by Thomas Wash
On October 27, Spanish Prime Minister Mariano Rajoy triggered Article 155 of Spain’s constitution. This allowed him to dissolve the Catalan Parliament, also known as the Generalitat, and hold new regional elections on December 21, 2017. Tensions between the Catalan government and the Spanish government reached a boiling point following the Catalan government’s decision to hold an illegal referendum for Catalan independence on October 1.
On the day of the referendum, Prime Minister Rajoy ordered the national police and the civil guards to close polling stations by any means necessary. Images of the violent clashes between voters and Spanish authorities circulated around the world, without denouncement from the European Union. Following the results of the referendum, in which the Catalan government claimed that 90% of Catalans voted to leave Spain, Catalan President Carles Puigdemont vowed to begin the process of Catalan secession. Spanish equity markets have been volatile since the referendum, but have recently calmed after an agreement between the Catalan political parties to take part in the new election.
In Part I, we will discuss the history of Catalonia. We will give a broad overview of how the Spanish state was created, look at its history under Spanish rule and close with a summary of the revival of the Catalan independence movement. Next week, in Part II, we will look into the current constitutional crisis as a result of the referendum and conclude with market ramifications.