Rajoy Goes Nuclear on Catalonia’s Separatists, Seeks Suspension of Autonomy, National Takeover of Local Police and Public Broadcasting; Political and Economic Risk High

Spanish Prime Minister Mariano Rajoy had signaled he intended to deal forcefully with Catalonia’s independence movement. When regional president Carles Puigdemont ignored Rajoy’s demands to withdraw his coalition’s suspended declaration of independence, Rajoy scheduled an emergency meeting with his cabinet on Saturday. Even though many expected he would hit the red button of using Article 155, almost no commentator expected Rajoy to move as aggressively he indicated he would on Saturday. Even if you take a dim view of the ham-handed moves of the separatists, this is a Franco-style crackdown. Stirring those memories is going to make this Constitutional crisis even more charged than it would have been. As the Financial Times summed it up:

The Spanish prime minister will sack the entire Catalan government and call new regional elections within six months in an extreme move set to crush the regional independence movement.

From the Guardian:

Pending almost certain approval in the senate on Friday, direct rule will be imposed next weekend. Citing the Catalan government’s “conscious and systematic rebellion and disobedience”, Rajoy said Carles Puigdemont’s government would be stripped of its powers and its functions would be assumed by the relevant ministries in Madrid.

The Catalan president will not be empowered to call elections, which Rajoy said he hoped would be held within six months. “We are not ending Catalan autonomy but we are relieving of their duties those who have acted outside the law,” he said. He did not go into details of how article 155 would be applied but a government statement said: “A series of measures will be introduced regarding sensitive issues such as security and public order, financial management, taxation, the budget and telecommunications.”

Not that the government in Catalonia has a forum in which it could get a fair hearing, but earlier commentators reading of the scope of Article 155 argued that some of the measures Rajoy intends to take go beyond what Article 155 allows. The article allows central government to employ “necessary methods” to force a regional government to comply with the Constitution and protect the interests of Spain. The only route mentioned explicitly is that the national government can direct “all authorities” of the rebellious region. From Aljazeera:

Josep Costa, a professor of political science at Barcelona’s Universitat Pompeu Fabra, told Al Jazeera: “The Spanish government really didn’t have a plan to proceed with 155, so there’s a lot of uncertainty as to what can be done and what can’t.”

Costa claims he has seen many proposals, such as the creation of an interim government to run Catalonia, that are “clearly not possible” under 155.

“There’s no doubt [Article 155] has limits … including the Catalan statute of autonomy, which cannot be repealed,” Costa said.

In other words, not that such niceties matter (Spanish judicial independence is #58. below Saudi Arabia and Rwanda), but it appears that having Madrid push aside the Catalonian government, as opposed to tell its various administrative offices what to do, doesn’t look kosher. Note that Rajoy does seem attentive to some of these issues; in his address, he claimed that Catalonia’s self government was not being suspended. It’s hard to take that at face value when Madrid has almost entirely taken control of the spending If it walks like a duck and quacks like a duck..

Needless to say, Puigdemont rejected Rajoy’s plans and vowed to fight on. From the BBC:

Catalan leader Carles Puigdemont says Catalonia will not accept Madrid’s plan to impose direct rule on the region.

He described it as the worst attack on Catalonia’s institutions since General Franco’s 1939-1975 dictatorship, under which regional autonomy was dissolved.

Spanish PM Mariano Rajoy’s plans include the removal of Catalonia’s leaders and curbs on its parliament….

He said he would call for a session in the Catalan parliament to debate a response to Mr Rajoy’s plans.

Addressing European citizens in English, he added that the European Union’s founding values were “at risk in Catalonia”.

While the government in Madrid clearly has the means and the will to put down the separatists in the short term, the question is at what cost? Things to watch:

Will the local police refuse to comply? If the police do not cooperate with Madrid, it will be well nigh impossible for Madrid to exercise control. It can’t readily or quickly replace most of these officers. The police don’t need to go into confrontation, they can just act like incompetent bureaucrats: go passive aggressive and ask for orders to be explained multiple times, drag their feet, make openly lame excuses for why they didn’t do what they were told to do.

I have no idea where the loyalties of the rank and file police lie, and reader input would be extremely helpful. Catalonia’s police refused to participate in Spain’s campaign to prevent the referendum, when the Guardia Civil first made raids to seize ballots and ballot boxes, as well as arresting some officials, and the second, high-profile effort to prevent citizens from voting. That does not mean that all or even many police backed the independence movement, merely that they decided to take a hands off position. The chief of Barcelona’s police force, who supports the secessionists, is popular locally and threats to arrest him may backfire If the police again stand aside, this would make maintaining order more difficult and would undermine appearances of legitimacy within Catalonia.

How will Madrid enforce its will on cities and towns? Note that two-thirds of the mayors defied the Spanish government to support the referendum.

How many citizens will give visible support to the separatists? This isn’t just a matter of how large the initial rallies against Rajoy’s planned takeover are, although the press reported today that with no advance planning. 450,000 rallied in Barcelona. It’s a matter if enough people are willing to engage in civil disobedience that it’s impossible for the police to jail them or they start undermining credibility if they try (as in they are forced to set up internment camps) Bloomberg claims the separatists plan to target infrastructure, but I’ve seen comments on other sites that see that sort of talk as an effort to discredit the secessionists.

Even though the historical parallels look ugly, it’s not at all clear that the separatists are up for anything resembling a real fight. Recall that Rajoy’s coalition consists of a mix of interests, with the majority merely wanting a better deal with Spain (most important, Basque-style control over the spending of tax revenues collected). As our Andrew Watts noted:

Are you guys being serious with these Spanish Civil War comparisons? The Catalonian separatists are led by a bunch of wallet clutching conservatives. Their followers are mostly middle class. They’ll fold at the first sign of trouble much less violence.

The Catalonians couldn’t even issue a proper declaration of independence. If Madrid thought they were serious it’s likely they would’ve held back on invoking Article 155. The outbreak of civil wars aren’t great for your country’s credit rating or economy.

How quickly will political blowback increase the costs to Rajoy? Catalans are seen in most of Spain to be privileged whingers, so stomping on them is a popular exercise. But the Basques can throw a wrench in Rajoy’s plans, and they have made clear they don’t like what is happening in Catalonia. From Bloomberg:

The Basque Nationalists, who allowed Rajoy’s minority government to pass a budget earlier this year have abandoned the prime minister since the Catalan crisis escalated, stalling approval of next year’s spending plans and adding further uncertainty to the economic outlook.

And from the Guardian:

Article 155 has never been invoked and the decision could trigger the unravelling of the 1978 constitution that established the 17 autonomous communities that make up Spain. The constitution was devised specifically to accommodate Basque and Catalan national aspirations.

The other 15 communities – including some that have no historic identity as such – were effectively invented so as to avoid the impression that the Catalans and Basques were getting special treatment. Many now believe that this federation of 17 regions, or café para todos (“coffee for everyone”), is obsolete and that the constitution needs an overhaul.

How long can Rajoy take the damage to Catalonia’s economy, which is big enough to hurt Spain? Rajoy seems to have lost the plot that harsh treatment of Catalonia, particularly if the crisis is protracted, will do even more damage to Spain. And the costs are already mounting. From a must-read article by Don Quijones:

It’s not easy being a Catalan bank these days. In the last few weeks the region’s two biggest lenders, Caixabank and Sabadell, have lost €9 billion of deposits as panicked customers in Catalonia have moved their money elsewhere….

Moving their official company address to other parts of Spain last week may have helped ease that resentment, allowing the two banks to recoup some €2 billion of deposits. But the move has angered the roughly 2.5 million pro-independence supporters in Catalonia, many of whom have accounts at one of the two banks. Today they expressed that anger by withdrawing cash en masse…

The fallout of political instability in Catalonia is being felt across the whole economy. Real estate investment in the region, both domestic and foreign, is drying up. Starwood European Real Estate Finance, the European subsidiary of the U.S. property giant Starwood Capital, has announced that it’s shifting its focus away not only from Catalonia but Spain as a whole, and toward more stable European markets.

It’s not just investments that have been put on hold. People are not spending much either. Important consumer purchases have been put on hold until some semblance of stability returns, and people are not going out as much as before. Based on my own observations, the bars are emptier and the streets are quieter.

Tourism to Catalonia, Spain’s most visited region last year, slumped by 15% in the two weeks following the referendum on independence, according to industry experts

Quijones also describes at some length how Spanish consumers are boycotting Catalan products….many of which are composed heavily of inputs from the rest of Spain. He continues

The web of interdependency between Spain and Catalonia is so tightly woven that if one goes down, the other goes with it. Catalonia accounts for 20% of Spain’s GDP, and roughly a quarter of Spanish exports and the government’s tax revenues. Without it, there’s no way the Spanish State would be able to meet its gargantuan financial obligations — not even with Mario Draghi’s help!

