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Spain votes to stop Catalonia independence referendum

MADRID, Oct 9 (Reuters) - Spain's parliament voted onTuesday to block the northern region of Catalonia from holding areferendum on independence, the latest step in a growingpolitical battle between Barcelona and Madrid in the midst of adeepening economic downturn.

The motion to permit the referendum was brought to the lowerhouse by the Catalan ERC party but was voted down by the rulingconservatives (PP), which hold an absolute majority, theopposition Socialists (PSOE) and the smaller UPyD party.

The heavily indebted region, responsible for a fifth of thecountry's economic output, voted in favour of holding thereferendum at the end of September, in defiance of Madrid.

Catalonia brought forward regional elections to Nov. 25after regional leader Artur Mas's proposal to create a separateCatalan tax agency was flatly rejected by Prime Minister MarianoRajoy, who said it went against Spain's Constitution.

Mas then said he would seek a referendum on an independentCatalonia, rattling already nervous international markets whichhave pushed up Spanish debt premiums on concerns it cannotcontrol its finances, largely due to its over-spending regions.

Catalonia, all but shut out of international debt markets,has requested a state liquidity line for just over 5 billioneuros ($6.45 billion).�

Independence fervour has been growing in Catalonia duringthe deep recession. More than half of Catalans say they want aseparate state.($1 = 0.7754 euros)

(Reporting by Edgar Aribau; Writing by Paul Day; Editing byMichael Roddy)

((paul.e.day@thomsonreuters.com)(+34 637 44 77 10 08)(ReutersMessaging: paul.e.day.thomsonreuters.com@reuters.net))

Keywords: SPAIN CATALONIA/

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