Spain’s constitutional court tried to pre-empt an independence declaration today by suspending a Catalan parliament session planned for Monday.
An earlier ruling by the court aimed at stopping last Sunday’s independence referendum was ignored by Catalonia’s leaders, however, and so far the region’s politicians have also dismissed Spanish PM Mariano Rajoy’s call to drop plans for a unilateral declaration, the BBC says.
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Spain’s constitutional crisis has shaken the common currency and hit Spanish stocks and bonds, with Madrid’s borrowing costs reaching their highest levels since March on Wednesday, Reuters reports.
“The cost of insuring against potential losses on Spanish bank debt and Spanish, Italian and Portuguese sovereign debt has also jumped, suggesting an impact on the wider eurozone,” Reuters adds.
Some analysts predicted that a drop in the euro would follow a call for independence.
“If the Catalonia referendum goes ahead, we expect this to be a disruptive event for the euro, with the potential for a sharp decline of up to 5% initially in the single currency if the separatists win,” Kathleen Brooks, research director at City Index, told the Daily Express last week.
Franz Buscha, professor of economics at Westminster Business School, said the Catalan crisis has “deepened cracks in the EU’s plan for greater integration”. Bloomberg Businessweek says Catalonia’s struggle for independence may only be the beginning of similar movements across Europe.
“Another rupture may be sneaking up on Europe, driven by a similar mixture of pent-up anger and short-term political manoeuvring”, claims the website.