Will the separatists embark on a sustained campaign of violence? Even though Andrew Watt’s view, that most Catalans who oppose Rajoy’s takeover don’t have the stomach for a real uprising, does not contradict the possibility that this struggle over the future of Catalonia could give birth to a militant separatist movement. And it does not take many people operating on a dedicated basis to do enough damage so as to represent an ongoing threat. Please correct me if this estimate is too low, but Naked Capitalism readers earlier estimated that the military wing of the Irish Republican Army consisted of about 300 people.

And there may be a bigger lesson to consider. While advocates of peaceful protest argue that non-violent demonstrations have led to large-scale political change faster than violent revolts, correlation is not causation. Unfortunately, it is likely that non-violent demonstrations can succeed only in certain contexts: when the peaceful demonstrations are so large that putting them down risks civil war, and potential disobedience by the police and/or military, and when the elites are either divided or rational enough to recognize that even if they can win in the near and maybe even intermediate term, it would be a Pyrrhic victory. By contrast, if the government is irrational or simply unwilling to cede power, violence may be the only way to wrest power from its hands. Do you think the Afrikaners would have given up South Africa had it not finally become clear that they could no longer hold it?

Rajoy has not made a single conciliatory gesture, not even trying to present himself as being left no option other that to invoke Article 155 and proceeding in a more gradual manner to create the appearance of being measured and giving Catalonia’s citizens the chance to rethink their stance (or as Lambert puts it, for Quislings to come forward). Instead, he has embarked on a course of action that appears destined to produce the greatest amount of conflict. Rajoy might take heed of Cate Blanchette’s observation as Queen Elizabeth: “I do not like wars. They have uncertain outcomes.”

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  1. WorkerPleb

    The elephant in the room here is the EU, and its silent support for the actions of the Spanish regime.

    Spain is a Eurogroup protectorate, and has been since the earliest days of the crisis. Rajoy in particular is little more than a prefect for the technocratic banking complex that has taken over the continent. No policy is enacted in Spain without the consent of the Eurogroup and implicitly by the Troika.

    The conclusion is inevitable. The EU, ECB, and probably IMF have picked a side in this independence struggle. They are backing Spain, and they are prepared to back any suppression of democracy or self determination in doing so. No surprise to long term observers of what has happened in Greece, Italy, and the rest of the PIIGS over the years, but hopefully some good will come from the sight of ECB loan purchased tanks rolling down Barcelona’s streets in that it will wake people up to the dystopian reality that the once great institutions of Europe have become.

    Even though Andrew Watt’s view, that most Catalans who oppose Rajoy’s takeover don’t have the stomach for a real uprising, does not contradict the possibility that this struggle over the future of Catalonia could give birth to a militant separatist movement.

    The actions of the Spanish government are making this development inevitable. They could have just ignored/condemned the vote and pulled strings for a few months. They are inviting paramilitaries with their current behavior.

    Moreover, I think such para-militarism and violence will become the norm across Europe as the fallout of this long austerity continues to be felt, and while the political class on the continent continues to grossly mismanage the institutions their forebears worked so hard to build. Inevitably, increasing inequality, corruption, and especially incompetence will spawn reactionary/revolutionary/radical/reformist movements up and down the continent. Catalonia is simply the latest symptom of this long banking crisis.

    1. Yves Smith Post author

      With all due respect, your argument verges on conspiracy theory. For starters, Spain exited its IMF program years ago, in 2014. The IMF has nada to do with Spain these days.

      Given Brexit, with the EU giving top priority to solidarity, and Merkel and Macron holding a hard line in negotiations with the UK, there was not question that the EU would back Spain. It would never never never back a breakaway region even absent Brexit. Rajoy would not need to get any approvals. He however no doubt kept various key parties informed as a courtesy (some people should not learn important things in the news) and to facilitate messaging.

        1. Yves Smith Post author

          The IMF would say that, as would any private sector research analyst, because it happens to be true that an exit would be hugely damaging to Spain. See the Don Quijones posts we linked to. Plus the research side at the IMF is separate from the program side and has regularly published pieces that are at odds with the IMF’s austerity prescription. So even more generally, the IMF”s research is not a vehicle for promoting or enforcing its policies. The research side is still pretty orthodox, but no where near as neoliberal as the policy/program side.

    2. Jon Cloke

      Agree completely – one other thing, though; as the technocratic banking complex loses ground (which it inevitably will) it will turn to the extreme right as its’ predecessor regimes in Europe did in the 1930s. It’s true that the rising number of populist hard right groups don’t like the EU or the bankers any more than the left, but they’ll still make that compromise when the time comes…

      Also, re Catalunya, like I said before, all you need is a stupid and inflexible opponent, like the Brits with the colonies. Numbers aren’t the real issue; people forget that during the US War of Independence, there were more greencoats (settlers loyal to the Brits who fought for them) under arms than the entire continental army…

      1. JBird

        The American War of Independence is a good example of how a war nobody was planning on having happens. Nobody except a very few wide eyed crazies in 1763 was advocating independence; to me, Rajoy’s get tough tactics are similar to the various British prime ministers actions. If it’s true of what an earlier commentator’s said of the various Spanish ministries are not prepared to take over the Catalonian government’s duties, because they either didn’t believe it, or were not informed before the announcement, that’s also like the history of that war.

        Perhaps Rajoy and Puigdemont are spending too much attention on the internal politics of their respective nations rather than enough attention on how the other government, and its nation, would react.

        1. Oregoncharles

          It was very much as if Rajoy WANTED a war; he did everything possible to provoke one. The only exception was putting the Guardia Civil back in their barracks after the referendum (note that they’ve been invisible.) The violence during the vote was just too embarrassing – and while the EU is supporting Spanish unity, they would be embarrassed by that violence, too.

          However, he won’t be able to assert control without unleashing them again. I think it’s virtually certain that the Catalunyan police won’t help, and that there will be massive civil resistance. It’s already been demonstrated. I hope our fears of outright war remain merely potential; that will take great restraint on both sides.

          1. Basil Pesto

            to be honest, ~900 injured and none dead from a turnout of 2+ million is a pretty half-arsed way to provoke a civil war

            1. JBird

              Small actions can have big impacts as it is the perceptions of those involved, or even just watching that matter; live really is like the movie Roshomon. No nefarious intention, or ill will, needed for people to lose all control.

              1. Basil Pesto

                I pretty much agree with you, but based on what I just said I don’t really agree that Rajoy wanted and/or did everything possible to provoke a civil war. I don’t doubt that some people perceive it that way, as you say, but I think it’s wrong.

                1. JBird

                  Misperceiving as well as misconceptions and short term thinking can eventually cause results that almost nobody anticipated. Rajoy, and Puigdemont might not want any conflict, even nonviolent conflict, but eventually, and this might take a few years, events will control them as others get involved.

  2. WorkerPleb

    And don’t take my word for it. Here’s more or less the current offical EU postion, from the head of the EU Parliament.


    European Parliament chief Antonio Tajani said Europe should “fear” the spread of small nations as Spain struggled with the Catalonia crisis and the Italian regions of Lombardy and Veneto voted in referendums on greater autonomy.

    In an interview with the Rome daily Il Messaggero, the Italian politician said Europe must “of course fear” the proliferation of small nations.

    “That’s why nobody in Europe intends to recognise Catalonia,” he said.

    It seems small nations should fear Nu-Europe. How long until “nobody” in the EU intends to recognise the likes of Ireland, Latvia, Cyprus or Slovenia anymore?

    How crazy can things get when even the Brexiteers start looking slightly less insane.

    1. Yves Smith Post author

      Sorry, this does not prove your claim. The head of the European Parliament is not a power player in the EU. The heads of the various large states are far more influential, and after that, the head of the European Commission, Jean-Claude Juncker (who still regularly gets slapped around by people like Merkel and back in the day, Schauble and the head of the Eurogroup, Jeroen Djisselbloem).

      And it is pretty hard to see the UK as a victim in the EU, despite British press baron propagandizing. The UK has its own currency, so it can’t be sanctioned for breaking EU deficit rules (which it does regularly: http://www.consilium.europa.eu/en/press/press-releases/2015/06/19-uk-excessive-deficit-procedure-council-issues-new-recommendation/). The UK pays lower EU dues than it should based on its size. It has obtained other waivers and is big enough to influence policy decisions. It also has more non-EU than EU immigrants, so any immigrant wage suppression is due to the UK’s love of crushing labor, and not the EU in particular. In fact, the EU’s labor rules keep things from being even worse than they might otherwise be for ordinary people in the UK.

      The EU has a lot of problems, but most of what is wrong in the UK is due to Thatcherism, not the EU. The EU has served as a remarkably convenient scapegoat.

      1. WorkerPleb

        The parliament heads comments are as good a barometer of EU sentiment towards the Catalonia situation as any. One only needs to read between the lines of the present situation to realise the EU is backing and will back the Spanish horse in this race. As to the heads of state? The list of those who are not either neoliberal, right wing reactionaries, or under the trokia’s boot in one way or another (Rajoy and his banks very much still are), is very small.

