September 28, 2017

Executive Summary

Heightened political tensions, street protests, and strikes by labor organizations will probably persist in Spain's Catalonia region over the coming several weeks as the regional administration in Barcelona pursues its goal of holding a referendum on independence.  With the plebiscite currently slated for Oct. 1, the government in Madrid has taken a number of controversial steps to prevent the vote, drawing push-back from Catalonian President Charles Puigdemont and pro-independence activists. Nevertheless, while the frequency and size of demonstrations by referendum advocates may increase as the appointed date approaches, the situation is highly unlikely to deteriorate to the point where it poses a direct threat to foreign companies or travelers in Catalonia.

Key Judgments

  • Demonstrations around the issue of independence will likely intensify ahead of, and around the Oct. 1 referendum.
  • Neither officials nor activists have expressed any desire to impact foreign travelers or businesses directly around the referendum campaign, and routine security precautions should mitigate any indirect threats from civil unrest.
  • As with previous independence referendum campaigns in Catalonia, activism will likely diminish in the weeks following the vote. 

The Referendum

The initial stages of the latest dispute between Madrid and Barcelona emerged in June, when members of the Catalonian regional government began calling for a referendum on independence. The measure was subsequently approved in the regional parliament during September, with the plebiscite set for Oct. 1. Under a bill passed in the Catalonian legislature at the same time, the referendum was to be binding with a simple majority vote.

The central government in Madrid maintains that the referendum is illegal under the Spanish Constitution, and the associated bill is prohibited under the statutes governing Catalonia's autonomy. This position was upheld in Spain's Constitutional Court Sept. 7, when it issued a ruling suspending the self-determination poll.  The court also forbade Catalonian officials and media from participating in preparations for the vote. Spain has a longstanding policy of refusing to permit or negotiate on the issue of Catalonian self-rule referendums.

In response to increasing pro-independence rallies, as well as Catalonian President Charles Puigdemont's rejection of the Constitutional Court's decision and his insistence that the referendum will take place as scheduled, the Spanish government took additional steps to prevent the vote: Spanish Civil Guards confiscated ballot papers and instructional materials, and police were ordered to block voting stations. Madrid also moved to suspend direct government transfers to Barcelona, opting to pay civil servants directly, though has refrained from implementing Article 155 of the Spanish Constitution - which would suspend Catalan autonomy. However, Spanish police raided Catalonian government offices Sept. 20 and detained 14 high-ranking officials, immediately prompting thousands of protesters to flood into the streets of Barcelona and other major cities in the region. The federal government also deployed 3,000-4,000 additional police from other parts of Spain to Catalonia. Moreover, the Catalonian regional police, known as the Mossos d'Esquadra, have been temporarily placed under a new chain of command directly controlled by the Ministry of the Interior. These moves have escalated tensions and will almost certainly prompt new demonstrations as Oct. 1 approaches.

The ongoing political stand-off will almost certainly remain at the governmental level, generally presenting only ancillary implications for business operations in the form of transport or travel disruptions, or occasional damage to property near protest venues. Protests have been large, numbering in the thousands to tens of thousands, but mostly peaceful. State bodies and pro-independence activists have not deliberately targeted foreign interests or individuals in any way, and there is no logical reason why this should change; most international players, including the US and EU, have taken a position of non-interference, declaring the issue of Catalonian self-determination to be an internal matter for Spain. In this context, the risk to foreign businesses and travelers is primarily a background one; the standard commonsense security precautions that would normally be used to mitigate the risk of incidental property damage or personal injury in a temporary civil disturbance environment should suffice.

 Sporadic tensions over the issue of Catalonian independence are nothing new in Spain. The country has seen similar referendums take place on several occasions over the past decade, including in 2009, 2011, and 2014. Mass demonstrations in support of home rule also occurred in 2010 and 2012. During previous years, in each case where a self-determination poll was held in Catalonia, the country's judiciary has subsequently struck down the vote as illegal, without serious permanent negative impact.

 It remains unclear whether the Spanish government will succeed in preventing the vote from taking place. However, even if the referendum proceeds, there will essentially be no practical impact on the business environment or governance, either in the Catalonia region or in Spain overall, regardless of the outcome. If Madrid invokes Article 155, seen as a "nuclear option," foreign businesses operating in the country could be required to deal directly with the federal government in the medium term, rather than local Catalan officials, though such a move would likely prompt an immediate and widespread backlash on the streets from pro-independence activists. Already faced with economic pressures, and having safely weathered periodic independence referendums before, Madrid is highly unlikely to risk exacerbating the independence issue by making such a move.


Whether the vote occurs or not, tensions will continue beyond Oct. 1. A general strike called by the Confederación General de Trabajo (General Confederation of Labor, or CGT) Oct. 3-9 to protest recent actions by the central government will almost certainly serve to accentuate the dispute in the immediate wake of the referendum. Striking workers could stage rallies in various cities and towns in the region, particularly in Barcelona. Moreover, if the plebiscite is shut down, pro-independence groups could protest after Oct. 1 to express anger over perceived interference by Madrid. Occasional trigger events, such as later Constitutional Court rulings on the referendum or Catalonian independence, could cause temporary spikes in activist activity. Nevertheless, the frequency and size of such residual actions should lessen gradually over the ensuing weeks, with most Catalans returning to their normal daily routines reasonably quickly. Regardless of whether the independence vote takes place, political tensions in Catalonia will probably begin to abate after the first 10 days of October, with life gradually returning to normal over the ensuing weeks.