It takes a focused mind and steady nerves to trade in and out of Spanish banking stocks these days, with the continued tit-for-tat political broadsides firing back and forth between Barcelona and Madrid on almost a daily basis.
Just two weeks since roughly two fifths of the population of the Spanish province of Catalonia voted overwhelmingly for independence in a referendum that Spanish judicial authorities had deemed illegal, there is still a marked lack of clarity on the region's future. And investors, like the many businesses that have shifted their headquarters out of Catalonia, rarely like uncertainty.
Last Tuesday the Catalan president addressed the regional assembly of 135 lawmakers, and declared he had a mandate to declare Catalonia an independent republic. Standing outside the handsome 18th Century arsenal-turned-parliament in the Parc de la Ciutadella, you could hear celebratory shouts from the crowd several hundred yards away, blocked off by hundreds of local and national police. But just moments later, Puigdemont undercut his groundbreaking declaration, by requesting its suspension to allow for dialogue with Madrid. And while many lawmakers from his coalition willingly signed a document declaring independence that night, several notably did not then sign a corresponding document that formalized the suspension.
Earlier in the day I had spoken to several Catalan lawmakers, who had anticipated a move like this. They pointed out that Puigdemont was caught between a rock and a hard place, since he must maintain the new-found momentum towards Catalan independence engendered by the previous weekend's referendum or risk losing control of his fractious coalition; but he had also to weigh that against the threats advanced by Madrid, suggesting that the central government would intervene — with the involvement of security forces as required — and suspend Catalonia's hard-won autonomy.