by the vote took place. I also watched this in its entirety.

          You ask me for my proof. As I mentioned earlier, I read Catalan sources. Catalan is my mother tongue, as is Spanish. Catalans are bilingual. I did not have to read about Puigdemont’s declaration, I just have to listen to him as he is speaking. So my source is primary. I can tell, even in other languages, which sources are trustworthy and which are not. I read extensively. I am retired and have the time. I occasionally read English sources, but for the most part, they are disappointing, incomplete or just wrong, intentionally or otherwise.

          I do not see how one can get better sources on this topic than mine. But, of course, I am at a disadvantage in that they are in Catalan, written for a Catalan readership. That does not make them invalid. I stand by them, and I stand by the numbers I quoted. They are valid and correct. On this we will forever, respectfully, disagree.

          I am glad to see that Sue is on the same wavelength that I am on.

          1. Yves Smith Post author

            You have now shifted the grounds of your argument. I took issue with the IT matter and now you focus on one issue.

            And you assume Catalan sources are the best sources. I covered the Greek crisis in 2015 intensively. The local sources needed to be read with a great deal of skepticism. The better foreign sources were far more reliable than domestic ones, provided you focused on facts and read past spin.

            I’ve seen enough of politics so as to also be skeptical of what politicians say. Maybe Rajoy said what Puidgemont says what he said. Maybe he didn’t or Puidgemont took it out of context.

            I saw a story in the English press (can’t find it now) which being pro-Brexit is weakly pro-Catalan, which says that the two sides “misunderstood” each other, which I read as Spain disputes Puidgemont’s account of the phone call and that the negotiations broke down because they didn’t trust each other.

            Having said that, I have the impression that Puigdemont is a well-meaning person who is out of his depth, which I can’t imagine that Rajoy is anything other than self-interested. But even allowing for that, Puigdemont could have wanted assurances Rajoy was not prepared to give.

            In any event, a poll by El Pais says that a majority still opposes independence. I can’t read El Pais to see how the poll was done. If it was by phone, I’d take it seriously, but if by Internet, they could screen for Catalan only IPs but still have sample bias. This is from BBC:

            A poll published by Spanish national newspaper El Pais on Saturday suggests more Catalans (52% to 43%) are in favour of the dissolution of the regional parliament and the holding of elections.

            Fifty-five per cent of Catalan respondents opposed the declaration of independence, with 41% in favour.


            1. Tony of Ca

              Are you actually going to take El Pais seriously? They are a mouth piece for the Madrid Government. They have a vested interest in the current power structure of Spain. These mainstream newspapers have lost all credibility. I seem to recall the Greek newspapers making it seem as if the Syriza referendum would be close.

              1. Yves Smith Post author

                I don’t read Spanish, but El Pais is very unlikely to conduct polls in house unless they slapped up an online poll, and as I indicated, those are known to be dodgy because you don’t have a valid sample.

                Even much bigger papers in the US contract polls out. At most they sponsor them jointly with a polling organization, which in practice means they work with the pollster on the design of the survey instrument. Media outlets lack expertise in how to weight a survey (as in how to divvy up the various demographic buckets to get a valid sample, how many people need to be polled, how to determine what the margins of error are) and they aren’t the ones to run the actual polling (you need strict adherence to reading the survey instrument as written).

                Moreover, putting out poll results that diverge widely from not-much-later polls discredits the pollster. So there are big disincentives to putting out cooked polls.

                Put it another way: the WSJ has a clear bias but its polls are as reliable as any. Ditto the NY Times.

                If you want to find bias, you look to the pollster. Rasmussen in the US is the one that runs polls that consistently skew to the right. And they do that mainly by how they structure the survey instrument (polls and survey results are very sensitive to how the questions are stated and ordered).

        3. Tony of Ca

          The referendum turn out to be very legitimate. It showed what a horrible regime permeates from Madrid. I’m sorry, sending in mask police to terrorize citizens is no a way to delegitimize a vote.

  11. Joel

    This is like Quebec all over again.

    Until the independence fervor of the 1960s, Montreal was the undisputed first city of Canada and Quebec was the leading province economically. People were understandably a little arrogant (like some Scots in their independence referendum and then some Brits in theirs) as to their economic might.

    Most of the big banks and other major employers stayed in Quebec, but *future* businesses mostly set up shop in Ontario.

    Meanwhile, thousands of English speakers fled the places where they were born, and often where their parents and grandparents had been born, taking their skills at selling to the rest of North America with them.

    By the 1990s Quebec (admittedly, partly devastated by a disastrous Olympics) was so weakened that Montreal couldn’t even support a Major League baseball team. And all that sacrifice for nothing: the political status quo is much as it was in the 1950s. Most people in Quebec just don’t want to leave Canada.

