What Happens When “Scotland” Comes To Spain?

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Friday saw the largest demonstration in the history of Barcelona with 1.8 million people showing up, exceeding all previous records, calling for Catalan independence…

As Martin Armstrong notes, demonstrators were waving independence flags and wearing yellow-and-red shirts with the phrase “Now is the time” shouting “Independencia!” as they swarmed into the semiautonomous area in northeastern Spain that hails Barcelona as its capital.

What is clear, we are seeing the beginning stages of what we have warned about – the rise of civil unrest that leaded to nations dividing or being overthrown in revolutions. What has taken place in Scotland is by no means going unnoticed.

“Independence, independence”, has been the new cry of the people today in Spain in the center of the Catalan capital. Two main roads that converge at a place filled over a distance of seven miles with people. Here, a “V” for “Victoria” (Victory) was formed. The amount of protesters is very impressive and the police have been gearing up for this because they know what is coming.

Catalonia has 7.6 million inhabitants and this is a very important region for Spain. Despite the economic crisis and an unemployment rate of more than 22 percent, Catalonia is around one fifth of total gross domestic product of the Southern European country is generated.  

Proponents of secession from Spain think an independent Catalonia would achieve a higher standard of living.

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Coming to another European country near you soon…

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Of course, this doesn’t help…

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Just as we warned previously…

The history of Europe over the last 100 years shows that austerity can have severe consequences and outcomes and perhaps most notably, the independent variable that did result in more unrest: higher levels of government debt in the first place.


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And here is Deutsche Bank’s take on how this might escalate…

From Edinburgh to Barcelona

The unexpected increase in the uncertainty about the outcome of next week’s Scottish independence referendum – see accompanying article in this issue of Focus Europe – re-focused press and clients’ attention on the possibility of a similar referendum in Catalonia on 9 November. The large demonstration in Barcelona on 11 September contributed to elevate media interest.

Catalonia matters

It will take years for Spain to work through the high public and private debt, but the country tends now to be described as a poster-child of the euro-area approach to the crisis along with Ireland, while France and above all Italy struggle to recover. Furthermore, contrary to France, the Spanish government is in a more solid position, and, contrary to Italy, it showed a greater determination in implementing structural reforms.


However, calls for a self-determination referendum in Catalonia add a significant element of uncertainty. Catalonia accounts for a larger proportion (18.8%) of the national economy than Scotland (8%). Indeed, Catalonia is the largest region in Spain (Figure 2).

Catalonia’s referendum would have less clear consequences than Scotland’s

The consequence of the Scottish referendum will be clear: a yes would imply that Scotland becomes independent and Great Britain would be a less united kingdom. The Catalan referendum would differ in at least two elements:

First, and most important, the Catalan referendum, if it takes place, would probably have a very different (lack of) legal basis. The Spanish Constitution opens the possibility of referenda, but specifically excludes from such a procedure the “basic principles” of the Spanish constitution, which include Spain’s unity. Indeed, it appears highly likely that the Spanish Constitutional Court will reject Catalonia’s request for a self-determination referendum to be held on 9 November.


Second, even if a non-binding referendum were to take place, it would probably ask two questions: (i) “Do you want Catalonia to become a state?” and (ii) “If yes, do you want this state to be independent?”

Will the Catalan referendum take place?

The referendum is promoted by the Catalan President Artus Mas, leader of Convergence and Union (CiU) and the junior regional government partner Republican Left of Catalonia (Esquerra Republicana per Catalunya – ERC). The latter is a more radical pro-independent party. The 2012 CiU-ERC government pact is based on the commitment that a self-determination referendum will take place by end-2014 unless socio-economic conditions require a postponement.

Assuming that as expected the constitutional court will declare the referendum illegal, we see four broad scenarios:

(I) Catalan President Mas and Spanish PM Rajoy’s reach a compromise and both referendum and early regional elections are avoided (positive for a macro-stability point of view). Rajoy could change approach and promise a constitutional reform after the end-2015 general election along with greater financial autonomy (for example in terms of tax treatment).


— Push-back: If Rajoy is seen as too lenient, his PP party could pay a political cost. But if Mas does not obtain major concessions, his position would weaken to the advantage of ERC. If a compromise was easy to reach we would not have come to the current situation. ERC could also react by triggering a fall of the Catalan government.


