Deutsche Börse Group – Spain Says It Will Stop Catalan Referendum On Independence

Spain’s deputy prime minister said Thursday that the Spanish government was prepared to stop the region of Catalonia from holding a referendum on independence.

“There are legal and constitutional instruments to stop it, and this government is prepared to use them,” the deputy prime minister Soraya Saenz de Santamaria told a press conference here.

Earlier this week, Artur Mas, Catalonia’s president, called for elections on November 25 and said he wanted to “consult the will of the Catalonian people” about the possible creation of an independent state.

The call for the snap election capped a week of acrimony between Mas and Spain’s Prime Minister Mariano Rajoy after Rajoy rejected Mas’s demand to allow Catalonia to levy its own taxes.

Catalonia represents one-fifth of Spain’s economic output and has long complained that, aside from its cultural differences with the rest of Spain, it contributes much more to the central government than it gets back.

Mas’s government recently requested a E5 billion bridge loan from an E18 billion liquidity fund Madrid has established to help the country’s indebted regions. Catalonia sends 9% of its GDP to the central government for redistribution to other regions of Spain, and it argues that is the reason for its current financial predicament.

Spain’s Finance Minister Cristobal Montoro said Thursday that the new E18 billion fund is now operational and that Catalonia would be its first beneficiary.

Read article @ MNI – Deutsche Börse Group