        I regret even mentioning the Brexiteers, since I’m not one, and since I don’t think the UK or Brexit is the essential point here. The essential point is the present direction of the EU. I see it sliding towards Franco style authoritarianism with or without the English in tow. The reason is the banking crisis and the power it has placed in the hands of a very corrupt nexus. We saw the EU go all out to effectively topple an elected government in Greece in 2015. We will IMHO shortly see the EU back the Spanish in the wholesale political suppression of the Catalonian nation (despite reservations on their leadership, recognition of that nation should be unconditional).

        I’m aware that these kinds of scenarios have been the staple hysteria of UK red-tops for many years, but I’m also aware that we have a continent that is being ruptured by nationalism and political revolts, under the stewardship of incapable and authoritarian leadership in Brussels. Just because you’re not for Brexit doesn’t mean the EU isn’t going to be out to get you.

      2. Tony Wright

        “A remarkably convenient scapegoat” – sounds like a succinct description of modern politics worldwide, not just the UK. The real problem is tax avoidance by the mega-rich ,via tax haven countries like the Virgin Is., Cayman Is., Panama, Luxemburg and the like, and corporate tax avoidance aided and abetted by synchophantic governments worldwide, who haven’t the collective wit or cajones to stand up to the modern dictatorship of large multinational corporations, and especially the larger banks like Goldman Sachs and their ilk.
        Hence the race to the bottom in corporate tax rates, massive sovereign debt and the unwillingness and inability of governments to confront the real problems facing the planet as a consequence of the ever larger jackboot footprint of overpopulating humans on the planet. To wit, species extinctions, wars, famines, climate change/extremes, plastic and other pollution.
        If this does not change the world will become a mix of Mad Max, the Middle East and the Manila Rubbish Tip within two generations, if not before. Woopee.

    2. ebr

      You don’t need to go into conspiracy mode to argue that the EU owns a surprising resilience. During the Greek debt crises I was certain that EU would unravel & the PIIGS would quit the EU. Instead Greece got raked over the coals & no one quit the EU. So this week Rajoy invokes article 155, and like everyone else I ask, then what? Can Catalonia quit Spain & remain in the EU? October 9 Merkel calls Rajoy & ‘affirms the unity of Spain’ (from the German spokesman) Junker in late September affirmed ‘the Prodi doctrine’ that if a breakaway state must leave the EU & reapply.


      As to political violence, the SDS / Weatherman needed only a core of 20ish people, some above ground sympathizers to raise money, plus the nutters they inspired (SLA). I do worry about nutters from Spain/Greece/Italy blowing stuff up in Germany — with a support network back home & local police that just look the other way. I think the EU could survive even that, but it would provoke a even more policed Europe that resembles the bad parts of America.

      If anyone does know the local Catalan terrain, is there a local split between Barcelona as a global city & the suburbs / rural area? Or is the rallying cry ‘we are all Catalans?’

      Aside: the book to read on 1970’s terrorism is ‘Days of Rage’ by Bryan Burrough

      1. Michael Fiorillo

        The SLA was not inspired by the Weather Underground, but by Cointelro.

        It’s leader, “Field Commander Cinque”/Donald De Freeze was a petty criminal who piggy-backed on the politics of the times, and became a police/FBI asset. The group was manipulated to create disorder and discredit the Left, as it ably did by assassinating Oakland’s first Black school superintendent, Marcus Foster, which happened before Patty Hearst’s kidnapping.

        Incidentally, while the arrogance, folly and violence (none of it lethal, however, except to themselves,) of the Weather Underground is still used to tar the 60’s/70’s Left, the fact is that it had very little purchase among the (steadily declining) movements as the 70’s progressed. This is partially testified to by the catch phrase their many opponents in and outside of SDS used against them at the time, satirizing the provenance of their own name-taking from Bob Dylan: “You don’t need a rectal thermometer to know who the assholes are.”

        Weatherman/Weather Underground, comprised of deluded youth of privilege – Bill Ayers father was head of Consolidated Edison in Illinois, and the 11th street townhouse they bombed themselves out of was owned by an ABC executive – was representative of little more than the 60’s Left’s terminal decline; if people in Catalonia are going to use that model, it means they’ve already lost.

        1. paul

          I always thought it was curious the that bill ayers could move from enemy of society to tenured professor with hardly any attention from the left or right.
          As adam west’s batman would remark to prison governor crighton: “sound penology!”

          1. Michael Fiorillo

            He went into education later, promoting the break-up of large comprehensive high schools into smaller schools (a disaster, mostly, though he’s not to blame for how it was implemented), and once came to my school to speak.

            I wasn’t impressed before, or after.

      2. Yves Smith Post author

        We were alone and early in the Greek negotiations of 2015 to call that the negotiations would break down when everyone else was certain some compromise would be found.

        And as we also discussed repeatedly, what made a Grexit an unattractive alternative to accepting more austerity was that leaving the Euro would have even more downside. Even assuming cooperation of the other parties, it would take years (as in over 3, probably 6) to get the many outside parties to make the needed IT changes.

        Unfortunately, this was also an unpopular view. People don’t like hearing that the alternative to a bad choice is an even worse one.

        Please bear in mind that just because we describe what is happening means we are advocating them. A doctor that says a patient has Stage 4 cancer (odds of surviving 5 years only 20%) isn’t on the side of the cancer.

        What looks like EU/Eurozone resilience is that all of these countries have become deeply intertwined economically (and for members of the Eurozone, financially due to the role of payments systems). None of these countries are even close to being autarkies. Leaving the EU or Eurozone is tantamount to forcing yourself to become more like an autarky immediately. But if you don’t make your own pharmaceutical, energy, food, you will suffer shortages of critical materials. That will mean a rise in the death rate. That’s not acceptable politically or socially, hence staying in the EU is better, even if that comes at a cost too.

        IMHO, the SDS/Weathermen in the US weren’t effective in terms of making themselves seem a real threat. I was in London in 1984 and you did have in the back of your mind when you got on a bus that busses were targeted. That was partly due to the signs everywhere about suspicious packages. I was in NYC post 9/11 and even then didn’t have the same sense of risk (and I was also aware that statistically the odds of my actually being at risk in London were close to zero and the back of the mind thoughts were silly but they were still there).

  3. Ruben

    In the short term there are three determinant factors: Catalan police, the banks, and deposit holders. If the Catalan police accept rule from Madrid and banks continue obeying orders to confiscate autonomic gov’t accounts, Madrid is winning, but the possibility that people and small scale businesses would increase withdrawing deposits either out of fear or as a protest will seriously complicate the success of the take-over. If on the other hand the Catalan police does not obey orders from Madrid but banks continue confiscating autonomic gov’t accounts the short term result is very uncertain.

    What happens in the mid to long term is quite another matter.

    1. Oregoncharles

      Probably not, if Catalonia’s 20% of the economy comes to a halt and tourists avoid Spain in general. I think that’s a reasonable deduction from Yves’ post. That’s one of Rajoy’s big weaknesses – along with his dependence on the Basque votes in parliament, which apparently he isn’t going to have.

  4. The Rev Kev

    Something tells me that Rajoy would not go full-retard with the Catalonians unless he had been given absolute backing by at the very least the EU but more likely the central banks. Otherwise there would be the very real fear that during the coming troubles the central banks and bond holders might be tempted to pull the pin on their investments in the Spanish economy out of fear of not being able to get their capital back again if things really turn sour.
    The Basques have already got their back fur up as they must realize that they may be next on Rajoy’s hit-list. The Gibraltans might want to watch their back as well since Rajoy said that he wants that territory back again. It is hard to give a prediction here, especially about future events, but it might tun out that the Catalonians might give zero cooperation with orders from Madrid. I do not know what might happen next. Administrators sent direct from Madrid? A transfer of economic activity to Spain’s other provinces to both undercut Catalonia and to get in the other provinces good books? Time will tell.

    1. Yan

      All gvt functions are transferred to central ministries. They are not ready for it as they really thought article 155 was not to be invoked.

    2. Yves Smith Post author

      It doesn’t work that way. The ECB meets every two weeks. Its board rotates. Pray tell, how would Rajoy go to the ECB to get approval? For what, exactly?

      As has been described by other sites I haven’t quoted, there were factions important to Rajoy that think he’s been too measured already, believe it or not. Rajoy’s moves are entirely the result of short-term political calculations.

      1. WorkerPleb

        This is the central point on which I must disagree: The ECB is first and foremost, an instrument of the EU’s political will (currently that of the hegemon, Germany). Its control over the banking system, in particular its control of bank liquidity, has been used as weapon against several countries to force them into either compliance or submission. Balance sheets come second to politics at the ECB.

        If I am wrong, then the banking system will play no more serious role in this Catalonia crisis.

        However if I guess correctly, the Catalans will be forced into submission via threats to their banking system. It is beyond the ability of the Spanish government to effect such an outcome. Squeezing the banking system requires the complicity of the ECB, which itself requires orders from Berlin.