    1. MyLessThanPrimeBeef

      It seems there are always parts, regions, territories or colonies want to leave, but I can’t recall one instance of the opposite, a country wanting, voluntarily, to jettison one of its own regions/territories/etc?

      1. Joel

        @MyLessThanPrime Beef, Malaysia jettisoned Singapore, I think partly for religious and ethnic reasons, but I really don’t understand it.

        1. MyLessThanPrimeBeef

          I think Japan would have paid a good price for that.

          You can’ buy and sell humans, but you can buy and sell, say, Louisiana, with human taxpayers included.

    2. St Jacques

      This is what is happening in Catalonia. Fact is Catalonia is rich because of it’s location. Historically, Barcelona has acted as Spain’s great Mediterranean port linking it with the nearby areas of France and Northern Italy. In the 19th and 20th centuries Catalonia benefitted enormously from the economic protectionist policies designed to enourage Spain’s industrialisation and was able to lever up from its advantageous geographical location. Spanish government policies even favoured Catalan industry – Catalonia’s cotton based textile industry was assisted quite deliberately by central government policies, while Galicia’s linen industry got no help at all. Even in Franco’s time, there was massive Spanish state industrial investments in Catalonia’s auto and petro-chemical and chemical sectors. In effect, these protectionist policies and state industrial investments of the 19th and j20th centuries were in effect the rest of Spain underwriting Catalonia’s industrialisation and created the enormous disparity with the less developed regions. In more recent times Catalonia has been able to lever up from these historically acquired advantages and also its ideal position to serve the Spanish and nearby Mediterranean markets of southern France and Italy. The notion put around by Catalan seperatists that Catalonia has been treated as an economic colony is in actual contradiction to what has actually occurred historically. This separatist action, however, is going to see a rebalancing of that historic advantage to other regions as businesses cancel their future investments and redirect them to other parts of Spain, especially Madrid, given how geography is not the big advantage it once was given modern transport and communications.

      1. Anon

        Barcelona is a major port. Madrid not so much.

        Sacramento, CA may think it’s a “political hub”, but the economic power is in the ports of LA and San Francisco.

        1. Kurt Sperry

          Valencia and Algeciras, however, are both larger ports and handle significantly greater tonnages.

          1. St Jacques

            That is largely a recent phenomena. In fact way back in the fifteenth century Valencia was a much larger city that dwarfed Barcelona. All that began to change rapidly when Isabel I of Castile granted Barcelona some new trading rights. But all you will hear is endless whinging about those terrible Castilians.

    3. mpalomar

      “This is like Quebec all over again.”

      Like and not alike of course. Sovereignty referendums aside, Quebec and Canada were at specific places in relation to colonialism, former empire (the UK) and ethnicity quite unique from Catalan and Spain.

      Provincially, Quebec had passed through the dark and corrupt Duplessis period, emerging into the Quiet Revolution of the Sixties, An upheaval involving secularization, broad based education, welfare and labor reform at the same time that Canada was engaged in the culmination of a slow moving constitutional crisis, as the federal government led by Trudeau, along with the provinces and the four regions of Canada, (Ontario, Quebec, the Maritimes and the West), as well as the first nations people were all in a multi directional tug of war over repatriating and amending the constitution.

      I’m not sure what Canada and Quebec can tell us about Spain and Catalan except perhaps that Trudeau had a lighter touch than Rajoy.

    4. Some Guy

      As someone who lived in both Quebec and Ontario during the 90’s (and didn’t discern any perceptible difference in standard of living between them), this doesn’t strike me as an accurate history of Quebec.

      Both Ontario and Quebec suffered mightily in the very severe recession of the early 90’s due to a combination of the US-Canada free trade agreement and interest rates kept much too high by the central bank. Quebec responded by nearly voting for separation. Ontario responded by turfing the parties in power during the recession (both federally and provincially) for a generation. Whether by luck or by the fear instilled in the powers that be during that period, Canada hasn’t really had a recession since, so concerns about independence and autonomy have receded as they always do when times are good, or at least good enough. Canad’s debt burden is so high now that a severe recession is almost inevitable some time in the next 10 years, if that happens then we will see if enough of a reservoir of good feeling has been built up during the long period of (relative) prosperity to hold things together.

      Regardless, the status quo is very different for Quebec politically now vs. the 50’s. The province has far more power both legally and practically to control its own affairs vs. the 50’s. Canada has always been decentralized, but at this point, Quebec is just about its own country in practice if not officially. Most importantly for the (francophone) people of Quebec, the francophone majority now holds the levers of power, and key positions of influence throughout the province, which was not the case at all in the 50’s.

