Failed Catalan Government Makes Another Spanish Election More Likely

Catalan far-left party CUP said on Sunday it would not support acting regional head Artur Mas in his bid for another term, forcing new local elections and increasing the likelihood all Spaniards may have to return to the ballot box this year.

The drawn-out process of forming a government in Catalonia echoes the political stalemate gripping Spain at a national level following an inconclusive general election two weeks ago.

The prospect of new elections in Catalonia, most likely in March, increases the likelihood of a second general election this year as the receding threat of a strong Catalan government seeking a split from Spain will reduce pressure on Prime Minister Mariano Rajoy’s centre-right People’s Party (PP) and the opposition Socialists to form a grand coalition to stand up to a separatist Catalan administration.

At the same time, pro-independence Catalan parties with seats in Spain’s parliament will now be less likely to support a coalition government that does not allow a referendum as they begin campaigning for another round of regional elections on a separatist platform.

CUP, a fringe anti-capitalist party which rejects Catalan membership of NATO and the European Union, has held the key to the formation of the regional government since September elections awarded a majority to pro-independence parties, but it has repeatedly rejected the candidature of Mas, who heads a centre-right, business-friendly party.

Reuters

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Former Craig

Former Craig

Former Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.