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After Spain nixes new fiscal deal, Catalonia considers independence push

Spain's prime minister refused to renegotiate a fiscal deal governing the Catalonian region's payments to Madrid, arguing that all regional governments will then follow suit.

By Correspondent / September 20, 2012

A huge 'Estelada' flag, used by Catalan independence seekers, is held during a demonstration on Catalan National Day in Barcelona, Spain, Sept. 11.

Gustau Nacarino/Reuters/File

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Madrid

As if Spain didn’t have enough to contend with amid a dire economic crisis, record unemployment, social turmoil, and fading diplomatic clout, it’s now facing the destabilizing threat of breaking apart.

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Catalonia, the second most-powerful hub in the country after Madrid and home to the industrial capital of Barcelona, has embarked on a path to secede from Spain. But many see this push as a dangerous move at a time when a weakened Madrid is struggling to meet the needs of all of Spain, particularly its poorer regions.

“It didn’t go well,” said Artur Mas, president of the regional government of Catalonia, following a closely watched meeting Thursday in Madrid with Spanish Prime Minister Mariano Rajoy to discuss renegotiating a fiscal agreement as a precursor to seeking independence.

“Rajoy’s answer was no, that there is no margin, and we can’t knock our head against the wall,” Mr. Mas said. After giving up on negotiations, Mas suggested Catalonia will now move its regional elections ahead for sometime this year in a risky attempt to secure popular support for an independence drive.

The Catalonian challenge has opened a Pandora’s box, and nobody knows how or when it will end. Some believe it’s all just part of a decades-old game to extract more self-rule concessions from the central government, specifically full “fiscal sovereignty.”

“This is a dead-end street,” says Emilio Campmany, a history and law professor in the Universidad Complutense de Madrid and part of the Strategic Studies Group, a Madrid-based think tank. “The biggest obstacle for Catalonia is not political, but a question of money. The government would not be able to meet its obligations without Catalonia.”

The government of Catalonia in August formally requested €5 billion from the central government regional rescue fund to meet its obligations for the remainder of the year. A pending question is how this request will fit into broader sovereignty talks.

Others, though, warn this is the real thing and that Spain’s territorial integrity is in danger. Indeed, in a very rare incursion into politics, unheard-of since a failed coup in 1981, King Juan Carlos, without directly naming Catalonia, severely scolded political leaders for taking advantage of the country’s economic and diplomatic woes to advance their own agenda.

“This is decisive moment for the future of Europe and Spain. Under these circumstances, the worst thing we can do is to divide our strength, encourage dissensions, follow pipe dreams, and deepen wounds,” the king said in an open letter published Tuesday.

The biggest fear is that if the central government yields to Catalonia now, all regional governments will demand the same treatment. “The question is if other regions would demand the same,” says Carlos Ruíz Miguel, a constitutional law professor in Santiago de Compostela University and an expert on Spain’s decentralization. “A unilateral solution for Catalonia would be unconstitutional.”

Already most candidates in the regional Basque elections planned for October have said they don’t support seeking independence just yet, but the top contender suggested he intends to renegotiate for more self-rule.

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