  12. Oregoncharles

    “Restricting access to or shutting down the payments system in Catalonia would produce very different fault lines that the use of force to assert control.”

    Isn’t that really Catalonia’s nuke? What happens when 20% of Spain’s economy suddenly shuts down? That’s the point of a general strike, after all. Mere systematic non-compliance will ultimately have the same effect. Among the payments that will be difficult: taxes to Madrid. I also wonder how much cash is washing around in Catalonia – an example of its subversive potential.

    I’m guessing that Puigdemont and the other officials will now be very hard to arrest. They’ve had plenty of time to prepare, and potentially millions of people clogging the streets. This is the situation “peronella” has been predicting. I’m wondering how much of an insider she really is – but by the same token, a grain of salt is called for.

    1. Peronella

      I am not an insider. I read extensively, in Catalan, and Spanish, and some good French newspapers, and particularly knowledgeable and insightful reporters. Watch the news when something important is happening. I am very careful with the sources, make sure they are credible. I apply critical thinking. This is an extremely important topic for me.

  13. Peronella

    Can anybody tell me if there is any national constitution in the world that explicitly, or otherwise allows for a part of their country to secede?? And provides guidelines on how to do it? I’m not aware of any.

  14. Kurt Sperry

    “If Madrid encounters widespread disobedience, its real nuclear weapon is the banking system. Restricting access to or shutting down the payments system in Catalonia would produce very different fault lines that the use of force to assert control.”

    This. My only question is, is this an unambiguously legal step for Spain to take? Is there banking law or boilerplate in the bank customers contracts individually with (all) the banks that allows the state to, in a stroke, freeze or restrict millions of accounts? Although, even if it were illegal, what realistic recourse would the bank customers really have?

    Have the Catalan separatists formulated actual hard plans for post-independence currency or banking transition? The Scottish nationalists, if I remember correctly, never really sorted any of that stuff out and it didn’t speak well of the competence of the nationalists to govern as a sovereign state.

    1. Oregoncharles

      Is there anything that actually prevents them from using Euros? I assume the ECB would object, but I wonder what they could do about it. Cutting off the payments system, as they did to Greece, would be extreme for a relatively well-off new nation.

      There is a running implication that the current world financial order essentially forbids the creation of new nations. Is that really true? At some point, we’re going to find out, because I don’t think those objections will actually stop people.

    2. Yves Smith Post author

      I discussed this at a high concept level a while ago.

      Article 155 gives Spain sweeping authority. Here is the first section:

      If an Autonomous Community does not fulfil the obligations imposed upon it by the Constitution or other laws, or acts in a way seriously prejudicing the general interests of Spain, the Government, after lodging a complaint with the President of the Autonomous Community and failing to receive satisfaction therefore, may, following approval granted by an absolute majority of the Senate, take the measures necessary in order to compel the latter forcibly to meet said obligations, or in order to protect the above-mentioned general interests.

      “The measures necessary” is a blank check.

      The Constitution trumps any contracts. And bank agreements are very one-sided anyhow, even if you could get a copy of the agreement (they pretty much never provide them) and parse the microprint. You don’t have a right to access the payment system. And I can pretty much guarantee any depositor rights are statutory and regulatory, and not a matter of contract.

      If the population or significant portions of it are arguably acting as insurrectionists, that would be the basis for sending in troops. Using the banks is merely another route. Spain could threaten Spanish banks with cancellation or suspension of banking licenses for not implementing whatever nasties it dreamed up to bring Catalonia to heel. The simplest would probably to cut off the payments system. Shut the banks, don’t restock the ATMs, and cut off every EPOS terminal that can be isolated (the latter may not be entirely possible depending on how the merchants set up their networks, but any business operating solely in Catalonia could be cut off). The other banks in the EU would fall in line even without that threat (they could be hit with massive fines at a minimum and the ECB and home country regulators would not intercede on their behalf).

      It is over my pay grade as to whether Madrid would see it as worth the trouble to deny Catalans access to banks outside Catalonia (as in if they drove across the border to get cash). The banks might say it’s too hard. And in any event, you can’t run an economy that way. Greeks were hoarding cash on a massive scale before the ECB cut them off, and it didn’t stop the country from being driven to its knees in a mere two weeks.

    3. Clive

      Most bank supply of services agreements or contracts (outside of highly specialised arrangements for mega corporations, which are bespoke and very few in number, comparatively speaking) in any jurisdiction you care to mention gives the bank broad latitude for amending or ending the arrangements. Spanish banks would have plenty of contractual wriggle room for suspending or cancelling contracts. Using the account for money transmission to “rogue states” or “for illegal purposes” are boilerplate terms and certain to be written into Spanish banks’ Terms and Conditions for operating a bank account or a credit card product.

