December 22, 2017 / 11:39 AM / 6 months ago

Breakingviews - Catalonia poll delivers no Christmas joy

LONDON (Reuters Breakingviews) - Catalonia’s local elections on Thursday delivered no Christmas joy. Parties seeking to break with Spain won a majority of seats in the Catalan parliament. Their support didn’t strengthen, but it didn’t really weaken either. That suggests a fraught new year too.

FILE PHOTO: People react to results in Catalonia's regional elections at a gathering of the Catalan National Assembly (ANC) in Barcelona, Spain December 21, 2017. REUTERS/Albert Gea/File Photo - RC1FB348FEE0

Spanish Prime Minister Mariano Rajoy’s bid to impose direct rule on Catalonia and trigger early elections was a high-stakes gamble. The region’s leaders had declared independence but were in no position to achieve it, lacking a popular mandate and international support. Elections, conducted in the shadow of Madrid seizing control of public finances, could have strengthened their hand.

It didn’t. The secessionist movement, split between three parties of differing political stripes, won a majority of seats, but less than half of the votes, making it hard to argue that there is broad backing for leaving Spain. And even that parliamentary majority may prove fragile. The parties may squabble over leadership and how to achieve their desired independence. Repeat elections could follow.

This stalemate is not the worst outcome for Rajoy. But he is probably still the biggest loser. His party, the centre-right People’s Party, is losing support at a national level. And based on the elections in Catalonia, the secessionist threat will not go away unless cauterized. That means granting the region greater fiscal and political autonomy. But shifting money from less-wealthy regions to Catalonia would be tricky.

Meanwhile, Catalonia’s economy is already suffering. More than 3,000 companies have shifted headquarters out of the region. They are unlikely to return, and the continuing divisions mean other companies may defer further investment.

At a national level the effect is less clear. The Catalan furore has seen a decline in support for Podemos, a populist party that has been relatively sympathetic to the independence movement. That means there is a greater chance of either Rajoy’s party or the rival Spanish Socialist Workers Party being able to cobble together a coalition with the centrist Citizens party. Spain’s awkward period of minority rule might end. Yet if the Catalan issue is not tackled, political uncertainty will linger.

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