testers hold Catalan flags, also known as the Senyera, during a demonstration against the Spanish government. (Photographer: Angel Garcia/Bloomberg)

Crushing Catalan Separatists Causes Alarm for Rajoy's Allies

(Bloomberg) -- Spain’s plan to crush Catalonia’s separatists is ringing alarm bells among some of Prime Minister Mariano Rajoy’s allies before what’s set to be a decisive few days in the conflict with the insurgent region.

The Socialists are balking at the government’s focus on taking control of the administration in Barcelona while shutting off options that would allow the Catalan leadership a dignified retreat, according to two people with knowledge of their discussions. 

Crushing Catalan Separatists Causes Alarm for Rajoy's Allies

The biggest opposition party in the Spanish Parliament, they have backed Rajoy and his minority government so far, but the party’s top brass voiced concerns in a meeting Tuesday that the conflict will escalate unnecessarily if the Catalans are given no room to maneuver, one of the people said. They asked not to be identified by name when discussing internal matters.

The tension adds another layer of intrigue to Spain’s most dramatic political crisis for almost four decades. The legislature in Barcelona will convene at 10 a.m. on Thursday and the separatists will decide whether to go all-out and declare independence. A Senate vote a day later likely will grant Rajoy the authority he’s seeking for his crackdown.

"It seems unlikely that the Catalan government will backtrack, at least under the conditions set by the government, because the grassroots would kill them," said Jose Ramon Caso, a lawmaker in the 1980s for a now-defunct party and adviser to a former prime minister. "The Catalans seem to be willing to suffer a defeat now with the aim of winning in the long run."

Spanish bonds rose for a fourth day, their longest winning stretch since the illegal referendum on Oct. 1 started a new chapter in the Catalan drama. The extra yield investors demand to hold Spanish 10-year debt instead of similarly dated German bunds narrowed by 4 basis point to 114 basis points at 9:26 p.m.

Article 155

The Socialists are under pressure from within their ranks to soften the approach. One former minister, a Catalan, this week quit the party’s national executive in protest at its decision to support Rajoy’s draconian proposal to use constitutional powers to seize control of the region.

The Catalan leadership is planning to mobilize a human shield to block efforts to implement any reassertion of authority under Article 155, the passage in the Spanish Constitution that allows Madrid to bring any rebellious region to heel. Written following the death of General Francisco Franco in the 1970s, it forbids secession from Spain.

“We have to restore the rule of law -- that’s why we’ve set in motion Article 155,” Rajoy told lawmakers in the national parliament on Wednesday. “We would like to see elections as soon as possible, a vote held with all legal guarantees -- unlike the unfortunate situation we saw with the referendum.”

With Catalan businesses decamping, tourist numbers dropping and Spain’s chief prosecutor warning of a 30-year jail term, the separatist leaders have been sending mixed signals. 

After rejecting several invitations to make his case to the Spanish Parliament since taking office in January last year, Catalan President Carles Puigdemont may address the Senate as part of the Article 155 debate, his spokesman said Tuesday.

In another apparent gesture of conciliation, Joan Tarda, a separatist lawmaker in the national parliament, acknowledged this week that his colleagues in Barcelona bent the rules when they forced through their referendum law last month. Puigdemont says the result of the illegal vote on Oct. 1 gives him the mandate to establish an independent Catalan republic.

The rebels have been assuming that they’d be able to dodge the full effect of Article 155 by calling regional elections under Spanish voting law at the last minute, even though they’d incur the wrath of hardliners on the streets.

But the option of a climb-down may be closing. Pablo Casado, a spokesman for Rajoy’s People’s Party, said on Tuesday that even if Puigdemont were to call a snap regional election, it now wouldn’t be enough to halt the implementation of Article 155.

“If Mr Puigdemont calls new regional elections under the Constitution, there’s no need to go to Article 155,” Ander Gil, the Socialists’ leader in the Senate, said in a radio interview. “We are surprised that in the last 24 hours the government has started to say something different from what we talked about.”

Air Cover

That position exposes further the tensions between Rajoy and the Socialists. Miquel Iceta, the leader of the Catalan division of the Socialist Party, said that a new election should be seen as a concession and Rajoy should hold off.

The backing of the Socialists and the Ciudadanos party allowed the prime minister to claim he was leading a broad consensus, crucial political cover before taking action that would invite a backlash among many Catalans.

Rajoy held a series of meetings with Socialist leader Pedro Sanchez and Albert Rivera of Ciudadanos before deciding to use the wide-ranging -- though untested -- powers of Article 155. The three parties together have 250 of the 350 seats in the Madrid parliament.

Sanchez told Rajoy in their talks that the Socialists would not support him using Article 155 if the Catalan government retreated from its claim to independence, one of the people familiar with the discussions said.

"After many doubts, the Socialists and the PP have reached an agreement to apply the constitution in the face of a threat to the state," said Josep Pique, a former PP government minister under Jose Maria Aznar, and a Catalan. "That’s compatible with differences of opinion between the parties, and indeed within the PP. They need to be able to manage those differences, and I think they will be able to.”

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