Trial now
AUDUSD TECHS

Remains Vulnerable

US

Pres Biden Budget Proposal Ests

EURJPY TECHS

Needle Still Points South

USDJPY TECHS

Resistance Remains Intact

FED

Reverse Repo Operation

--Vote Could Weaken Rajoy Government Further
By Jack Duffy
     PARIS (MNI) - Catalonia's independence referendum will go ahead on Sunday
despite the Spanish government's all-out legal efforts to stop it,
pro-independence lawmakers told Market News International.
     "There may be two million people on the street on Sunday morning at 9 am
when voting begins. How do you stop that?" Ramon Tremosa, a Catalan EU lawmaker
told MNI in an interview. "There is not enough military or Spanish police to
stop that," he said.
     Spain's Constitutional Court has ruled that the referendum is illegal and
Prime Minister Mariano Rajoy has used the full force of the state to block the
vote. Police have seized ballot boxes, arrested Catalan officials and police
from across the country have been deployed around the region to prevent voters
from entering polling stations on Sunday. 
     Tremosa said that with 6,000 polling stations scattered across 1,000
Catalan cities, towns and villages, it won't be enough. 
     "They can't block them all and the more they repress -- shutting web sites,
arresting people for printing and hanging posters -- the more they are enlarging
the pro-independence vote," he said.  
     Spanish debt markets have so far been relatively calm about the vote,
although Catalan bonds have weakened, with yield spreads relative to Spanish
government bonds widening to 277 basis points from around 225 in July for bonds
maturing in 2020.
     A vote on Sunday followed by a statement of Catalan independence could
shake an already wobbly Rajoy government, however, and inject a new premium for
political instability into Spanish yields, traders warn.
     Rajoy's vulnerability was underscored last week when his government failed
to produce a 2018 budget, acknowledging it did not have the votes to pass it.
     Josep Maria Terricabras, a deputy for the Catalan pro-independence party
Esquerra Republicana, said the Catalan government would move quickly whatever
the result of Sunday's vote.
     "Two days after the official result, if it is 'Yes,' we will say that we
consider ourselves an independent country. Then there will be a negotiation with
Spain and with the international community and only then will come the
proclamation of independence," Terricabras said in an interview with MNI
     "If the vote result is 'No,' our government will accept that it has been
defeated and we will go immediately for new elections," he said.
     One key element of the vote, if it occurs, will be turnout. In a nonbinding
ballot in November 2014, about 2.2 million of 5.4 million eligible voters took
part, and about 80% favoured independence. If the Spanish government succeeds in
suppressing turnout well below that level, the result could have little overall
impact. 
     Terricabras said that even if the vote is suppressed it won't be the end of
the issue for most Catalans.  
     "We have tried for years and years to negotiate and now there is no other
possibility for us," he said. "The question is not if but when because I see no
way back."
--MNI Paris Bureau; tel: +33 1-42-71-55-41; email: jack.duffy@marketnews.com
--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com
[TOPICS: M$E$$$,M$S$$$,M$X$$$,MC$$$$,MT$$$$,MX$$$$,M$$FI$,MFX$$$,MGX$$$]
MNI London Bureau | +44 203-865-3812 | les.commons@marketnews.com