Dr Ralph Solveen at Commerzbank writes that...>

SPAIN: Dr Ralph Solveen at Commerzbank writes that the risk of Spain defaulting

as a result of the Catalan situation is minimal and that market access would

"probably only be jeopardised if the political unrest led to a recession and

doubts also arose about the effectiveness of ECB support."

- For Catalonia risks are greater. Commerzbank makes the point that if article

155 were activated, the Madrid government "would probably be liable for the

autonomous regions debts". But if Catalonia declares independence it can get

very messy.

- "Two thirds of Catalonia's debt (E52.5bn) is with the liquidity funds for

autonomous regions (FLA) which the central government set up in 2012 to finance

regions which had been cut off from capital markets. The extension of

outstanding bank loans to the region also requires Madrid approval since EFSF

support was given in 2012"