        I hope I am wrong, but I think events will prove me right.

        1. Yves Smith Post author

          Please stop presenting inaccurate information. It’s against our written site Policies (see our comment on agnotology). You are out of your depth on this topic and it shows.

          You are also engaging in bad faith argumentation. First you tried claiming that Spain needed the ECB’s approval. Now you say (which is more accurate) that the ECB is an implement of EU politics and doesn’t do anything independently. This contradicts your earlier remark. This is a second violation of our written Policies.

          It was used against Greece because Greece was dependent on the ECB (under political pressure) because its banks were insolvent and making heavy use of an emergency facility called the ELA. The ELA is supposed to be used only for solvent banks, only on a short-term basis, and only to deal with short-term liquidity crises. The ECB under political pressure, had bent its own rules massively to shore up the Greek banks and was eager to stop doing that. The ECB’s board had to go through the nonsensical exercise every two weeks of extending the facility. There’s no comparable fact set here.

          You also missed that banks are ALREADY playing a role in discipling Catalonia, and the ECB has squat to do with that. Spain was able to take control of the spending of 298 Catalonian administrative bodies by telling the banks not to allow disbursements of funds except as approved by Madrid. That came out of the Constitutional court order ruling the referendum to be illegal. Spain took control with its excuse that it needed to prevent spending on the referendum.

          The reason the banking system plays a role in Catalonia, as we explained in an earlier post, has nada to do with the ECB. Most of the important banks in Spain are licensed by the Spanish government. Given the Constitutional order, Spain could revoke the licenses of any banks that defy its orders with respect to Catalonia. It could also seize the branches and assets of any foreign banks operating in Spain that defied its instructions (not that any would).

  5. Disturbed Voter

    Spain was only recently run by a fascist dictatorship, and an obsolete monarchy before that. Similar to Greece. Democracy is very thin on the ground in both countries. And Spain doesn’t want to end up in receivership like Greece.

  6. Eustache De Saint Pierre

    Just a few thoughts on the IRA, or more correctly the Provisional version which is the force that was born out of a situation whereby the Catholic community came under a sustained assault from the authorities as a reaction to a non-violent civil rights movement & what would probably be called ethnic cleansing today in certain areas.
    I imagine that it is possible that there were only 300 members of the Army council, probably split into certain areas, but basically it seems there were many who performed more minor roles as in rioting, & due to the sledgehammer creation of martyrs, a significant percentage of the population became more supportive, providing safe houses & general support. 342 people were interned, which actually made the situation much worse, not least because of incompetence many interred were not IRA members. The number eventually reached around 1400 during a period of all hell breaking loose leading to direct rule from Westminster & so on.

    The Bloody Sunday march carried out by the Civil Rights movement was anti-internment, whose leaders who promoted MLK type tactics were marginalised as more & more turned to the Provos.

    Perhaps the fuse that has been lit in Catalonia will fizzle out, I hope so but if the issues had been examined & addressed at the start in NI which were basically about gerrymandering, lousy jobs & housing, the seeds of full conflict might not have been sown.

    1. PlutoniumKun

      It must be remembered of course that the Provisional IRA emerged out of the ashes of an ‘IRA’ that had been infiltrated and undermined by left wingers who saw it as a ‘workers’ movement that could be used for broader aims. The initial shooting in the ‘Troubles’ was from Loyalists killing catholics randomly. It was the chronic failure of the IRA to defend nationalist areas that led to the organisation effectively disbanding and reorganising on a cell basis, with much more effective leadership. Internment failed because almost everyone swept up were part of an older generation of activists who had hardly anything to do with the Provisional IRA that reorganised from 1971 onward. Having said that, the IRA itself consisted of a series of autonomous groups who barely spoke to each other, as much due to animosity as a need for security. The Derry IRA, Belfast IRA and the Armagh/South Tyrone IRA essentially ran their own private wars. This fragmentation made it both hard for them to maintain a consistent strategy, but also made it very hard for the authorities to undermine them.

      From what I’ve read they probably at most had 2-300 ‘members’ at any one time, but there would certainly have been several thousand people actively involved in a peripheral level – minding weapons stores, raising money, spying, etc. And at the same time, it was gradually becoming less and less effective militarily, but more effective politically.

      Another key point is that the IRA was heavily dependent on its ability to raise money and support in the US (most initial weaponry came from the States). It proved very hard for them to get weapons and use them effectively. It would, I suspect, be much harder these days because of more effective means of surveillance. See, for example, how islamacists have been generally pretty rubbish at organising consistent terrorism in Europe, relying instead on suicide attacks and nutters. That said, the ability to, say, find information on the internet on how to build a very effective IED would be significantly greater – the IRA put enormous effort into building and obtaining sophisticated weaponry with mixed success, but it was much harder to do that in the 1970’s and 80’s than now.

      I think the ‘lesson’ learned from NI and the Basque Country is that organising and maintaining an armed insurrectionist force is very very difficult. No doubt individuals could cause havoc if they felt pushed hard enough. But there is a big difference between building and setting off a bomb somewhere or shooting some police officers and maintaining a long term insurgency.

      1. Oregoncharles

        One consideration is that the Guardia Civil, the national police, are in a very exposed position, especially out in the streets. And the locations of their barracks are well known. I assume this is one reason many of them have withdrawn to a military base, but then they have to travel from there to the streets.

        Let’s hope these considerations don’t come into effect – a couple of Catalan commenters have been pretty passionate about maintaining non-violence. A strategy of ungovernability could have a big impact, as Yves implies. This may prove a test case for non-violent civil resistance.

        1. PlutoniumKun

          Successful insurgents have long taken on the strategy of Michael Collins, the de facto leader of the IRA in 1920-22. He realised the police at the time were not enthusiastic about the fight – the real danger was the army and British intelligence services. He focused on assassinating the ‘G-men’ who were the local counter-insurgency officers who’s job was to run local spies. By doing so he effectively blinded the British Army in Ireland, they simply didn’t know who or what they were fighting and they were unable to crack down on the ‘shadow’ government set up by Republicans. Apparently, both Mao and Ho Chi Minh were keen students of Collins. If local police in Catalonia refuse to co-operate with Madrid, they may find it impossible to keep control.

      2. Eustache De Saint Pierre

        Yes PK – my cousin was told of meetings between South Armagh & Belfast in which the former , much to the annoyance of the latter always insisted on wearing masks. A person I have met who now runs a fairly large company who I have worked for on occasion, showed me an amazing version of Google Earth he had on his phone which he declared as being one of the reasons for the Good Friday agreement. He was the commander of a particular hotspot area & from what I know about him, he was probably given or sent the app to convince him to stand down – a good man to work for though, knows his stuff.

        Hopefully the EU will be a restraint on Rajoy who otherwise might make some of the old mistakes.

        1. PlutoniumKun

          It was no secret that the Belfast IRA had been completely infiltrated by British Intelligence for years. So that story doesn’t surprise me.

  7. Sutter Cane

    I was just in Barcelona for a couple of days last week. By chance I happened to be there on Monday when the 9:00 a.m. London time “ultimatum” was supposed to be happening. I had some concern as to whether this would effect my trip, but not enough to change my plans.

    It happened that I went to the flea market on Monday morning. Everybody was very chill, in their Catalan way, and except for the “Si” banners hanging from balconies, had you not been watching the news you would not have known that anything of import was happening. Only when I got back to the hotel later and saw that news did I hear any mention of it.

    In fact, it was only around 10 p.m. each night, when everyone in the city starts banging on pots and pans to show their support for independence, that you would know there was anything out of the ordinary going on. Apparently this is a form of peaceful protest that went on under Franco, as well. It would raise and fall in intensity, sometimes a lone old lady with one pot, sometimes it seemed like it was the whole city at once, and it would last anywhere from a few minutes to half an hour. Cars driving by would honk their horns, and diners sitting on the rambla would clink a knife on their glass. An invigorating thing to witness. From the widespread banging, it appeared that there were indeed a lot of people concerned with independence, even though they didn’t make mention of it the whole day and just went about their business.

  8. charlie

    1. Catalonian independence primarily exists in a state funded media bubble i.e. Channel 3.

    2. As others have noted, the primary driver is a right wing party.

    3. The CUP are the radicals, and the real dynamics are between them and the right wing.

    4. I do agree the muncipialists and others are very worth of attention.

    5. The Catalonian business class is sending a very clear message that independence has gotten out of hand.

    6. My reading of Rajoy’s action is not that he is replacing the goverment, just removing it’s ability to issue orders to civil servants. We’ll see after the Senate vote what the orders look like.

    7. It was the head of the catalonian police force charged with sedition.

    8. The dynamics are Rajoy is trying to get the CUP to do something stupid like take up terrorism. And they are that stupid.

