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Spanish government give Catalan leaders five-day deadline to clarify 'declaration of independence'

11 October 2017 17:06
29 0
Spanish government give Catalan leaders five-day deadline to clarify 'declaration of independence'

Carles Puigdemont instead made only a symbolic declaration late on Tuesday, claiming a mandate to launch secession but suspending formal steps to that end.

"There was a chance Puigdemont would have made a decisive declaration, so now yields are dropping because there is room for negotiation left," said DZ Bank strategist Christian Lenk.

Spanish Prime Minister Mariano Rajoy on Wednesday, however, took the first step towards activating article 155 of the Spanish constitution, a so-called nuclear option that would allow him to suspend Catalonia's political autonomy and take over the region.

The Spanish government has now given Catalan leader Carles Puigdemont five days to say whether he declared independence or not, Spanish news agency Efe said on Wednesday.

If Puigdemont was to confirm he did declare independence, he would be given an additional three days to rectify.

Failing this, Article 155 of the constitution, which allows the central government to suspend a region's political autonomy and rule it directly, would be triggered.

Spain's benchmark IBEX closed 1.3 percent higher, outperforming the pan-European STOXX 600 index, which was unchanged on the day.

Shares in Spanish banks Sabadell and CaixaBank , which have moved their legal bases from Catalonia to other parts of Spain since an Oct. 1 independence referendum, rose 1.2 percent and 0.3 percent respectively.

The rally in Spanish stocks pushed the main global stocks index, MSCI's 47-country All-Country World Index , to a fresh record high of 493.63 points.

Spain's 10-year government bond yield - which moves inversely to the price - dropped 6 basis points to 1.64 percent, according to Tradeweb data.


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