Spain lurched further towards a full-blown constitutional crisis as Catalonia announced a snap election, potentially opening the way for the country's most economically important region to declare independence from Madrid.
The government of Mariano Rajoy vowed to stand firm against a drive by Catalonia for secession as the Spanish leader faces the most critical period of his premiership. “The hour has come to exercise our right to self rule”, said Artur Mas, Catalonia’s president. He called the vote, which is likely to be cast as a proxy referendum on Catalan independence, after Mr Rajoy last week rejected his demands for greater fiscal autonomy, triggering a wave of nationalist sentiment in the northern region.
As Madrid faces increasing pressure from markets to request a European bailout, the Rajoy government, which will announce Spain’s budget for next year on Thursday, was also dealt a blow by data that showed it is likely to miss budget deficit targets agreed with Brussels for this year. Meanwhile, Andalucía, Spain’s most populous region, signalled it would apply for a €4.9 billion central government bailout, following Catalonia and Valencia as the country’s autonomous regions struggle to pay for public services and refinance their debts.
Catalonia, which represents about a fifth of Spain’s gross domestic product, is the country’s most indebted region, and has been forced to embark on a swingeing austerity programme and request a €5 billion credit line from the central government to cover its debt maturities.
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