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Currency, United States Finance

Catalonia crisis could spread 'chaos like a virus' across Europe

Europe’s political leaders are calling for a quick and meaningful solution to the constitutional crisis enveloping Spain following the Catalonia region’s “illegal” referendum vote Sunday, with fears that the vote could spread uncertainty throughout the continent.

As the situation stands, Catalan leader Carles Puigdemont said Tuesday that his government is ready to declare independence “in a matter of days.” Such an act would plunge Spain into a constitutional crisis and could lead to an unprecedented power grab by the Spanish government, which would be expected to try to seize powers back from Catalonia’s devolved government.

With potentially little time to salvage the situation, European leaders called for resolution to the situation.

“Europe needs a solution and Europe needs to avoid this chaos — chaos can be like a virus and we need to avoid chaos,” Enrico Letta, the former prime minister of Italy, told CNBC Wednesday.

“We were exiting from the main political problems in Europe and now this Catalonian issue risks bringing a new virus and new chaos,” he added.

Letta is no stranger to upheaval himself, having presided over a fraught coalition government in 2013-2014 during a period of heightened political instability in Italy and economic crisis in the euro zone. Letta resigned after 10 months, however, due to a lack of support for his leadership within his own Democratic Party, particularly from the then- party leader and current Prime Minister Matteo Renzi.

He said that a political solution was necessary in this case and that it was “inconceivable” that the Catalan authorities could unilaterally declare independence

“Formally and legally, what happened in the referendum is out of the rule of law but it’s necessary to have a political solution and dialogue… It’s time for national authorities and government to move and find a peaceful solution,” he said.

The European Parliament is set to debate the crisis in Catalonia on Wednesday amid mounting criticism of a deafening silence in Brussels. Still, European leaders – many of them with separatist movements in their own back yards – were quick to voice support for Spanish Prime Minister Mariano Rajoy, the national government and constitution.

Many European leaders have been notable for their lack of criticism of Spain’s heavy-handed tactics in trying to stop the vote, not wanting to be seen to interfere in another country’s affairs. Over 890 people were injured as Spanish riot police tried to stop the vote Sunday, according to the Catalan Department of Health.

Although 90 percent of the 2.26 million Catalans voted for independence, voter turnout was low at 42 percent, with many anti-independence voters abstaining.

The European Commission said Monday that “violence can never be an instrument in politics” but did not make any other allusion to the violence during the vote. However, it warned Catalonia that if it declared independence it would find itself outside the EU.

Some have criticized the EU for “double-standards,” saying its talk of upholding democratic values appeared hollow given its opposition to the public vote on independence.

Hungarian Finance Minister Peter Szijjarto told CNBC the EU had shown some “double-standards” over the issue but, like many other leaders, did not want to be seen commenting on a domestic situation.

“We consider this whole issue as a domestic issue of Spain and we would like to avoid any commentary or any kind of interference into the domestic issues of Spain because what we understand so far is that we’ve been the victims many times of external interference… so we’d rather leave it to the Spanish to deal with it.”

Source: cnbc
Catalonia crisis could spread 'chaos like a virus' across Europe

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