      And the Card Networks (Visa, Mastercard, American Express etc.) have explicit, highly generalised and vigorously enforced terms about damaging their brands. This includes failing to comply with prevailing national laws and regulations. They know exactly where the terminals (EPoS, ATM…) using their brands are located and could pull the plug on them in an instant, leaving them effectively isolated.

      Catalan “national” banks (those in the not-legally-caretain “independent” Catalan nation geographically) could use their own systems to route “house” credits and debits to ATMs, other banks and so on. This would include house debit cards (ones they issue). But they risk not complying with the card schemes rules and losing the ability to access card scheme payment routing facilities if the card schemes pulled the plug. It would be, at the very best, a highly fragmented and confusing situation for ordinary citizens.

      1. Kurt Sperry

        Thank you Clive for the good answer. When was the last time ATMs and banking were shut down in a country or region for purely political reasons? It wouldn’t take many instances of this to cause widespread public mistrust in the system or to even precipitate bank runs I reckon.

  15. Matthew G. Saroff

    My take is that the only thing that could create a viable movement for secession in Catalonia would be a gross overreaction by Madrid.

    Rajoy’s entire political career has been dominating baiting the Catalans and the Basque.

    As such he is the single figure most likely to f%$# up the response by Madrid.

    1. Dan F.

      Rajoy’s entire political career has been dominating baiting the Catalans and the Basque.

      This phrase is simply inaccurate. ETA had effectively disbanded prior to Rajoy assuming power, and the situation in Euskadi has at no moment been a principal political issue during his tenure.

      Rajoy’s tenure has been dominated by the issue of corruption, principally – the corruption of the Partido Popular in Valencia, Madrid, and at the national level – the corruption of the CIU (Pujol, Mas) in Catalunya – and the scandal of the EREs in Andalucia. The 15-M movement and the subsequent political cataclysm called Podemos/Ciudadanos and the concomitant collapse of the PSOE were the main political responses. The Catalan independence movement has been incubating for a long time, the first real troubles beginning with the failure of the Estatut from the Zapatero era, but Rajoy has done little directly to stoke it, or, rather, little that he hasn’t done in the rest of Spain.

      Rajoy’s political posture is inaction and hiding from responsibility. He is a conservative in the most old-fashioned sense, happiest when nothing is happening and everyone does what they are told.

      Most of the complaints made in Catalunya are made equally in the rest of Spain. What is different is that in the rest of Spain there is no utopian solution even possible to contemplate, and no one proposes declaring independence as a way of correcting corrupt governance and austerity.

  16. RBHoughton

    We Brits chose confrontation in Northern Ireland. Instead of accommodation, we preferred inflexibility. We are still paying the price for that – GBP 100m for each DUP MP last month.

    It is my suspicion that the political classes will always resist inconvenience. In Rajoy’s case its the inconvenience of working through all the changes necessary to accommodate Catalonia’s wishes. It seems to be a rule of politics that the ideal situation is perpetually unchanging.

    1. some lurker

      It is my suspicion that the political classes will always resist inconvenience. In Rajoy’s case its the inconvenience of working through all the changes necessary to accommodate Catalonia’s wishes. It seems to be a rule of politics that the ideal situation is perpetually unchanging.

      Wasn’t that MLK’s argument about the white moderate, that they value order over justice and are not reliable allies?

  17. Sue

    The Spanish Government propaganda, through the structures and instruments of the State spreads, nationally and internationally, all sorts of falsehoods. One thing Spanish Government politicians cannot stand-hence their numerous revengeful actions and antidemocratic violations of their own laws- is that after months chasing ballot papers and boxes and after the deployment of thousands of police units from all over Spain, they failed to stop the referendum. The referendum took place under fair guarantees notwithstanding the physical and psychological threats to the heroic voters’ well-being. Let’s see some some of all the myths about the referendum disseminated by the Spanish Government’s Machinery:

