Spain crisis: Independent Catalonia wakes up under Madrid's control

Catalonia woke up on Saturday under the direct control of Madrid as the Spanish prime minister took drastic measures to quash secession, deposing the region's leaders and dissolving its parliament hours after lawmakers declared independence.

In a dramatic escalation of a political crisis that has stoked alarm in Europe and sent shockwaves through Spain, Mariano Rajoy also decided to call snap Catalan elections on December 21 to "restore normality" to a region in turmoil.

All eyes this weekend will be on whether Catalonia's separatist executive willingly steps down and independence supporters carry out their threat of peaceful resistance to Madrid's takeover.

In the Spanish capital, protesters were due to hit the streets today against Catalonia's declaration of independence, which while lacking any legal basis has caused strife in a region deeply divided on whether to split from Spain.

On Friday in Barcelona and other Catalan cities, thousands celebrated their regional parliament's motion for independence, which passed with 70 votes for, 10 against and two absentions in a 135-seat chamber that anti-secession MPs had deserted in protest.

Demonstrators in Barcelona broke out in ecstatic shouts of: "Independence!" as the result was announced, while separatist MPs cheered, clapped and embraced before breaking out in the Catalan anthem.
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Catalan leader Puigdemont says 'guarantees' not in place to call elections

Catalonia's leader Carles Puigdemont on Thursday said he had considered calling elections in an effort to ease the separatist crisis as Madrid prepares to seize control of the region, but decided there were no "guarantees" to do so.

In a televised statement, he said it was now "up to the (regional) parliament," which is expected to meet later today, to decide on how to respond to the central government's planned takeover of Catalan political powers following an outlawed independence referendum.
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Catalonia, Spain and the economic consequences of a split

The prospect of Catalonia seceding from Spain has never looked closer. Following a messy referendum vote on the matter (which the Spanish government refused to recognise but sent police in to prevent from taking place) and a series of protests, there seems to be a real possibility of a split taking place. But what might the economic consequences be?

In terms of size and population, Catalonia is comparable to several European countries, such as Switzerland. Although it has 16% of the Spanish population, it generates 19% of Spain’s GDP and 25% of its exports. Its GDP per person is currently 14% higher than the EU average (but slightly below that of other regions of Spain such as the Madrid region, the Basque Country and Navarra). Meanwhile, the rest of Spain has a GDP per person of about 10%-15% below the EU average. Unemployment is also lower in Catalonia than in the rest of Spain, and similar to that of the region of Madrid.

This means that Catalonia, as well as the new Spanish state that emerges from a split, could be perfectly viable countries on their own. There would, of course, be economic consequences for both following a split – but this may be worse in the short-term than the long-term.
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