The EU’s budget commissioner has warned of the risk of “civil war” in Catalonia, as fears grew over a looming independence declaration and major banks prepared to relocate their headquarters.
As another day passed with no sign of dialogue and pro-independence parties pushed for the declaration of a Catalan Republic as early as Monday, Gunther Oettinger, the budget commissioner, urged the two sides to talk.
“The situation is very, very disturbing. A civil war is planned in the middle of Europe,” Mr Oettinger said in Munich.
”One can only hope that a conversation will be made between Madrid and Barcelona soon,” he continued, adding that the EU could only mediate talks “if asked”.
As nerves grew that an independence declaration could be about to plunge Catalonia into the unknown, Banco Sabadell, the fifth-largest banking group in Spain, announced it was moving its headquarters to Alicante.
CaixaBank too was looking at options, the Spanish daily El Mundo reported, including a relocation to the Balearic Islands if an independence declaration tipped Catalonia into a state of legal chaos. The insurer Catalan Occidente also said it was ready to take “all necessary decisions” as “events developed”.
The government in Madrid appeared to be trying to facilitate an exodus, by preparing a decree to make it easier for companies to move their legal base out of Catalonia without lengthy approval processes. The decree is expected to be approved on Friday, Reuters reported.
Luis de Guindos, the Spanish economy minister, pointed to the bank moves as a measure of the instability wrought on Catalonia by the independence crisis.
“This is a clear indication of how insane the regional government of Catalonia is,” he told Bloomberg News.
There was uncertainty on Thursday as to when a declaration of independence might come. The Catalan parliament is to meet on Monday and the CUP, the junior partner in the regional government, is pushing for it to be made then.
On Thursday, Spain’s constitutional court ordered that session suspended – though the ruling, which follows earlier, flouted bans over Catalonia’s referendum – is unlikely to be heeded.
But Carles Puigdemont, the Catalan president, notably omitted to address the issue in a Wednesday speech, while the head of the parliament said on Thursday she could not confirm a Monday declaration.
Hopes of talks were dampened by Mariano Rajoy, the Spanish prime minister, who told the news agency EFE that the solution to the crisis was “the swift return to legality” and the affirmation there would be no declaration of independence.
The Spanish stock exchange on Wednesday saw its biggest fall since Brexit and industry groups – including hoteliers at a Madrid conference – are increasingly sounding the alarm.
But there are also signs that some international business interests have become increasingly wary of investing in Spain following the scenes of heavy-handed police charges against citizens during the banned vote.
Xavier Adam, a Catalan-born financial investor based in the UK, told The Telegraph that he has decided to cancel all of his company’s projects in Spain in protest at what he sees as Madrid’s “medieval” response to the crisis.
In a letter emailed to Spain’s embassy in London, Mr Adam said his AMC network finance firm is pulling out investment funds worth €300 million because of the “repression, kangaroo legal approach, cutting off IT systems, malicious propaganda [and] the beating of innocent and unarmed civilians who just want to vote”. The embassy confirmed it had received the email.