Financial Times

Spain and Catalonia fail to narrow divide over breakaway quest

By Tobias Buck in Madrid

The leaders of Spain and Catalonia launched a last-ditch attempt on Wednesday to halt an escalating confrontation over the north-east region’s political future.

The talks failed once again, however, to find common ground on the core of the conflict – a Catalan plan to hold an independence referendum later this year.

The keenly awaited meeting between Mariano Rajoy, the Spanish prime minister, and Artur Mas, the Catalan government president, was billed as one of the last opportunities to discuss a political settlement.

Mr Mas and his government say they are determined to hold a non-binding independence referendum in November to test the region’s support for a historic break with Spain.

Madrid is fiercely opposed, however, and has made clear that it regards any independence plebiscite as illegal.

Wednesday’s meeting was the first between Mr Rajoy and Mr Mas for almost a year, highlighting an erosion of trust as well as the intense pressure both leaders face from their core supporters.

It started with the frostiest of handshakes, as both men strained to look away from each other. But the Catalan president emerged from the Moncloa Palace in Madrid more than two hours later, hailing a new “climate of open dialogue” between Madrid and Barcelona – and pledging more talks in the weeks ahead.

Mr Mas said his government was not budging from its referendum plan, stressing that it enjoyed wide support in both Catalan society and the regional parliament. But he also highlighted a new list of 23 political and financial demands that he said had nothing to do with the plebiscite.

The list includes calls for an overhaul of Spain’s system of regional financing, in which Catalan tax revenue is used to subsidise poorer regions, and for a rollback of a new education law that many Catalans fear will undermine the status of the Catalan language.

Many of the demands are deeply sensitive to both sides. But they appear less intractable than Catalonia’s call for an independence referendum, and open up a potential route for Madrid and Barcelona to tackle at least some of the region’s grievances and improve the toxic political atmosphere between region and state.

“The dialogue that started today is about moving on everything else [apart from the referendum],” said Antonio Roldan, an analyst of Spanish affairs at the Eurasia Group in London. “And there is indeed a lot of room for improvement. The point is whether what Rajoy will be willing to give will be sufficient to keep Mas in power and avoid early elections [in Catalonia].”

Mr Rajoy’s office issued a statement after the meeting highlighting the country’s broader economic turnround, and detailing Madrid’s financial support measures for Catalonia in recent years.

On the independence referendum, however, it struck an uncompromising note: “[Prime minister] Rajoy made clear that the consultation is illegal, that it cannot be held, and that it won’t be held,” the statement added.

After years of economic crisis and sliding poll ratings, the Rajoy government has recently found growing cause for optimism. Hours before the meeting with Mr Mas, the national statistics office released data showing the economy grew by 0.6 per cent in the three months to June – the fastest rate of growth since the start of the crisis seven years ago.

The labour market, too, is improving, giving Mr Rajoy new hope that he can secure another victory in next year’s general election.

The Catalan leader, in contrast, went into the summit weakened by political scandal, after the father of modern-day Catalan nationalism – and his own political mentor – admitted to tax fraud. Jordi Pujol, who was Catalan president for 23 years and founded the centre-right Convergència party now led by Mr Mas, revealed last week that he had kept undisclosed bank accounts outside Spain for the past 34 years.

The revelation has damaged the standing of Catalonia’s ruling party at a critical moment in the political process – with many analysts saying the political space for a deal is shrinking rapidly.

Mr Roldan said: “Either Rajoy and Mas move really quickly, or the independence process could become irreversible. There is not much time left.”