By Marias Tadeo, Esteban Duarte and Angeline Benoit | Bloomberg News

Spain’s government said it stood ready to intervene and reassert control over Catalonia, warning that the rebel region risks economic chaos if it presses ahead with its bid for independence.

As the standoff enters a critical few days, Deputy Prime Minister Soraya Saenz de Santamaría said ministers were prepared to stop Catalan President Carles Puigdemont. Spanish Energy Minister Alvaro Nadal said the push to break away is doing more damage to the Catalan economy than August’s terrorist attacks as companies decamp.

“If this man unilaterally declares independence, measures will have to be taken and the government will take measures,” Sáenz told Spanish radio. She said action would be taken even if the government doesn’t win cross-party backing. “We will seek support, but the act will not be left without a response from the government.”

After a weekend of mass demonstrations in favor of Spanish unity, the country was braced for escalation of a crisis that threatens the breakup of a European sovereign state. With the risk of turmoil rippling beyond Spain, German Chancellor Angela Merkel spoke with Prime Minister Mariano Rajoy, reaffirming her support for Spanish unity and discussing ways to strengthen dialogue between Madrid and Barcelona.

Puigdemont has vowed to press ahead with his independence drive and is due to address the regional Parliament Tuesday. Rajoy, who will address the Spanish parliament on Wednesday, pledged that “national unity will be maintained” by using all instruments available to him. That includes suspending the regional administration and sending in security forces.

“The risk of this getting a lot worse, with correspondingly bad market development for Spanish assets, is still too great for my risk appetite,” said Erik Nielsen, chief economist at UniCredit. He predicted at least another week of pressure on Spanish and Catalan debt and …read more

Source:: The Mercury News – Politics

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