    1. People could vote at any polling station, therefore people could vote more than once. This is an erroneous logic, a fallacious “this ergo that”, which did not match what really took place on Oct 1st. The possibility for voters to cast their votes at any polling station (this technique is called “universal voting”) was part of an strategy to circumvent Spanish Government’s repression against Catalan voters. Since police could go , shut down and hit voters with the truncheons at/to some polling stations but not at/to all of them, the universal voting method allowed voters to cast their votes at the nearest location where there was not the police repressive hindrance. Think about it. I, myself voted for Bernie at the last Democratic California primaries. I did so on-line, 35 miles away from my residence using my friend’s home pc. Did that void my vote? No, as I received electronic confirmation as to the validity of it afterwards. Once again, here in the US, as elsewhere, we mainly receive the propaganda from the Spanish Government and base our conclusions from it. It does suffice to scrutinize President Rajoy’s statements to unveil the truth his lies do hide. I quote from Mr. Rajoy: (some people voted several times because) “some towns had more votes cast than people in the census listed for those towns” Now, if one looks at a Catalonia’s map with the Oct 1st polling stations, one can clearly see that those towns which fall into Rajoy’s alleged case scenarios, are located near the ones where voting had been made impossible by the repressive policing. This is because voters wisely and fairly used the universal voting procedure and went to the open, working and safe polling station nearest to their regular one. The key point is that the electronic and supervisory voting safeguards had been put in place. As my on-site reporters on Oct 1st confirmed, when Guardia Civil and National Police disabled the electronic and supervisory safeguards at one particular polling station, the own Catalan citizens’ crew assigned to it closed it down

    1. Sue

      2. Another myth about the Oct 1st referendum. “A few people did not use the paper ballots available at the polling stations and this tainted election’s integrity”. This would question many of our own elections in the US. I had cast my vote in the past by mail, therefore not using the paper ballots available at the polling stations. I did cast my vote years ago using a blank copy of other’s people’s paper ballot. What counts is that the wording, options, format etc. of the paper ballots are the same as the original sample.

      1. Yves Smith Post author

        Stop this. You don’t know what you are talking about.

        The replacement ballots were printed out over the Internet, with no controls. You have no proof it was a few people; in fact there are many press reports of people going to other poling stations and proudly reporting to the press and on social media how they overcame the obstacles imposed by “Spain and still voted.

        Abesentee ballots are provided by the governmental body running the election, and not printed out by citizens. Each envelope has a bar code on it so as to verify that the voter was entitled to vote. Each bar code identifies the voter uniquely. Once the envelope is verified against who actually voted in person at the polling stations (to prevent someone voting in person who had also voted by mail), then the absentee ballot envelopes are opened, the ballots are separated from the envelopes to assure confidentiality of the vote, and the votes are counted.

        If you keep this sort of garbage up you will be banned. You have been called out repeatedly for providing false information. As I said below, while I would very much like to hear pro-separatist arguments, we have written site Policies that explicitly prohibit agnotology and other forms of making stuff up.

    2. Yves Smith Post author

      Making stuff up is against site rules. Stop bullshitting.

      Catalonia did not plan its election originally to allow for voting at any polling station. That is one reason the seizure of the ballot boxes was a significant intervention by Spain and widely reported as such. In any properly-run election, the control of the ballot (putting them in ballot boxes after the voter is validated as being registered to vote and procedures set up to allow for only one vote per voter.

      It is simply heard of to allow voters to print out ballots and go willy-nilly to polling stations. This procedure was made up shortly before the referendum with no controls in place. I can assure you there were no controls because it would take a minimum of months to develop the procedures, codify them, and train poll workers. The fact that this could be done in theory does not mean it is what happened. Your “universal voting argument is dishonest and you ought to know that.

      I would like to have a pro-secession position represented, but I have zero tolerance for misrepresentation. If you do not clean up your comments, you will not be welcome her. Sue below has also repeatedly made comments about historical and recent events that have been shown to be flagrantly false.

      Allowing ballots without any controls of how many ballots could be submitted is an invalid election procedure. Your efforts to defend an election whose results are not reliable shows that you are deeply partisan and not prepared to deal with uncomfortable truths.

      Moreover, you also ignore that the pro-Spain voters for the most part boycotted the election.

      1. urdsama

        While I also have concerns with the voting as you describe, I don’t feel the non-voters are a valid issue. If people who were in the “no” camp chose to not vote, they only hurt their own cause.

        It’s like proving a negative. We can speculate all we want about how they would have voted, but we have no proof.

        Concerns about online and printed voting are valid concerns; this is not one of them.

        1. Yves Smith Post author

          Not if you believe the election was illegal to begin with. I don’t mean to sound like I am defending Spain, but the election had been declared unconstitutional. So why would someone who was pro-Spain validate an unconstitutional election by voting? It makes no sense.

          And polls pre-election showed that only a minority approved of a referendum if Spain opposed it.

          1. urdsama

            Perhaps, but it also makes it impossible to know what the outcome would have been. Also, I don’t think going by pre-election polls is useful because that was before the violent crackdown on voters.

            It’s a classic authoritarian win-win for the Spanish government. Don’t vote in this illegal election. Oh, the vote is useless as an indicator of the “will of the people” because so many didn’t vote.

