Catalan Uncertainty Paralyzing Regional Investment, Spain's Economy Minister Says

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Bulgaria: Catalan Uncertainty Paralyzing Regional Investment, Spain's Economy Minister Says pixabay.com

 Investment projects in the northeastern region of Catalonia have been paralyzed and the sale of a stake in state-run lender Bankia put on hold because of the current political uncertainty, Spain’s economy minister said on Thursday, Reuters reported. Catalonia’s parliament is set to declare independence on Monday after going ahead with a banned referendum on Oct.1, while heavy-handed tactics employed by Spanish police trying to stop the ballot have been widely criticized.

“This is generating uncertainty that is paralyzing all investment projects in Catalonia,” Economy Minister Luis de Guindos told Reuters in an interview.

“I‘m convinced that, right now, not one international or national investor will take part in a new investment project until this is cleared up.”

Catalonia is a center of industry and tourism that accounts for one-fifth of Spain’s economy. It is a production base for major multi-nationals from Volkswagen to Nestle and home to Europe’s fastest-growing sea port.

On Thursday, Spain’s fifth-largest bank, Sabadell, said it was considering whether to shift its headquarters away from Catalonia in the first major sign that the wealthy region’s push for independence from Spain could scare away big business.

Caixabank, Spain’s third largest lender by market capitalization, is also considering moving its legal base outside Catalonia, a source with knowledge of the situation said. A spokesman for the bank said no decision had been taken on a move.

Tensions between Madrid and Barcelona have intensified since the poll, which was overwhelmingly in favor of independence but which nearly 60 percent of Catalan voters boycotted.

Catalan President Carles Puigdemont has said he favors mediation to find a way out of the crisis but that Spain’s central government had rejected this. Prime Minister Mariano Rajoy’s government has meanwhile called on Catalonia to “return to the path of law” before any negotiations.

 

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