Spain expected to suspend Catalan autonomy as Puigdemont refuses to back down

Spanish prime minister Mariano Rajoy is expected to press ahead with Article 155 to suspend autonomy for Catalonia after regional president Carles Puigdemont refused to revoke his suspended declaration of independence.

The Madrid government had set a deadline of 10:00 local time on Thursday for a response from the head of the Generalitat, who provided a last-minute letter addressed to Rajoy.

Puigdemont said that the referendum on 1 October had created a mandate for independence in the region and that the regional parliament might hold a formal vote on the issue. He also criticised the government’s attitude towards the crisis.

"The suspension (of independence) remains in effect," Puigdemont wrote. "The decision to apply Article 155 rests with the government, with approval fro the Senate. Despite all the efforts and our willingness for dialogue, the fact that the only response is the suspension of autonomy shows that it is not aware of the problem and it does not want to talk."

Interestingly, Puigdemont’s letter also made reference to Brexit, pointing to the fact that the percentage in favour of Catalan independence was superior to that which voted for the UK to exit the EU.

The Spanish government responded by reiterating its plans to follow through with Article 155, which allows Spain to suspend autonomy of one of its regions, in whole or in part, if it does not comply with the constitution.

"Without a clear and precise response, he understands that he has not fulfilled the requirement," said spokesperson Íñigo Méndez de Vigo.

He added that the government and opposition will convene on Saturday to fulfill the next steps of the Article, "in order to protect the general interests of Spaniards and restore constitutional order."

Thursday’s events jolted to European equities, according to IG analyst Chris Beauchamp.

"The shock news jolted equities out of their lazy drift higher, with a swift drop doubtless shaking a few of the tardy newcomers out of their longs and giving bears something to roar about, even if their moment was brief."