The results of elections in Catalonia, potentially a break-away state from Spain, seemed to assuage market concerns about the region on Monday.
Spain's IBEX declined just 0.3 percent on Monday, in line with broader European benchmarks. Yet this market confidence may be misplaced. While the Convergència i Unió (CiU) party which has become the best-known cheerleader for a referendum on whether Catalonia should stay as part of Spain lost some of its voters, they have been deserted for more extreme parties like the Esquerra Republicana (ER). Close to two-thirds of the votes cast were for parties which want a referendum on Catalan independence.
"This election result hasn't made things easier. What we've seen is a radicalization of the political stage," Edward Hugh, one of the few economists to sound the alarm about the euro zone's debt crisis, told CNBC.
The region, which includes Barcelona, Spain's second-largest city, pays more into Spain's central coffers than it gets back, and is historically independent-minded, with its own dialect. As talk of a bailout for Spain continues, the wish to dissociate from the rest of the country may grow.
"We feel as the Northerners of the South," Jordi Molins, a Catalan and previously a trader at Dresdner Bank, told CNBC.
"We want to be a new state within Europe. We want to have a country that is better-managed."
Catalonia may find serious roadblocks if its people decide they want to break away from the rest of Spain. The Spanish central government maintains that a referendum would be unconstitutional and European Union officials have indicated that a separate Catalan state will have to go through a long application process to remain in the EU and the euro.
(Read More: Why Catalonia Won't Become Independent)
Many believe that the independence movement has been blunted by the result and will shift to the background.
"The focus will probably shift to economic and financial issues, in particular, the need to find a new compromise on the financing of the regions and on increasing the economic efficiency of the "Estado de las Autonomias," according to Philippe Gudin, chief European economist at Barclays.
"Rajoy's PP has come out much better than expected in the three regional elections in one month. The opposition to its austerity policy has not gained momentum. Meeting the revised fiscal targets will now be easier politically for the government, as it will be imposing discipline on the regions."
(Read More: Spain Under Major Shadow)
Hugh warned of the potential for a "train crash" next year if Prime Minister Mariano Rajoy, whose Popular Party (PP) won its biggest ever share of the vote in Catalonia, doesn't take notice of the shift to more extreme parties, and argued that investors are underestimating the importance of the result.
"If there's not flexibility on the budget next year, we're going to have more separatist demonstrations and more demands for a vote," Hugh said. "We could move to a second election towards the end of next year, which would have only one topic – whether to create a new state or not. Somebody needs to do something to defuse this situation and find an orderly solution."
Written by Catherine Boyle, CNBC. Twitter: @cboylecnbc.