Catalonia calls vote as Spain crisis deepens

Catalonia Tuesday called snap elections over its drive for greater independence, deepening Spain's crisis as its government struggles to avoid a full-blown bailout. The rich northeastern region's President Artur Mas added an extra headache for Spain's Prime Minister Mariano Rajoy, who has called for the country to stay united as its fights to secure its public finances. Mas called an early vote for November 25, a de facto referendum on his demands for greater independence for the big northeastern region, which is fiercely proud of its distinct language and culture. "It is time to take the risk," Mas told the regional parliament, after Rajoy last week rejected his proposals for greater powers of taxing and spending. "If Catalonia were a state we would be among the 50 biggest exporting countries in the world," he said. Last month, Catalonia was forced to reach out for 5.0 billion euros ($6.5 billion) from a central government fund to help it pay its 40-billion-euro debt, which is equal to a fifth of its total output. Hundreds of thousands of people staged a pro-autonomy demonstration in the streets of Barcelona two weeks ago, which Mas said showed big support in Catalonia for his proposal of greater economic independence. Opinion polls show growing support for independence in Catalonia, but the Spanish constitution bars a straight referendum on the matter. "I think this debate, at this time, is creating tremendous instability," deputy prime minister Soraya Saenz de Santamaria said on Cadena Ser radio. "With all these actions a new crisis is being added to the crisis." Also on Tuesday the country's most populous region Andalusia became the fourth to announce it was considering seeking emergency bailout funds from the central government. With Rajoy reluctant to seek a full-blown sovereign bailout, Spain's borrowing costs crept back up in a short-term debt auction, renewing pressure on him. Spain's borrowing costs had fallen this month after the European Central Bank outlined plans to buy the bonds of stricken eurozone states in return for strict conditions set by eurozone bailout funds. Spain has cut a deal with the European Union for a rescue loan of up to 100 billion euros for banks hobbled by bad loans extended before a 2008 property market crash. But it has refused to be rushed into seeking a full-blown sovereign bailout until it knows the conditions. "Investors remain concerned by the situation in Spain," said a report by brokerage Link Securities. "Many are beginning to get impatient because the Spanish government has not taken the step and asked for a full-blown rescue, something that has been discounted for weeks as being inevitable." Rajoy also faces growing resistance to his painful measures aimed at lowering the public deficit, including public sector pay cuts and a substantial increase in sales tax. Hundreds of protesters from around the country gathered around Madrid Tuesday to protest those measures, vowing to march later to the lower house of parliament, the Congress of Deputies, in the city centre. Police cut off main routes to the Congress with a double layer of metal barricades, backed by vans and with a helicopter hovering overhead. Clashes have broken out between protestors and police on the sidelines of several demonstrations over recent months. Rallying outside the city's Atocha railway station, Carmen Rivero, a 40-year-old photographer, said she travelled overnight in a bus with 50 protesters from the southern city of Granada to make her voice heard. "We think this is an illegal government," she said. "We want the parliament to be dissolved, a referendum and a constituent assembly so that the people can have a say in everything."