    9. Nationwide the real effect is that PSOE is being utterly discredited. This was all Zapatero’s fault in that is order to get support he made the deal back in 2006. I suspect of national elections were held, PP would win an absolute majority, PSOE would fade into third place.

    10. Nationalism has a cure, it is called travel, and I urger the people in the Catalonian heartland to learn that lesson.

    You know what the difference between fuet and chorizo is? Fuet doesn’t have any spice. Luckily I found a lot of good quality Mallorcian fuet so I can contiune my boycott. They seem quite happy speaking Catalan and voting for PP.

    1. Strategist

      Tendentious stuff.
      “Catalonian independence primarily exists in a state funded media bubble” – that one makes me puke.
      How about putting it to a fair vote?

  9. Croatoan

    How much Catalonians are willing to fight for independence will be a measure of how deeply neoliberalism has invaded the psyche of Europeans.

    Greece was the first to fail that test. Catalonia is my last hope.

    1. JBird

      In an interview with Doug Henwood, the then Greek minister Yanis Varoufakis in charge of the bailout negotiations said that his government had decided to pull out of the EU if they could not get reasonable terms; the cost of the “bailout” being to them comparable to just leaving, and he was very surprised when the leadership choked.

      Considering how badly Greece has been doing since then, the next country might just say fuckit and leave, if its economy goes bad and it needs help.

  10. Katz

    Thanks for your insights Yves.

    When you say “Recall that Rajoy’s coalition consists of a mix of interests,” it looks like you intend to describe Puigdemont’s coalition, no?

    1. Strategist

      Andrew Watt’s view, that most Catalans who oppose Rajoy’s takeover don’t have the stomach for a real uprising

      I’ve got to say that snark from online armchair revolutionaries that the Catalans are a load of bourgeois wusses because they won’t start shooting or bombing seems like bad taste to me. The Catalans’ commitment to non-violence takes its own kind of guts and is inspiring and impressive. They have been as impressive as the Scots Nats in this respect. Non-violent protest is appropriate for 21st century western Europe, this ain’t the 1990s Balkans or the Ukraine.

      The dangerous nationalism out there is Francoist nationalism.

      1. Ruben

        You might be right. The president of the Basque branch of the governing conservative party in Madrid has now threatened the Basques with the same treatment they plan to impart upon the Catalans. And what is more surprising, the Madrid central gov’t delegate in the Castilla-La Mancha region, also from the Conservative party, has threatened the Castillian president with application of the same constitutional article they plan to apply in Catalonya, not because of any Castillian nationalism, but because the policies of the Socialist-Podemos alliance governing Castilla-La Mancha are too left for the liking of the governing conservative party in Madrid. This is becoming a Franco-zombie terror B-rated movie.

  11. George Phillies

    Apparently there will be a fresh election, at this moment said by Rajoy to be in much less than the allowed six month maximum. “Election” has the risk for him that the wrong side will win, a bad outcome for him. Of course, if it is apparent that the wrong side is going to win, he could take the “necessary method” of barring the secessionist parties from contesting the election, which might also have negative consequences. Barring parties might face legal objections, and might also be inadvisable (some might want a firmer characterization), but it could be proposed that Rajoy is deliberately waving his red cape at the secessionist bull.

    1. Yves Smith Post author

      I have not seen more recent polls, but your core assumption isn’t likely to be correct. Independence has never gotten majority support in Catalonia, and the backing for it has fallen in recent years. The majority rejected an independence referendum if Spain didn’t support it per a poll run by the Catalonian gov’t weeks before the referendum.

      1. Oregoncharles

        This makes it very strange that Rajoy tried to suppress the vote. You don’t suppose he has polls of his own that don’t agree?

        I’ve been assuming that authoritarian behavior by the Spanish gov’t. will increase support independence, for obvious reasons. Apparently George thinks the same.

        However: Rajoy will probably exclude the pro-independence parties from the new elections. The problem is that the elections then lack legitimacy.

        1. Yves Smith Post author

          Being hard on Catalonia is very popular in the rest of Spain. As others have pointed out, Rajoy’s Popular Party has gained from this move. He was, believe it or not, criticized for being measured. And the referendum itself was authorized under dodgy methods. A reader went through it in comments so I don’t have the details at hand, but the vote wasn’t in a normal legislative session. It was somehow engineered so that it won even though the parties that backed it who normally don’t have the seats got it through. So the separatists were already playing fast and loose, and some might have argued or believe they’d fix the results somehow.

      2. PlutoniumKun

        The precedent Rajoy needs to beware of is Ireland 1916 -1918. The revolutionaries were very much a small, radical minority in 1916 with almost no real influence. But an overly heavy handed response by Britain along with the failure of Home Rule Bills led two years later to the ‘moderate’ nationalists being swept away by Sinn Fein in the 1918 General Election. They then set up an alternative Parliament which completely undermined British government legitimacy in Ireland and made Ireland effectively ungovernable.

        It doesn’t happen often, but when ‘moderate’ seccessionists are discredited, the public can swing to radicals with remarkable speed.

  12. JTMcPhee

    When it comes to destabilization and de-legitimization of national and regional governments, how many “operatives” does it take to effectuate the ends desired by the power centers? How many to catalyze regime change in Ukraine, Afghanistan 2001, or this whole list of US imperial “interventions,” https://en.m.wikipedia.org/wiki/United_States_involvement_in_regime_change How many snipers randomly shooting into peaceful public protest, or shooting a few police or soldiers, to change the tenor of the whole political economy? And how about the rotten sh!ts that sit around confere3nce tables in places like Langley and GCHQ, pondering the means and opportunities to conduct a vector-bending assassination or three?

    All kinds of wild offshoots and vagaries are in play, no one knows what the whole “thing’ is all about, as if there is any way of reading this situation into some correct conceptual outline (especially in the global context of the ongoing conquest and subjugation of the many, and the biosphere, by the power concentrations of the very few in pursuit of their pleasures…) Too many humans devoid of a sense of comity and any notions about perpetuation of the species, intent rather on pursuit of personal interests…

  13. Ned

    “A series of measures will be introduced regarding sensitive issues such as security and public order, financial management, taxation, the budget and telecommunications.”
    i.e. Keep the debt repayment ball and chain around the Catalaxpayers neck so that the the payments to cover the loans keep coming in?

    The Passive Aggressive approach is better than firearms. The police can always pretend that they only speak a subregional or neighborhood version of Catalan when facing orders from Madrid, or passed onto them haphazardly by commanders. As a Spanish speaker, I felt like I was in a foreign country in Barcelona. There is linguistic resentment and locals either can’t, or pretend, that they don’t speak Castilian, or French.

    “…the military wing of the Irish Republican Army consisted of about 300 people…”
    Like Ireland the Catalan grudge goes back to before Napoleon’s time. Don’t think many monks, crusaders and saints came out of Catalonia though, so perhaps there’s less religious zeal there to be militarized. Plus going back to Robert “Orange” Peel there was active condemnation of Catholics in Ireland who were not allowed to participate in government.

    “Tourism to Catalonia, Spain’s most visited region last year, slumped by 15% in the two weeks following the referendum on independence.” Is that a year over year comparison on the same dates?
    That means that you only wait half an hour for the good restaurants instead of 45 minutes and you might actually be able to walk on the sidewalk in the Gothic Quarter instead of being forced into the middle of the street. Barcelona was the most crowded place I’ve ever seen except for Hong Kong. Money flows in like water, starting with the 1 Euro pay toilets at the train station and finishing off with the $300 a night ‘economy’ hotels. The mayor of Barcelona has said she wants to put the brakes on tourism with no new hotels being licensed and a strict outlawing of Air BnB.
    That’s the revenue that Madrid wants a piece of.

    I recommend the free online video, “Las Cloacas De Interior, the State’s Secret Snakepit”
    for a multi hour expose of the fake news and facts that the Spanish Ministry of the Interior created to frame and discredit Catalan officials before the last election. It’s subtitled in both English and Spanish and is fast paced.

  14. Norb

    Neoliberalism provides for no compromise. The Catalonia crisis is providing another example of how the ruling elite in the West are moving toward Totalitarian government. Corporations have used the language of Democracy to capture the levers of power and now must betray democratic sentiment in order to maintain that power. They are revealing their true colors. They are Totalitarian. The tone is not dialog and compromise, it is obedience.

    To challenget this trend, only acts of civil disobedience pose a hope of success without Massive destruction. Civil disobedience can only be successful if the leadership of that dissent is interested in protecting the interests and wellbeing of the citizenry. This conflict rises above technocratic squabbles and goes to the heart of human relationships- to the nature of Government itself.

    As the Andrew Watts observation points out, “The Catalonian separatists are led by a bunch of wallet clutching conservatives”, such leadership, spell disaster for the interests of local working people and their wellbeing. Such leadership, like Greek leadership before it, is unprepared for the structural changes that are needed, and relies too heavily on the good will and reasonableness of their adversaries. True reform would take an economic coordination supporting the local as its primary goal, then moving outward to form supporting relationships and networks. The current crisis is moving in the opposite direction because of the no-compromise Neoliberal strategy. The fealty is to Neoliberal agenda, not the Nation of Spain or its people. The relationship between Catalonia and greater Spain is lost in the needs and interests of Neoliberalism itself.

