It takes nerves of steel 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 an almost 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.
Last Tuesday, the Catalan president addressed the regional assembly of 135 lawmakers, and announced that he had a mandate to declare Catalonia an independent republic.
Standing outside the handsome eighteenth-century arsenal-turned-parliament in the Parc de la Ciutadella, you could hear celebratory shouts from the crowd several hundred yards away. But just moments later, Carles Puigdemont undercut his groundbreaking declaration, by requesting its suspension to allow for dialogue with Madrid.
Immediately after he finished speaking inside the Parlament de Catalunya, the reactions of ordinary Catalans we spoke to on the streets outside the park were mixed. One dejected man told me that Puigdemont’s long-awaited speech had been a bit disappointing.
“Let’s hope that this dialogue that our president wanted for our country, so that other countries would support us, is something that will happen,” he said, without much conviction.
The response from the Spanish government was unequivocal and swift.
Spain’s deputy prime minister, Soraya Saenz de Santamaria, made a blistering statement in which she said the Catalan leader “doesn’t know where he is, where he is going and with whom he wants to go”.
Spanish Prime Minister Mariano Rajoy subsequently played for further time in a measured statement later last week.
That request inexorably led to the events at the start of this week, with the Spanish IBEX 35 index falling more than three quarters of a percent in the first 15 minutes of trading on Monday, after Puigdemont’s written response to Rajoy was published by local media. The Catalan president failed to answer in plain language whether he had indeed declared independence the previous week.
Within an hour of that letter’s publication, de Santamaria took to the airwaves once more with a rebuttal. “It’s not a hard question we have asked,” she thundered, “it’s not a hard question to respond to”.
But for a Catalan leader trying to maintain his grip on a diverse political alliance in a historically turbulent period, that may not be entirely true.
One long-standing pro-independence Catalan politician last week joked to me that this was a game of political chess.
But of course, it’s not just two men’s political reputations at stake, but the future of millions of ordinary Catalans, regional and national economies, businesses, jobs, and indeed — for some Catalans — the definition of democracy in modern Europe.