Catalan Separatist Victory Fails to Calm Struggle With Spain

(Bloomberg) -- Deposed Catalan President Carles Puigdemont demanded the Spanish government recognize his victory in Thursday’s regional election and drop an arrest warrant, to let him end a self-imposed exile in Belgium and return to power.

Prime Minister Mariano Rajoy refused. He said only the courts could deal with arrests and if he should meet anyone, it’s the head of the pro-Spain Ciudadanos party, the top vote-getter. While separatist groups won 47.5 percent of the vote, they secured a parliamentary majority. Talks have yet to begin on forming a new Catalan government from its splintered parties.

“I need to talk to whoever holds the presidency of the Catalan government,” Rajoy said in a press briefing in Madrid. “For that, he needs to take his seat in parliament, win a vote and be in a position to talk to me.” 

The comments, made almost 1,000 miles apart, failed to narrow positions of the top protagonists in Spain’s secessionist battle or protect Puigdemont from jail should he cross the Spanish border. They came hours after the surprising strength of rebel candidates in Catalonia’s region election dealt a blow to the anti-independence strategy of Rajoy.

The yield spread of Spanish 10-year bonds over comparable German securities, a measure of the risk of investing in Spain, was little changed after earlier rising as much as seven basis points to 1.12 percent from a four-month closing low the previous day.

Rajoy’s People’s Party took a hammering. It lost eight of its 11 lawmakers as voters opposed to secession shifted to Ciudadanos, which has been demanding harsher measures against the separatist push. Puigdemont’s party and two other separatist groups claimed 70 seats in the 135-strong regional assembly and are set to restore a majority they lost in October when it was dismissed.

Rajoy played down their success, pointing to the pro-constitution Ciudadanos, which won 25 percent.

“I should sit down with the person who won the elections, who is Ines Arrimadas," of Ciudadanos, Rajoy said, when asked if he considers Puigdemont’s party valid for talks.

The one-time journalist, speaking from Brussels, said he would return to Spain “to be sworn in, if the right guarantees are offered.” Rajoy also must withdraw all the police reinforcements that have been sent to Catalonia since September and not make any new decisions for its regional government, he demanded.

In October, Rajoy used Article 155 of the constitution to oust the rebel administration before it could put a declaration of independence into effect in Catalonia, which accounts for about one-fifth of Spain’s economy.

For analysis of the vote, check out the TOPLive blog

After the illegal declaration of independence, Puigdemont fled to Brussels with a small group of aides to avoid imprisonment. His vice-president, Oriol Junqueras, and other secessionist leaders have been jailed as the Supreme Court investigates the process that led to the independence declaration. Still, Junqueras and other prisoners ran in Thursday’s elections and have also been elected.

The result doesn’t bring real independence any closer than it was at the end of October. But it exposes the flaws in Rajoy’s strategy and the divisions in Catalan society, testing international support again for his hardline approach.

“This is the moment, both for the separatists and for the Spanish government, to begin talks again,” Elmar Brok, a German lawmaker in the European Parliament and ally of Chancellor Angela Merkel, said in an interview on Deutschlandfunk radio. “This is not a broad mandate for Catalonian independence and that’s why a serious effort should now be made to find a solution that is fair for everyone.”

--With assistance from Esteban Duarte

To contact the reporters on this story: Rodrigo Orihuela in Madrid at rorihuela@bloomberg.net, Thomas Gualtieri in Madrid at tgualtieri@bloomberg.net, Todd White in Madrid at twhite2@bloomberg.net.

To contact the editors responsible for this story: Ben Sills at bsills@bloomberg.net, Charles Penty at cpenty@bloomberg.net.

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