    The movement of banking and corporations out of Catalonia, or the interests of these institutions secured by totalitarian force if they remain in place should be a wakeup call for everyone. Neoliberalism produces clear winners and losers and demands that the losers be punished, or at the very least be ignored or marginalized. The class of losers can only increase under the current political understanding and leadership. It is acceptance of this class of “Losers” that must be resisted or abolished. Ignoring the losers or suppressing them further carries great risk. It truly produces a new form of peasant class and promotes stagnation and decadence overall. A strange Dystopia.

    Heading off physical violence is in everyones interest. But this will only be possible if a strategy can be found to take back the power and autonomy that has been appropriated by International Corporations. The civil disobedience must take the form of Economic Sanctions from the bottom of society upward. Strikes, boycotts, and the willing appropriation of business designed and operated toward the goal of social harmony and benefit.

    Without that gradual rebuilding or reorientation of goals, violent conflict can only rise. General disorder on a large scale, punctuated by repeated attacks of a more focused nature on infrastructure or specific groups.

    The ignorance and selfishness promoted by an unyielding Neoliberal ideology begs for comparison to the destructive nature of Stalin’s Communism. Where once Western Capitalism offered a promise of abundance secured through the exercise of “freedom” of action, it is increasingly evident that it will require extreme forms of violence to perpetuate itself, both in human terms and the burdens it places on the world at large.

  15. MisterMr

    Today we had a similar referendum for autonomy in Lombardy, Italy.

    The lombard referendum is not about independence from Italy but rather about money: Lombardy is by far the richest region in Italy, so it pays in taxes to the central government in Rome much more than it gets back.

    While the pro-autonomy guys in Lombardy frame this as a matter of freedom, it’s mostly rich people who don’t want to pay taxes to help poorer people.

    I think that the same is happening in Catalunia, and that as such the indipendentists are the low taxes, neoliberal guys.

    I’m a bit surprised by the fact that a number of apparently leftish people are ok with a rich region of a nation wanting to stop sending tax money to poorer regions of the same nation.

    I understand that Rajoy is an ass, but why is everybody here assuming that the Catalans are right?

    1. Yves Smith Post author

      Thank you. I haven’t been wild about the separatists because they have been intellectually dishonest (trying to pretend the vote in a referendum with no ballot controls whatsoever was legit) and inept, and their position has never gotten majority support in polls, evah. That may have changed recently due to Rajoy’s head-breaking but I’d like to see evidence of that first.

      But I have also been unsympathetic for that reason and should have said so. I’m in high tax New York City and don’t resent supporting people in the South (even though they tend to vote for horrible policies) and I don’t think most people here or in CA resent the transfers to other states (the ones who are tax fanatics instead hate paying for lower income people irrespective of where they live). The left wing parties in Catalonia for the most part accordingly don’t support independence either.

      1. Oregoncharles

        Except for the former Confederacy, there is no national tradition or distinct culture associated with the various regions of the US, as there is in much of Europe, although there are some rumblings from Texas (please). Many years ago now, I saw a discussion of the various “lost nations” of Europe. Some, like Frisia, are quite interesting. I assume Catalonia was among them, though I no longer remember. One reason France is supporting Rajoy is that a similar language extends all along their Mediterranean shore.

        The larger nations of Europe are not the cultural units we think of them as being. Too much history. England’s problems with Scotland, N. Ireland, and even Wales are a familiar example.

      2. Ruben

        Interesting. Do you think that more productive people must be forced to support unrelated less productive people?

        1. Yves Smith Post author

          Yes. Taxes are the price of civilization. I also pay for roads in other cities, public education when I have no kids, Medicaid here and in other states, and unlike you, I am not resentful. Frankly, you can go to hell. You have deeply internalized the view that people should be cannon fodder for the economy, when the objective of any social order should be to promote the safety and well-being of its members.

          First, the Nazis used that view as a justification for killing people who were handicapped or defective. So I take it you are in favor of eugenics. I happen to have had amblyopia, have scoliosis, poor coordination and have dreadful manual dexterity. The Nazis would have deemed me a woman unfit for breeding and had me killed. And that of course goes double for gays and other undesirables.

          Second, you are of the explicit view that “unproductive” people should just go die or depend on relatives, when their relatives may be in no position to help either. It apparently does not occur to you that some people can’t work or can’t get highly enough paid work for good reason…including needing to take care of relatives, job discrimination against older people, or lack of demand in the economy. Where were you when Spain had 27% unemployment? A substantial number of jobs in the US don’t pay a living wage. Many can’t find full time work. But you’d deem that a fault of “unproductive” people.

          Third, you are also saying that people with small families or who choose not to have kids, which is arguably the most societally responsible choice one can make these days, should also go die when they have no work or get old, since they will have no younger relatives to take care of them.

          Fourth, in a market economy, even people with kids often don’t have kids who live near them or are too busy/desperate running their own lives to engage in elder care. You can’t have any direct experience in taking care of an elderly relative to espouse this view. Most of us who have parents who live to be elderly will need to rely on paid professionals like those in nursing homes.

          Fifth, did it not occur to you that having uncared for people get sick and die on a widespread basis is a prescription for a public health crisis?

          You are basically advocating for everyone to be a subsistence farmer dependent only on extended family. Even Elizabethan era towns would saw it as their duty to help the poor.

          1. Hans Suter

            For more autonomy in Lombardy 95,29% have voted yes, 38,25% of voters participated. in Milan 31,2%. Now a discussion will be opened about what matters to transfer from central govt to Lombardy. No discussion will be opened about fiscal matters.

            1. MisterMr

              That’s because the one who voted were only the “Lega Nord” (the autonomist party) voters, or anyway people who share this Lega Nord idea.

              Other people like me, who were against, didn’t vote so to not legitimise this referendum that, it should be noted, legally is consultive (so the government is totally in its right to say “who cares”).

              BTW the question in the referendum was, as far as I know (I didn’t look at the actual screenshot since I didn’t vote) very ambiguous, like “do you want autonomy?”, however the one spot that I saw produced by the Lega Nord was very explicit, clearly stating that the southeners are mooching lombards and that the referendum was against this.

            2. DJG

              Hans Suter: In Italy, 31 percent turnout for an election or referendum is exceedingly low. Italy isn’t the U S of A.

        2. MisterMr

          First of all, in this case “more productive” means “people who happen to live where there are more job opportunities”;

          second, you shouldn’t assume that people who have an higer income are “more productive”, this is the worst reductionist idea in economics;

          third, lombards are not more taxed by the central government than other italians, they are taxed at the same rates but, as they (we) have higer incomes on average, tend to pay more;

          fourth, well if in order to tax people you have to ask their permission you can well cancel the whole concept of taxes, which would be a problem.

          1. DJG

            MisterMr: Thanks. A big difference in Italy, too, is that Lombardy truly isn’t viable as as separate nation. Look at those ever-indefensible borders.

            I wonder, though, if the problem here is that the endless problems and little action from the central government about a more federal Italy have now backfired. The Italian regions truly could have more autonomy.

  16. Peronella

    Thank you Yves for your analyses of the situation In Catalonia. It is difficult to find much in the English press that is not riddled with errors, intentional or, likely just lazy journalism. You have managed to see through all of that.

    I’d like to make a few comments, as succinctly as I can manage.

    — Puigdemonts’s two responses to Rajoy did not give a binary response to whether he declared independence or not. He sent Rajoy the transcript of his speech in the Cat Parlament. His intent, in both his letters and his unusual DI was to demonstrate to the world that he was, at all times willing to give time for dialogue and negotiation and allow Rajoy to show his intransigence. In this he succeeded.

    — The bogus solution to calling for elections is to first outlaw pro independence parties, which are now in majority. In other words, Rajoy’s party and allies would rule in Catalonia. This has already been done, very recently in the Basque country, and worked real well for Madrid. Maybe not so much for the Basques, who resent it. No problem has been solved here.

    –I do not expect Rajoy to act within the limits of the Constitution. In fact his party (then named Alianza Popular) voted against it back when. He has no problem ignoring it, and so far has not faced any consequences.

    — The local police, during the October referendum were loyal to the local govt. There are no instances of any officer changing sides. Not one.

    — Massive civil disobedience, peaceful and non-violent demonstrations is the mantra of the Catalan citizenry. This is sacrosanct. They are also highly motivated, persistent and disciplined. They believe this is their moment. Many of the population has already disconnected mentally, emotionally from the Madrid gov’t. In other words, they have withdrawn their consent to be governed by Madrid. At present the intent is to make official this disconnection. Getting the paperwork done. They will not back down. Nor will they allow their gov’t to. Puigdemont would be seen as a traitor if he did.