            I’m fine with finding issues with internet voting and printed ballots. But at some point people have to be responsible for their own self interests. If they failed to vote, regardless of the government position on the legality of the election, that is on them. I’m not going to look at what people might have done.

            1. Yves Smith Post author

              I don’t agree. A significant number of people didn’t vote in the CalPERS election merely because their vote was not secret (participation was markedly down when for multiple reasons it should otherwise have been higher). If I had been pro-Spain in Catalonia, I would not have voted in an election that was declared to be unconstitutional. I don’t see why you doh’t understand that that is an entirely reasonable position, and also supported the intended aim of undermining the credibility of the election.

              Secession has not polled as a majority position in years (maybe ever) and has been declining in popularity. As I said, only a faction within Puigdemot’s coalition actually wanted to secede. Many just wanted more devolved powers.

              We need more current polls, as I keep saying. While it is reasonable to infer that the headbreaking by Madrid increased support for secession, we don’t know that for sure and even then we don’t know by how much. About half of Catalonia is opposed to secession and I doubt that most of them would be moved. A divided population is a lousy foundation for secession. The internal fights will be every bit as brutal as the external ones.

              1. urdsama

                But the CalPERS vote is hardly of the same magnitude and the circumstance are wildly different, so I don’t feel it is a good analogy.

                But as far as the unconstitutionality, this was clearly a stance taken by Rajoy, who as you previously said, was under pressure for appearing too lenient. If I was pro-Spain I would have voted to make sure people knew my position.

                In such situations, reasonableness does not enter into it. If those who polled “no” had actually voted and the vote conformed to previous polls, it would have taken most of, if not all, the wind out of the secession movement. As it is, the current situation is a complete mess.

                Following the directives of the state is not necessarily the best way to go. Sadly, I think people forget that in day to day instances, the state cares little for the want and needs of each individual.

                I often think Leviathan and The Prince should be required for everyone…especially those in democracies.

                1. vlade

                  You’re making projections (“If I was pro-Spain …”). That’s all they are, projections.

                  The point Yves is desperately trying to make is that the independence ballot does not convey any in-depth information on the stances of the population (all it conveys is that yes, there’s a substantial number of pro-indepenence people, but that’s about it. How substantial the substantial number is, we don’t know anymore).

                  Any other information is guessing, likely based on biases of the guesser.

                  It’s hard to run a good poll at the best of times. Physical ballots tends to be the safest, and even those can be stuffed. More importantly, even counting physical ballots is pretty damn hard – you almost never get two recounts that would end up with the same number of votes.

                  A vote where anyone can print the ballot at home is by definition suspect, even if the polling places were the most serene of places, which in this cases they weren’t.

                  As someone else said in some other comments – the real question now is how well the Dec elections will be run. If they will be well run (by international standards), and outspokenly pro-independence parties get majority in a reasonable turnout, then yes, then we can talk again.

                  Before that, it’s all wishful thinking.

                  1. urdsama

                    But Yves is also making projections (“If I had been pro-Spain in Catalonia…”); so your criticism applies equally to both on this point.

                    And the argument I’m trying to make is that this situation could have been easily manged as to avoid the current impasse, or at the very least, diffuse it somewhat. As it is, this has the potential to be Basque like situation, even if it doesn’t have the long standing history and ethnic issues behind it.

                    The polls before the violent crackdowns are not terribly useful. I agree with your next to last paragraph, but taking a position that the secessionists may have a majority now is hardly wishful thinking, any more than taking the position that the pro-Spain camp is in the majority.

                    We have no good data at this point to know what the current mood of the majority is.

                    1. Joel

                      She was not making projections like “If I were Pro Spain…” she is reporting what the actual pro-Spain (non-)voters said.

          2. Tony of Ca

            Why would Catalans want to be part of a country where the Prime Minister of the majority ethnic group poll numbers go up by beating up innocent people for participating in a peaceful protest vote? Rajoy has really managed to awaken Franco’s ghost.

  18. Peronella

    Yves, I respectfully disagree.

    The irregularities stem mostly from police interference. This is from Vilaweb, Vicent Partal’s paper. It is an interview with one of the team of “hackers” who made universal census possible and secure, in order to enable people whose ballot places had been shut (about 400 of them) to vote elsewhere. The article is in English.

    This paragraph answers the multiple votes issues:

    “What would you say to those who claim that it was possible to vote twice?
    —It’s untrue. With the universal census it’s simply not possible, in any way. I heard those statements by Mr. Ferreras, on Spain’s La Sexta TV, saying that it was possible to vote several times, and I laughed. I myself was part of the group of people in charge of making sure, specifically, that this wasn’t possible. It’s true, I laughed because I had no strength left for anything more than a smile, after working thirty hours straight.”

