Bill Blain: “Catalan Separatists Made The Risk Of Spain’s Wealthiest Region Decoupling Into A High Probability Event”
“Reputations changeable, Situations Tolerable. Baby you’re adoreable.”
It’s the start of Q4 and October, always the most volatile month of the year – and it’s started with shock and surprise. Just a few years ago it would have been inconceivable Spain’s vibrant democracy might stumble towards the verge of dismemberment. But this morning…Spain bonds under pressure.. Anyone who thinks populism is dead is profoundly wrong. If it can happen in Spain… it can happen elsewhere.
Big and small political surprises define market..
What did happen yesterday?
It’s about how the story is told.
In a single day the rebels made previous legitimate constitutional and political arguments irrelevant. It looks like they drove Madrid into and through this crisis – giving them no options or opportunities for dialog, forcing them to react and successfully painting Madrid to the world as the dictatorial baddies. Now, no one is even remotely interested that the economics conclusively demonstrate what a spectacularly bad idea an independent Catalunya will be. The rebels have reset the whole debate in their favour – polarising domestic and international opinion while seeding their revolution with a couple of million votes.
The referendum was always irrelevant – although we’ll hear plenty about its legitimacy in coming days. The only thing the rebels haven’t done yet is leave even a very small window open for the Spanish to start negotiations on.
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