    — The CAT citizenry is very aware that Spain would like nothing better than to see a violent population which would allow Rajoy to justify his violence and discredit the movement. They are on the lookout for infiltrators and agitators inciting for violence and neutralize them.

    — I do not agree, at all, with the Andrew Watts quotes.

    — Spain has only 3 natural autonomies; Catalonia, Basque country and Galicia. Each have a different language in addition to Spanish, different traditions, etc. The other 12 autonomies are artificial and were created so as to dilute the effect of a Catalan autonomy. That is the intent of “cafe para todos”.

    — Re the banks. So far, the only move is on paper. It is significant that the 2 major Catalan banks, Sabadell and CaixaBank, have moved to Valencia (and not Madrid), which would make an eventual return to Catalonia very easy since Valencia, and the Balearic Islands are part of Greater Catalonia, and speak dialects of Catalan. Like British English and American. Some minor differences but clearly understandable. The cultural and historical ties are strong.

    — run on banks. I suppose that panic may be a part of the withdrawl of funds. But I believe a larger part is blowback. Catalan municipalities are withdrawing funds from the leaving banks, and their deposits are more significant than just personal deposits. Lately, I have seen calls by ANC, one of the two major grass roots pro-independence associations asking people to close their accounts on leaving banks. A clear case of blowback.

    — it has been confirmed that the central gov’t and the king himself have been placing phonecalls – personal phonecalls – to companies headquartered in Catalonia pressuring them to move. One of them was the Spanish auto manufacturer SEAT, which so far is refusing to move.

    — Re Europe. While remaining in Europe was important, this is now changing. Catalans want to be able to vote, after they are independent, on whether or not they want to be part of Europe. As one example at a forum organized by ANC, in the community where I grew up, working class, the line calling for such a vote got the biggest applause of the evening. People are now much more focused on EFTA, denoting widespread disappointment and distrust of a Europe where economics trump basic human rights.

    — Catalans are now on a permanent resistance footing gearing up for massive disobedience in order to protect their institutions of governance. That is why they can turn out in the hundreds of thousands at a moment’s notice. Massive Catalonia-wide general strikes are now being talked about to hurt Madrid where it matters, in the pocketbook. The most recent strike was one day, with many business cooperating. The talk is of upping the duration to 3 days. There is no scenario that I can see where Catalans back down, or become violent. Violence is totally rejected.

    — As to Charlie’s post of 10:26 am. I have no idea where he gets his info from; it does not reflect anything that I have seen or read in Catalunya.

    — for those who say that the Catalans have never had so much autonomy before, this is debatable. However, compared to the violent repression during the Franco years, which included widespread incarceration and torture, including political assassination, I guess even a little bit of autonomy looks, to those on the outside who have never had to live under an openly fascist dictatorship, as a lot of freedom.

    Some personal thoughts:

    I now wonder if Rajoy’s feeling for the Catalans is personal, visceral hatred. It is vindictive. It has transcended the gov’t framework. He is the man who gathered millions of signatures throughout Spain to force the Tribunal to effectively nullify the Catalan Statute. This was 11 years ago. He whips up Catalanophobia to get the xenophobic vote. This has been done for so long and so effectively that a majority of Spanish population who get their news from the Spanish press hates the Catalans without ever having come into contact with one. I’m not making this up.

    The aim of Rajoy and the PP is to make Catalans disappear from the planet. Think of the Borg, in Star Strek. “Resistance is futile, you will be assimilated”. Stop being Catalan, become drones and we will love you. Tell this to a population that has been resisting for 300 years protecting their language, institutions and traditions that have been repeatedly outlawed.

    I wonder how many people who visit this site know of this website http://www.fnff.es/ ? Think about it. The Fundacion Nacional Francisco Franco is funded with public taxpayer monies to lovingly tend to the image and legacy of the fascist dictator. Can you imagine in Germany having a taxpayer funded foundation defending Adolph Hitler? Or one in Italy to defend the legacy of Benito Mussolini? Me neither. the mind set of a nation that allows this is . . . . unfathomable.

    1. paul

      The parallels with Scotland & the SNP are patent to me.
      “each unhappy family is unhappy in its own way.”
      The catalan’s have an advantage in having their own media, here we do not.
      Still the 3rd largest party (by their own rules) in Westminster, yet treated as a provincial oddity by every paper and television channel.

    2. Oregoncharles

      Thank you. As I said above, and before, Catalunya is proposing a test case for non-violent civil resistance, which until now was pretty theoretical. That’s a noble cause, and I wish you all the luck in the world – but I think you’ll need it.

    3. Basil Pesto

      the Fundacion Nacional Francisco Franco is, from what I can tell, a private foundation. It seems that there was a controversy because some years ago the Spanish government gave about 150,000 Euros to the foundation to support its archival work (incidentally, if that was the true purpose of the funding, then it’s worth pointing out that the German governments (federal and state) support historical and archival work relating to materials from the Third Reich as well. Not sure what the situation is in Italy.)

      Your post gives the impression that the FNFF is an organisation that is principally funded by the government with taxpayer money. Is there any proof that this is the case? I would remind you about the site’s policy regarding agnotology, as alluded to above.

      1. peronella

        I am well aware of NC’s policies, and appreciate and approve of them, which is, among other things, what makes this blog so valuable, and why I have chosen to post on it. If I have broken any rules, I will expect the moderator will let me know. I hope she never has to.

        To your point about the Fundacion Nacional Francisco Franco, I refer you to this link: https://www.racocatala.cat/noticia/2630/fundacion-francisco-franco-ja-ha-rebut-150.000-25-milions-subvencions
        within the link you will find links to other sources.

        Note that the piece in Raco Catala is sourced in part from El Periodico, hardly an anti Madrid paper. The post is dated from Aug 2003. It includes a graphic of the disbursals.

        If you do not read Catalan, I can translate the salient points:

        — The FNFF has *again* received a subsidy from the Spanish ministry of culture. This time it was for 26,690 euros for staff and updating of IT equipment.

        — contrast, a good IT set up can be had for 1,200 euros

        — The Foundation has been receiving some 40,000 euros annually for this purpose; one could assume that they have already updated all their IT equipment needs.

        — In addition, data in the Boletin Oficial del Estado indicates that the Foundation receives, annually 10% of all subsidies that the Spanish ministry of culture disburses

        Here is another link, Recuperando Memoria same topic and similar figures, this one in Spanish, May 25, 2017. https://radiorecuperandomemoria.com/2017/05/25/las-subvenciones-del-pp-a-la-fundacion-francisco-franco/

        Another, in Spanish El Periodico 2015
        http://www.elperiodico.com/es/politica/20151028/rajoy-desconoce-subvencion-fundacion-francisco-franco-4624649 where Rajoy was asked why there was no money to recover the bodies of victims of the Civil War from mass graves and roadside ditches, but there was money to fund the FNFF he responded, “I wasn’t aware” “I didn’t know” . There was quite a twitter storm after this appeared.

        There are more, but I will stop here.

        Your overall figure of 150,000 euros looks to be correct. This was done over a period of time. My point is that a Foundation such as this one should not get even one cent of public money. If private citizens want to contribute, that is their call. But not public money; not one cent. And certainly not when the population is under duress from harsh austerity measures.

        1. Basil Pesto

          As I said though, your original post gave the impression that the fnff is somehow a public or predominantly publicly funded body and remains so. As we can see, it is a private organisation. We can also see that it received some state funding for a limited period of four years from 2000-2003, with a fairly limited sum of money. It seems that you brought this up to make a political point about the Spanish government in 2017, with the implication that the Spanish government (and the non-Catalan public?) is full of fascists both lapsed and latent, which in my opinion is unfair and disingenuous with regards to the example of the FNFF which you brought up.

          As for the larger ethical point about the government providing any funding to such an organisation in the first place, generally I would agree with you. The issue is slightly complicated in my opinion though because, from what I can see, the fnff holds most if not all of Franco’s own written material. I’m sure that material has no moral value, but it does have historical value. As I pointed out, the German gov’t does fund various historical entities that preserve and archive documentation from the third reich. That’s good and something states should do I think, but in this case it’s complicated by the fact that such historical primary source material is held by a foundation that celebrates the dictator in question. The problem in this case is that the Fondacion seems to have been a bit opaque about how, precisely, the money was used so it’s hard to know for sure if the money was offered and used in good faith (although I’m not sure where the figure of €1.200 for a new IT system comes from – how could they know that that’s the appropriate amount in this case?). Given the sensitivity of the subject there should have been very precise and very public accounting about how exactly that money was spent. But yes, I can also understand your argument about “not one cent” (although, were austerity measures in place in 2003?)

    4. Reini Urban

      regarding the “run on banks. I suppose that panic may be a part of the withdrawl of funds. But I believe a larger part is blowback.”