    Sexta TV, and Mr. Ferreras would be something on the level of Fox News at its worst.

    The voter verification was done via mobile – cell phone, and it was strict. I do not know if there were any computers. I did not see them in the videos I watched, but I did not see every last polling place. I did see stacks of ballots, however. There were transmission issues as Madrid kept hacking into the Generalitat’s IT systems, and that slowed down the process. But, the people whose votes were taken by the police were NOT allowed to vote again. I wish they had been able to, but they were not, and I grudgingly understand why.

    There were 33 int’l observers travelling from polling place to polling place. At the end of the day they gave a verbal summary of what they saw, and the only irregularity they mentioned were the police and the IT connections failing from time to time. The actual hard copy report may already be out. I haven’t felt the need to read it, but I can try to find it if you wish.

    As far as printing the ballot at home, downloading it from the internet, I thought that was a great option when the police had made off with some 10 million ballots. But it was about a week before the voting. Still, a few days before the vote, to allay fears among older voters at least, Puigdemont, who is a Twitter adept, ran a video of the ballots being printed, in a machine that it later came out was located in Catalunya Nord, which is in that part of southern France that was part of Catalunya before the Count of Olivares decided, without consulting the Catalans who lived there to cede it to France in 1659, in exchange for keeping the Low Countries, which they lost any way later. My point is that there are close ties between the two Catalonias, and it was also great to have these ballots printed across the border away from the Spanish police. They were brought across the border into Spain by individuals who stored them in their homes, and via social media knew when the coast was clear for delivery.

    What are my sources? I read 6 Catalan language newspapers every day. I also read some Spanish language commentators whom I know “get it”. People like Ramon Cotarelo and Suso de Toro When important events happen, I try to see if I can get them on the internet. I can get Catalan TV I can see Parlamentary debates in full. I even watch Catalan political satire !! All on this on the computer. Because I am retired, and because I am interested, for very personal reasons, I make the time to do this. When in doubt, I pick up the phone and call my cousins for clarification. And also, because Catalunya is going through some interesting times. What is happening now is what my parents could only dream about, and they are long gone. I am the last living member of my family, and this is very important to me. In a sense, I am seeing it, as a way of paying them homage.

    1. Yves Smith Post author

      The fact that the police were successful in making the election invalid and unreliable does not make the election reliable. I can’t believe you are trying to make this argument.

      And the claims of your local paper are nonsense. I’ve had CIOs as clients and know how long it takes to do IT projects of any scale, as well as implement the related procedures at polling stations. Even with a census, how do you establish the person is the person in the census? What ID is valid? And how in real time do you register that someone has voted? This could not have been done in the required time frame nor could it have been done in secret because poll workers would need instructions. If you’ve ever had any experience with elections, poll workers get training before they administer an election.

      Moreover, systems like this are not secure. There is still no one in the world who has a reliable Internet-based voting system. I happen to be current on this topic because CalPERS tried using the system of the supposed top player in the world in this space despite the fact that Internet based-voting is illegal in California (which is what this amounts to, the critical step of voter validation takes place over the Web and not via either pre-set ballot controls and later validation or controls at each polling station).

      There have been literally tons of articles written about this since at least 2012 in venues like the MIT Technology Review. There have been companies who have been trying to do what your little article says these hackers did, with years of effort, significant funding and top IT professionals, and they can’t do it and they’ve been laughed at in the media for saying they can. So I must stress that that article is nonsense.

      And that’s before you get to the other big problem, that for the most part, people who opposed the referendum boycotted it. They agreed with the Spanish position that the referendum was illegal.

      And as I said repeatedly, if we had current polls we’d have an answer as to where sentiment in Catalonia now lies. We don’t. Trying to use unreliable election results as a proxy does not cut it.

    2. Clive

      I find it rather ironic that appeals to the EU to “do something” are so often trotted out by those supporting Catalan independence (the merits of which I am as neutral as I can be) when the EU has in actuality done a great deal in terms of policy making and enforcement. Specifically, the things it has done are extremely well reasoned, comprehensive in their documentation and dissemination to member states and the people who reside in the EU and have been consistently stated and applied for decades. Unfortunately, they do not help or support the actions which the government of Catalonia has taken one jot.

      The ECHR has, as is usually the case with EU law and regulations, copiously and carefully explained the standards it expects to be followed in respect of its Article 3 (“The Right to Free Elections”).

