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Can Catalonia do a Scotland?

Monday, September 29, 2014 - 02:20

Scotland may be staying in the UK but Spain's fight to keep Catalonia is far from over. As Sonia Legg reports, the region has voted to hold a November vote on independence which the government is hoping to prevent.

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The response was expected - the Spanish government has no intention of letting one of its wealthiest regions set up on its own. Ministers will be asking the constitutional court to declare Catalonia's planned vote on independence illegal. (SOUNDBITE) (Spanish) MARIANO RAJOY, SPAIN'S PRIME MINISTER, SAYING: "It is wrong to give one region the right to vote while denying it to the rest of the nation. The referendum is deeply undemocratic." The move followed a declaration at the weekend by the President of Catalonia. Artur Mas signed a decree calling for a Scotland-style vote on November 9. (SOUNDBITE) (Spanish) ARTUR MAS, PRESIDENT OF REGION OF CATALONIA, SAYING: "The links of brotherhood that bind us to the other peoples of Spain are intense and deep. But Catalonia wants to speak, it wants to be heard, it wants to vote." Barcelona is the capital of Catalonia - and the region accounts for around a fifth of Spain's economy. It has its own language and a distinct culture. Madrid's refusal to allow a vote has angered many - even some in favour of keeping Spain together. (SOUNDBITE)(Spanish) MADRID RESIDENT, FRANCISCO JAVIER, SAYING: "I think that, just like Scotland, the moment they get the go ahead to do it, they will no longer feel the need to do it, but I don't think it is a good idea to ban it." (SOUNDBITE) (Spanish) BARCELONA RESIDENT ELISENDA VICENTE, SAYING: "I think they should allow the referendum, at least just to know what people want to do, whether the answer is 'yes' or 'no'." Markets have largely ignored the threat - with Spanish sovereign debt hovering at near 10 year lows. But that was also the case in Scotland....to begin with. Nomura's Alastair Newtown says investors could be in for a shock. (SOUNDBITE) (English) ALASTAIR NEWTON, SENIOR ANALYST, NOMURA: "We could see a significant upward shift in the yield curve if we see a constitutional crisis bearing in mind this issue of Catalonia independence at the heart of it is the question of fiscal transfers from Barcelona to Madrid and the bottom line is, without those transfers at something like the current level Madrid cannot service its sovereign debt obligations." That could spill over into equity markets too. And it might not end there - Portuguese and French banks have significant exposure to Spain. And Italy too tends to catch cold if Spain sneezes. It all makes the stakes very high - and Spain's government clearly isn't prepared to gamble the way the UK did.

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Can Catalonia do a Scotland?

Monday, September 29, 2014 - 02:20