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Catalan Leaders to be Ousted as Rajoy Aims at Separatists

Bloomberg logo Bloomberg 10/21/2017 Charles Penty, Maria Tadeo and Esteban Duarte
People wait to watch the delayed sesion of the Catalonian regional parliament on a giant screen at a pro-independence rally in Barcelona: People wait to watch the delayed session of the Catalan regional parliament on a giant screen at a pro-independence rally in Barcelona, Spain, October 10, 2017. Catalonia's bid for independence

Photo gallery by Reuters

(Bloomberg) -- Prime Minister Mariano Rajoy invoked the most far-reaching powers in the Spanish Constitution as he aimed to strike a decisive blow against the Catalan separatist campaign that has divided the nation and put its economic expansion at risk.

Spain will dismiss Catalan President Carles Puigdemont and the rest of his regional government as part of a barrage of actions under Article 155 of the Constitution, Rajoy said at a press conference in Madrid Saturday. The decision has to be ratified by a vote in the Senate, potentially within a week.

Mariano Rajoy wearing a suit and tie: Reaction As Madrid Finalizes Plans For Taking Control Of Catalonia © Bloomberg Reaction As Madrid Finalizes Plans For Taking Control Of Catalonia

Mariano Rajoy in Madrid on Oct. 21.

Ministries in Madrid will take over the management of the Catalan administration, including the regional police force and its public television and radio channels, while the prime minister will have the power to dissolve the regional legislature. He said he aims to trigger fresh elections within six months.

“We are going to work to return to normality,” Rajoy said at a news conference in Madrid after a cabinet meeting. “We are going to work so that all Catalans can feel united and participate in a common project in Europe and the world that has been known for centuries as Spain.”

The decision brings the Catalan crisis to a new intensity, as the prime minister seeks to put down an unprecedented constitutional rebellion with untested legal weaponry. While Rajoy has the law, most of the country and ultimately the army at his back, the Catalan separatists are counting on widespread support from regional officials and an extensive network of activists who’ve drawn up plans for guerrilla action against foreign companies and critical infrastructure.

To read more about the risks that Rajoy’s plan may face, click here

Catalan institutions have flouted the authority of the Spanish state since legislating for a referendum on independence on Sept. 6. Despite a series of rulings from the courts, regional officials went ahead with that vote amid a violent police crackdown, waving away complaints about widespread irregularities to declare victory. Separatist leaders in the Catalan Parliament will meet Monday to discuss a date for a unilateral declaration of independence, according to a person familiar with their plans.

“This is a serious attack on the rights and freedoms of all people, here and everywhere,” Barcelona Mayor Ada Colau, who backs the Catalans right to vote, but hasn’t called for independence, said on Twitter. Puigdemont is due to speak at 9 p.m.

Rajoy’s decision may be a watershed moment for Spain and its 1.1 trillion euro ($1.3 trillion) economy, which counts on Catalonia for a fifth of its output. Hundreds of companies have already set up headquarters elsewhere in the country to avoid the developing legal limbo and the government has cut its growth forecast for next year, citing the disruption in Catalonia.

For a guide to Article 155 of the Spanish Constitution, click here

“Rajoy is showing the Catalans that the intervention has a clear time limit,” said Narciso Michavila, the chairman of polling company GAD3, which has done consultancy work for Rajoy’s People’s Party. “He is clearing up some people’s concerns about a long-term intervention.”

Rajoy thanked two opposition parties, the Socialists and Ciudadanos, for their support for the measures. Between them, those groups have 250 out of the 350 seats in the national parliament. Rajoy said there’s no way now that the measures can be halted, unless the Senate votes against them.

The Senate will reconvene next week to process, debate and ultimately vote on the implementation of Article 155. The debate is set to start Thursday at 5 p.m. Madrid time and go into Friday morning. After that, the government could begin to apply the new measures.

Rajoy said he wanted no more companies to take their registered offices out of Catalonia or for savers to take their savings from banks in the region. Major Barcelona-based companies including CaixaBank SA and Gas Natural SDG SA have moved their legal base out of the region because of the political uncertainty.

The independence struggle has thrust Catalonia onto the world stage, casting the regional capital Barcelona in a fresh and dramatic light. Spain’s second-biggest city, a tourist hub and a major port on the Mediterranean, has been filled with hundreds of thousands of demonstrators, and thousands of police, at key moments in the battle.

Separatists called supporters to a demonstration in the regional capital at 5 p.m. and Puigdemont planned to attend.

--With assistance from Kevin Costelloe and James Regan 

To contact the reporters on this story: Charles Penty in Madrid at cpenty@bloomberg.net, Maria Tadeo in Madrid at mtadeo@bloomberg.net, Esteban Duarte in Madrid at eduarterubia@bloomberg.net.

To contact the editors responsible for this story: Alan Crawford at acrawford6@bloomberg.net, Ben Sills, Steve Geimann

©2017 Bloomberg L.P.

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