Mish's Global Economic Trend Analysis

Rupture in Spain: Catalan Parliament to Vote for Independence

Posted: 08 Nov 2015 08:28 PM PST

A major showdown with Madrid is in the works as the Catalan Parliament to Vote on Independence from Spain.

The Catalan independence campaign heads for a potentially perilous new phase on Monday, as the regional parliament prepares to vote on a resolution to "disconnect" from the rest of Spain and renounce all rulings from the country's constitutional court.

The resolution commits the recently elected parliament to the "creation of the independent state of Catalonia, in the form of a republic".

It also calls for the passing of new legislation to set up an independent tax authority and social security system within 30 days.

Most controversially, perhaps, it states that the Catalan parliament is no longer bound by the decision of Spanish institutions and, in particular, the constitutional court, the highest tribunal in Spain.

The resolution is the first fruit of the uneasy alliance between the two main pro-independence groups, Junts pel Si and the Popular Unity Candidacy (CUP). The two groups won a majority of seats in the Catalan parliament in September, but are divided on key issues of strategy and policy.

The CUP, a radical leftwing party that opposes Nato and EU membership, has so far refused to back Artur Mas for another term as president of Catalonia. Mr Mas, a senior figure in Junts pel Si, hails from a moderately nationalist, business-friendly political background. But he has steadily moved towards a more hardline pro-independence stance.

What's Next?

If the vote is for independence, what will Spain do? Call out the army?

What will president Obama say?

Is it acceptable for the US to back Egyptians demanding a government overthrow, and orchestrate a coup in Ukraine, while denouncing the right of self-determination to Catalans?

No, it's not acceptable, and it is hypocritical, but it's exactly what one should expect.

Mike "Mish" Shedlock

Anti-Austerity Socialists Topple Portugal's Two-Week Old Government; Modern Day Brezhnev Doctrine Review

Posted: 08 Nov 2015 09:22 AM PST

The recent Portuguese election on October 4th were "inconclusive". The center-right scored the most votes but could not muster a coalition majority.

A coalition of leftist parties could form a government, but the president of Portugal (a largely symbolic position except in cases like these) refused to appoint a leftist prime minister on the grounds that they represent anti-European forces. Instead the president allowed the pro-EU Prime Minister to stay in place.

That government will fall this week, but first let's recap what Nigel Farage said about yet another Eurozone puppet government.

Modern Day Brezhnev Doctrine Review

Please consider Nigel Farage Speaks Out on the Situation in Portugal.

As this migrant crisis begins to overwhelm the European Union, and yes it is an existential crisis, perhaps we should ask ourselves what really is the true nature of this project? Because I've heard a lot today about rights, well what about democratic rights? Because I think what we are seeing is an increasingly authoritarian European Union that crushes democratic rights and then actually crows about it.

Every single time there is a crisis, it is national democracy that loses. We saw back in 2011 the Italian Prime Minister Berlusconi sounding Eurosceptic, removed and replaced by a puppet Prime Minister. We saw exactly the same happen in Greece in 2011, Mr Papandreou threatened a referendum on Euro membership, there was a coup against him, he was replaced by a puppet. In this migrant crisis we've seen four countries, led by the strongest Hungary, making it clear they want no part of EU migrant quotas, only to find themselves crushed through EU trickery and made to accept the very thing they said no to.

And I never forget seeing the Greek Prime Minister Mr Tspiras sitting just over there having won a General Election and then come to this House to be told that the manifesto was unacceptable and it must be ditched. Well I think all of this has reached a new low this week with Portugal. Virtually unremarked upon by the media and yet for those who don't know there is now, following a General Election, a left wing majority with a socialist plan for Portugal, and yet the President of Portugal, Mr Silva, is refusing them office on the grounds that they represent anti-European forces and is allowing the minority Conservative pro-EU Prime Minister to stay in place.

This is the modern day implementation of the Brezhnev doctrine. This is exactly what happened to states living inside the USSR.

What is been made clear here with Greece and indeed with Portugal is that a country only has democratic rights if it's in favour of the project. If not those votes are taken away and perhaps none of this should surprise us, as Mr Juncker has told us before, "there can be no democratic choice against the European treaties", and the German finance minister Mr Schauble has said, "elections change nothing. There are rules". ...

Anti-Austerity Socialists Topple Portugal's Two-Week Old Government

Today, the Financial Times says Leftwing Alliance Set to Topple Portugal's Government.

An unprecedented alliance between Portugal's opposition Socialists (PS) and the far left is poised to bring down the country's two-week-old centre-right government this week and replace it with an "anti-austerity" administration.

The fall of the minority government led by Pedro Passos Coelho, the prime minister, became almost certain over the weekend when the PS sealed a pact with the radical Left Bloc (BE) and Communist party (PCP) on providing majority support for a Socialist-led alternative administration.

António Costa, the PS leader who has bridged 40 years of ideological schisms to forge a new leftwing alliance, is expected to become the next prime minister, shifting Portugal's alignment in the EU from a defence of tough fiscal discipline to support for easing austerity.

The programme supported by the left calls for public sector wage cuts made during Portugal's international bailout to be restored within a year, as well as increasing social benefits and cutting taxes. Opponents say such fiscally expansive measures could place Lisbon on a collision course with the European Commission.

Mr Passos Coelho's minority government, which took office on October 30, is almost certain to be defeated in parliament on Tuesday by a rejection motion tabled by the left-of-centre majority following a two-day debate on its programme. Losing the vote implies the government's resignation and the appointment of a new prime minister by President Aníbal Cavaco Silva.

The president has issued strongly worded warnings against the prospect of a government supported by parties such as the BE and the PCP, which favour unilateral debt restructuring, oppose the EU's fiscal compact on deficit reduction and disapprove of Portugal's Nato membership.

But the conclusion by the PS this weekend of three separate agreements with the BE, the PCP and the small pro-Communist Greens on supporting a PS-led government leaves Mr Cavaco Silva with little alternative but to swear in Mr Costa as the next prime minister should Mr Passos Coelho lose Tuesday's vote.

Costa says he is committed to keeping the country in the eurozone and will respect the three percent budget deficit rules.

However, I highly doubt he can raise wages and benefits for public workers and simultaneously keep that fiscal promise.

Mike "Mish" Shedlock

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