      If you’ll permit me the liberty, I’ll quote at length and invite you and readers to do a compare-and-contrast to what you are suggesting in terms of how an election could and should be run and what the ECHR says is a suitable standard which it expects to be followed:

      … election phases must be surrounded by precise procedural safeguards; the process must be transparent and open, and observers from all parties must be allowed to participate, including opposition representatives…

      …the Court found there had been a violation of Article 3 of Protocol No. 1 for the following reasons: the applicants have presented, both to the domestic authorities and to the Court, an arguable claim that the fairness of the elections had been seriously compromised by the procedure in which the votes had been recounted. Such irregularities could lead to gross distortion of the voters’ intent in all the constituencies concerned. But the applicants had not had their complaints about the recount process effectively examined by the domestic authorities, i.e. the electoral commissions, the public prosecutor, the commission of inquiry or the courts.

      (emphasis mine)

      In other words, the ECHR took a very dim of the fact that a party had declared, unilaterally, itself to be “wronged” but had not even attempted to get the national electoral standards body to investigate.

      The Catalan government had a grievance about the election. It may have even been a genuine and legitimate grievance. But rather than — as any complainant has to show if they are to establish a claim — make appeals and requests to have things put right and give the opportunity for the national government to make amends (even if it had little confidence in this happening) it simply carried on and ended up using an electoral process entirely of its own devising which would have, had it had the nerve to take it to the ECHR, simply got thrown out on the basis of its manifest failings. And not giving the Spanish national government a chance to put things right.

      You do not gain the legal, moral, eithical or propaganda high ground by doing dumb things in dumb ways (like how the electoral process in Catalonia was run — which degenerated into “making it up as they went along”). If you do, you end up turning even potential allies (such as the ECHR) against you.

  19. Tony of Ca

    Why would Catalans want to be part of a country where the Prime Minister of the majority ethnic group poll numbers go up by beating up innocent people for participating in a peaceful protest vote? Rajoy has really managed to awaken Franco’s ghost.

  20. Tony of Ca

    Are you actually going to take El Pais seriously? They are a mouth piece for the Madrid Government. They have a vested interest in the current power structure of Spain. These mainstream newspapers have lost all credibility. I seem to recall the Greek newspapers making it seem as if the Syriza referendum would be close.

  21. Strategist

    Peronella says:

    It bears repeating, ad infinitum. If Rajoy wants us all to believe that the majority of Catalans want to remain in Spain, why not have a referendum? With the 8 point spread they wanted us to believe is in their favor, that would have settled the issue for a generation. Without those ugly pictures of Spanish police beating up peaceful Catalans trying to vote. The only rational conclusion I draw is that Rajoy’s internal polling was showing them losing the referendum by a very significant margin. Therefore they cannot allow a true election…. And if there is a new election in December, my bet is that the independence parties will not be allowed to contest it. Madrid cannot win a clean election in Catalonia. Period.

    This is the vital question going forward: how can we trust the elections called for December? I’d like to see Naked Capitalism monitoring this issue, with its usual laser-like focus.

    Instead of fighting sterile battles about whether the referendum that was wrecked by the Spanish state returned a credible result, let’s see what result the December elections return, and then democratically abide by it. But this means that the election in December has to be clean and impartial, and there is a role for the “international community” here. The Spanish state has zero credibility with the separatists as an impartial and disinterested organiser of this election; the Catalan Generalitat likewise with the unionists. So there can only be a democratic solution to this impasse if a third party organises or supervises the election: this could be the EU, the UN or somebody with no dog in this fight (I dunno, the Australians??) That’s what we should push for now.

  22. Kiers

    What is the MONEY angle for Catalonia? How do they gain from independence? Can’t seem to find that discussed anywhere!

    Also, what are the odds the UK and US are stoking Puigdemont on (albeit perhaps under the table)?

  23. Bertran

    I’m an independence supporter.
    We know we dont’t have any international support and we are not oblivious to the fact that we need it.
    The catalans are a demographical minority among spanish population. Regardless of what we decide, we are always forced to accept the rest of the sate’s decisions, that basically relies on the two major spanish parties (PP and PSOE). Both parties are clearly opposed to make any referendum to know what the real catalan position is and also both agree the use of force and threat to silent us. Both parties have no significant support on our Parliament and both have used and stirred anticatalan feeling all over the rest of the country to get more votes.
    Their problem is that we are not afraid anymore, we are not going to be silent anymore and we are not going to accept their rules anymore. Our common problem is that we all, pro-independance and against independence, need for a legal referendum to count us and act according to the result. That is exactly what we were asking for since 2006 and what we tried to do on October the first (under the spanish state violent repression).
    We won’t retreat and we’ll keep pacefully disobeing spanish rules that aimed to get rid off our democratically elected Parliament until they understand that we are not going to disappear just because the deny our existence.
    Many thanks to all the people that look at this and take position, because at least that prooves that we exist.

Comments are closed.