Listen, things aren’t going well in Spain.
Specifically, about a half million people are running around in the streets of Barcelona because Prime Minister Mariano Rajoy is going to go ahead and fire all the treasonous bastards who thought it was a good idea to kinda, sorta declare Catalonia an independent state.
Ok so first of all, Rajoy needs you to understand that this wasn’t something he wanted to do. Rather, this is more like when you let your dog off the leash at the park because you trusted it not to run away and then it takes off into the woods. Now you’ve got to go find it and then proceed to beat the holy shit out of it.
“The government had to enforce Article 155. It wasn’t our desire, nor our intention. It never was,” he explained on Saturday, adding that “in this situation, no government of any democratic country can accept that the law is ignored.”
And Rajoy went on to explain that although Catalan President Carles Puigdemont, his vice president and all of his ministers will be likely be dismissed and replaced by the administration in Madrid, Catalans shouldn’t think of it as a suspension of autonomy.
“The autonomy is not suspended, nor the government,” he said. “People are removed who put the government outside the law, outside the constitution and outside statutes.”
So if you’re in Catalonia and you’re angry, well then you’re thinking about this all wrong. Despite what it looks like, Madrid is actually not suspending your autonomy and not suspending your government. And to prove it, they’re taking over the management of the Catalan administration and firing all its leaders. See? How much better do you feel when you look at it that way?
“We are going to work to return to normality,” Rajoy told a news conference in Madrid, adding that “we are going to work so that all Catalans can feel united and participate in a common project in Europe and the world that has been known for centuries as Spain.”
Again, Catalans are looking at this all wrong. Don’t think of this as a suspension of autonomy and a crackdown by the central government. Rather, think of it as “an opportunity to participate in a common project in Europe.”
Judging by the size of the protests, it doesn’t look like Rajoy had much in the way of success with regard to winning over skeptical Catalans.
For his part, Puigdemont will seek a plenary session of Catalan parliament to debate the effects of Article 155, saying “Catalan institutions cannot accept [this] attack by Spain.”
The Article 155 measures will have to be ratified by the Senate.
As far as markets are concerned, this comes just days ahead of the ECB meeting at which Draghi is widely expected to explain how he intends to taper QE. In other words, the timing of the turmoil in Spain leaves something to be desired for Draghi.
If this situation escalates and leads to significant widening of periphery spreads, it’s unclear whether aggressively rolling back ECB asset purchases would still be feasible. Because you know, “whatever it takes” and all.
Oh, and to the administration in Madrid: if you read this and get mad at me like you did earlier this month, let me save you the time it will take you to e-mail me. I’m not changing this one and if you don’t appreciate my sarcasm well then you can kiss my ass, because unlike Carles Puigdemont, you cannot suspend my autonomy.