      It was not a bank run (yet). It was a symbolic gesture. People took out EUR 155, and not everything.
      So they were clearly angry about the banks move out of state, but near enough to be still “in state”. It was a symbolic but necessary move to back their business. There’s no panic in Catalonia, but there clearly is panic in Madrid and many European headquarters, looking at the headlines in various newspapers all over. This panic started with the success of Podemus, 5 Stelle and Syriza already, and Rajoy was very lucky to have beaten Podemus in the first place with various tricks. Now with this reaction he has no chance anymore. Next elections will be Podemus all over.

  17. Altandmain

    Does anyone else expect this to backfire badly? Lots of people in Catalonia were on the fence about being an independent nation or just staying in Spain. Rajoy’s actions are going to fuel support for separatism, which is going to be the opposite of what he intended. It’s likely that even if Catalonia doesn’t get its independence, it may end up forcing the Spanish government to give greater concessions.

    Also, the credibility of the Western world is going down. The next time an authoritarian nation cracks down on their people, Western lectures about “human rights” (which are really often just a cover to give Western corporations the right to loot those nations) are going to fall on deaf ears.

    Had this been a nation like China, the EU would have come down hard on the CCP. In Spain, not so much, and this is not going to be lost on a lot of people.

    1. Yves Smith Post author

      The problem is from what I can tell, only a minority of the people voting for independence actually want independence. They just want a Basque-style budget deal, where they collect their own taxes, do their own spending, and send a much smaller remittance to Madrid. This is never going to happen due to Catalonia being much larger relative to the Spanish economy.

      So while the Catalans will deeply resent Madrid reducing its autonomy, the support for independence is lower than you’d think.

      And if you think Brexit will be bad for the UK economically, Catalonia will take a vastly bigger hit if it were to try to become independent. It’s a member of the Eurozone and would get tossed out of its payment systems. It will find it close to impossible to buy critical imports like energy. Tourism would collapse. The UK at least has border controls, even if they can’t begin to handle what Brexit would entail. Catalonia can’t begin to handle what would be required at its borders to trade with the rest of the world. It would be starting from scratch.

  18. Sluggeaux

    Am I the only one here who thinks that Puigdemont is a Bannon-esque figure running a selfish Brexit strategy? The Catalans’ main beef with Spain appears to be that their wealthy region shouldn’t have to subsidize the poorer regions of the country.

    Leaving Spain would invalidate the region’s membership in the European Union and participation in the Euro Zone. The majority (57%) of citizens of Catalonia boycotted the “vote” and the result of the referendum can hardly be considered to be legitimate. Merkel and Macron are backing Rajoy.

    The separatists look like a bunch of anti-tax xenophobes who don’t want to “share” their tourism-driven wealth with the rest of the country that they have been a part of for several centuries — and their entire lives. Sounds like Reaganism to me…

    1. MisterMr

      This is also my opinion, at least until someone explains exactly what are the real infringement on Catalan’s rights apart from taxes.

  19. Andrew Watts

    Will the separatists embark on a sustained campaign of violence?

    The Catalonian separatist movement has derived a lot of sympathy through the view that they are being treated unfairly and their referendum was brutally suppressed. The moment they start murdering people and conducting urban guerilla warfare is when goodwill will start to evaporate. It would be counter-productive unless the police/military start creating martyrs by gunning down peaceful protesters.

    Which isn’t to say it won’t happen. Although anybody who resorts to violence as a first response to any setback is generally proving themselves to be a hapless amateur and/or downright incompetent. People should also keep in mind the following quote as it is now clear who has the advantage and secured vital support for their actions.

    “Victorious warriors win first and then go to war, while defeated warriors go to war first and then seek to win.” -Sun Tzu

    Rajoy has already denounced the separatist leaders association with radicals. By blaming their actions on their radical support base any violence that breaks out will only reinforce his position and he has a tailor-made scapegoat that has already been fingered. This maneuver could potentially divide the movement.

  20. Sue

    Thanks for the even-handed article Yves. I fully disagree with the following post though:
    “Are you guys being serious with these Spanish Civil War comparisons? The Catalonian separatists are led by a bunch of wallet clutching conservatives. Their followers are mostly middle class. They’ll fold at the first sign of trouble much less violence.

    The Catalonians couldn’t even issue a proper declaration of independence. If Madrid thought they were serious it’s likely they would’ve held back on invoking Article 155. The outbreak of civil wars aren’t great for your country’s credit rating or economy.”

    If the “Catalonian are led by a bunch of wallet clutching conservatives”, how can we explain ERC and CUP?i.e ERC Junqueres is the Generalitat’s Vice-president & according to all polls ERC would be now the #1 political force in Catalonia. The political party CUP is considered by many the “anti-sytem & anti-capitalism party”. Catalonian secessionism significatively includes many ideologies, generations, etc.
    Also in regards to “the Catalonians couldn’t even issue a proper declaration of independence”. One has to be very careful here. Section 155 of Spanish Constitution (art. 155 CE) had already ( in some instances unlawfully) been applied to some degree . Remember the control of accounts and how the Spanish government halted/controlled the collecting of income taxes from la Hacienda Catalana. Recall too, how some days ago Guardia Civil and Policia Nacional beefed up the control of territorial borders practically pushing aside the Mossos d’Esquadra. I.e.: once the structures to collect taxes and the possibility to control borders are quashed, what is the practical effect a declaration of independence would have? The declaration of independence at this very present time could have a meaning not matching a practical implementation, yet its usefulness for the secessionists would fall into other effective realms.

  21. Sue

    The UE won’t intervene until starts to hurt its traced path. Many in the EU know that the Spanish Constitutional order and balance were broken many years ago by the own Spanish Government through the instruments of the Spanish State. Also they are aware of the inefficiencies and macro economic data tricks used by the Spanish Government through the bureaucracy of the State. Jokes on the accounting method to include the underground economy to the GDP numbers run around the European circles. For example, based on Spanish public servants’ accounts, employees from the Secretary of Economy went to brothels asking how much their business operations’ receipts were. Evidently, all ilegal and underground economy activity added to the GDP #s was not legalized (in the cases they could have been) for tax collection purposes and most people believe that public employees never really went to brothels to gather data. Everything very convenient to lower the nevertheless very high deficit or debt to GDP ratio. About inefficiencies: for example, many in the EU know that the construction of the Spanish new roads’ infrastructure does not follow a sound economic criteria, nor it is thought for what from a leftist perspective would be to revitalize poor areas. The new road maps have been designed to enrich the old conservative “class” (more often than not, Spanish Nationalist elites). The new rezoning, the new classification of land, has and is creating great fortunes through the properties of these powerful families. The most infamous case is how the Generalisimo Franco’s Family Estate reaps the benefits from the rezoning. I think we know how and when the EU will have to intervene. We could discuss it at another time

  22. Sue

    My reply to some of the prior posts:
    There are three left wing parties in Catalonia. Esquerra Republicana de Catalunya (ERC), CUP and Cat Si Que Es Pot. The first two are part of the independence coalition. Si Que Es Pot is clearly pro Catalunya self-determination rights, in other words, wanting a referendum. There is another party, PSC, which is the Spanish National party PSOE branch in Catalonia. Many would question PSOE or PSC truly being left wing parties and , nevertheless, PSC mayors in Catalonia municipalities are stepping down embarrassed by their party support to the upcoming 155 atrocity application.
    What is controversial in Catalonia/Spain about tax transfers is not so much the solidarity or helping another regions to thrive economically. Two are the real key issues on this matter. 1. An important bulk of tax transfers enrich the Spanish conservative elites. See my post above as an example 2. There is not transparency as to the amounts each region fiscally contributes. The consequences of this latter point are very important.

    1. Mattski

      Thanks for this, Sue; I have appreciated your posts. Could you please speak more directly to the repeated allegation that Catalan nationalism is a right-wing phenomenon? What proportion of support comes from the left? What kind of government, with how much left power, is anticipated to result from independence? Is the vision for something more democratic/progressive?

  23. RBHoughton

    Ha, well there we are, Rajoy’s instant response to an unwanted democratic decision is to reverse it! He has got EU officials (e.g. Joscka Fischer in Project Syndicate) to write publicly in support of his crackdown. I suppose anyone in a position of authority these days will be highly reluctant to be accountable democratically, even someone with Fischer’s cred.

    The thing is, as we have known all along, is democracy works in the Athenian context because the numbers are small and everyone knows everyone else. We have instead been pursuing convenience instead of democracy. We say large democracies are efficient use of resources.

    It is my belief there is no such thing as a large democracy. On the other hand the EU does not want hundreds of independent countries in Europe because the people are going to quickly become aware that what they all want is the same and its obtainable.

    So well done Catalonia. You have led the way before and you are doing it again. Salute.

  24. Synoia

    We say large democracies are efficient use of resources.

    Dis-economies of scale you say?

    Coming to you via your not-so-local MIC.

  25. Sound of the Suburbs

    The wealthy paved the way for paying less tax.

    The prosperous regions of Europe are taking up their arguments.

    The globalists shot themselves in the foot.

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