Catalan separatists threaten to derail Spain's budget which could lead to new elections

• Catalan separatist parties are threatening to upend the Spanish government's 2019 budget proposal.
• The move could potentially prompt snap elections in the country.
• Catalan separatist leaders are about to go on trial.

Gonzalo Fuentes | Reuters

People wave Catalan separatist flags during a demonstration organised by Catalan pro-independence movements ANC (Catalan National Assembly) and Omnium Cutural, following the imprisonment of their two leaders Jordi Sanchez and Jordi Cuixart, in Barcelona, Spain, October 21, 2017.

Catalan separatist parties are threatening to upend the Spanish government's 2019 budget proposal, a move that could potentially prompt snap elections in the country.

Catalan pro-independence parties — the Republican Left of Catalonia (ERC) and the Catalan European Democratic Party (PDeCAT) — said Monday that they would file parliamentary amendments opposing the government's 2019 budget proposal unless Spanish Prime Minister Pedro Sanchez made concessions on the thorny subject of Catalan independence.

While PDeCAT wants the government to launch a nationwide dialogue between political parties "to address politically the Catalan issue," parliamentary spokesperson Carles Campuzano told Reuters Monday, the ERC meanwhile has requested an authorized referendum on the region's independence.

Sanchez presides over a minority Socialist government in the southern European country and he relies on the support of Catalan nationalist parties, the populist Podemos party and other smaller regional parties to pass legislation.

If the secessionists' amendments are not withdrawn, and if they are approved by a majority in Parliament, the entire budget bill cannot be discussed and would effectively be derailed. This would pressure Sanchez's minority government into calling a snap election, something the prime minister has already mooted as a possibility.

"A failed budget vote could potentially open the door to early general elections, the timing of which is still unclear," Antonio Barroso, deputy director of research at Teneo Intelligence, said in a note Tuesday.

Crucially, February 12 is the last day that pro-independence parties can withdraw their amendments to the draft budget. It is also the day when a high-profile trial against a group of Catalan separatist leaders who were involved in the 2017 push for independence begins.

2017 referendum

In late 2017, Catalonia held a referendum on independence that was deemed illegal by the Spanish government. A large majority of Catalans voted for independence but with a low voter turnout. A constitutional crisis followed and the movement was clamped down on by the government. A number of separatist leaders fled Spain or were arrested and imprisoned, causing widespread controversy.

Spain's public prosecutor is now seeking prison terms of up to 25 years on charges of rebellion and misuse of public funds for their role in the failed independence attempt.

Teneo Intelligence's Barroso said he believed the decision by secessionists to present amendments to the budget bill and the timing of the trials was crucial — and could prevent the pro-independence parties from being able to backtrack on their amendments blocking the draft budget.

"The imminent start of the trial of the secessionist politicians (on February 12) has put the Catalan issue again under the spotlight, leading to protests by the pro-independence movement and increasing the pressure on separatist parties to toughen their stance towards Madrid," he said.

Sanchez in a difficult position

"While they might still make a last-minute U-turn, the upcoming trial of separatist politicians might make it difficult for them to support the budget," he said, noting that "the images of the separatist politicians in front of the judge (the trial will be live-streamed) and the likely demonstrations in Catalonia could be too much for the secessionist parties to support the PSOE (the ruling Socialist Workers' Party) government."

Sanchez is in a difficult position, wary of conceding too much ground to pro-independence parties. As such, the administration's strategy is to adopt steps that can allow the secessionists to claim they are making advances on the political front while limiting the potential for attacks from the opposition, Barroso noted.

"The government is refraining from proposing measures (such as a self-determination referendum) that would divide the ruling Socialist Workers' Party (PSOE) internally and expose Sanchez to the attacks of Ciudadanos and the People's Party," he said.