(II) Mas triggers early elections using the result as a de facto proindependence vote (potentially negative for a macro-stability point of view).


— Push-back: The risk for Mas would be to lose the presidency as his current junior coalition partner ERC is leading in opinion polls. The eventuality that Catalonia, contrary to Scotland, is not allowed to hold a referendum could further boost consensus for ERC.


(III) A variation of the second scenario is a crisis triggered by ERC (potentially negative for a macro-stability point of view). In this case CiU could try to form another government coalition (e.g. with the socialists) but the risk, however, would be that ERC would gain further consensus ahead of the next elections to the cost of the less radical CiU.


— Push-back: CiU will be perfectly aware of this risk – hence they will have to avoid providing a clear justification to ERC. This in turn complicates even further the relationship with Madrid.


(IV) Catalonia goes ahead with the referendum even if the Constitutional Court declares it illegal (potentially negative for a macro-stability point of view). According to the Financial Times (11 Sept.), the majority of analysts believes the vote will have to be called off after the Constitutional Court’s ruling. There are probably at least three reasons behind this view. First, going ahead with an illegal referendum could split Mas’ party. Second, a significant part of the Catalan population could boycott the referendum if it is declared illegal. Third, the referendum would have no legal validity and Madrid could argue that nothing has changed – it could also complicate the relationship of Catalonia with EU partners. However, we would not discard the possibility of a referendum taking place on 9 November:


— Push-back: ERC could push to hold an informal referendum anyway. Alternatively, Mas may want to avoid losing the initiative at the advantage of ERC and also use the result of the referendum to strengthen his bargaining position with Madrid.

Which scenario is more likely? Toward a muddle-through approach

In cases as complex as the one above the most likely scenario can sometimes be identified by finding the dominant strategy (in terms of game theory). However, it is extremely difficult to identify such a strategy given the above described constellations of incentives and constraints. For example, PM Rajoy could opt for a divide-and-rule strategy by trying to entice Mas’ CiU away from the alliance with ERC via material concessions. But that would cause the fall of the current government and more importantly could further boost ERC’s projected share of seats. On top of that, Rajoy will also have to take into account the repercussions of his concessions on other regions – for example on the Basque regions. The risk of ending up in a “prisoner’s-dilemma” conundrum, where the least optimal solution is selected, is material.

Alternatively, we could resort to economic arguments. The scenarios that lead to the greater economic benefit (i.e. probably scenario I above) should become the most likely. The central government may hope that the improving economic conditions will quell the demand for independence. Although it is true that the economic crisis shone a light on the financial transfers from Catalonia to the central government, our understanding is that the drivers of the independence movement in Catalonia are beyond economic considerations. They are rooted in a centuries-long history. This gives a strong emotional content to the debate beyond pure economic considerations like in Scotland.

The Scottish referendum and reactions to it will matter for Catalonia

Next week’s Scottish referendum could affect the likelihood of the above four scenarios via at least three elements.

The result: a yes vote would probably boost the independence movement.


The EU partner reactions: the pro-independent Catalans are in favour of Catalonia as an independent state within the European Union.3 If Scotland vote yes, joining the EU could become a complicated process. The European Union could be weary of being seen as supporting Scotland’s independence given the situation in Ukraine. Equally if not more relevant, a number of European countries will be also wary of the consequences for their own territorial unity, for example Belgium and to a lesser extent Italy. Overall, exiting the euro-crisis calls for further European integration. A break-up of the euro-area fourth largest country would be perpendicular to this trajectory.


Markets and business reaction: a negative reaction by the market and businesses potentially reallocating away from Scotland in case of a yes vote could weaken the pro-independence movement in Catalonia.

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Opinion polls on Catalonia independence

No regular, independent opinion polls are available to assess support for the pro-independence vote. However, there appears to have been an increase in the support for pro-independence over the past 3 years.

According to the State pollster CIS this year around 45% of the Catalan supports full independence, 20% a federal state and 23% an autonomous region (Reuters).

The Center for Opinion Studies of the Catalan presidency reported a 54.7% support for independence in 2013. The 2014 survey provides a less clear reading.



THE GREAT ABYSS – Fracking is RAPIDLY destroying America’s water tables and may lead to an EXPLOSION of BIBLICAL proportions



The locomotive size diesel engine pictured to the right in the diagram below, is used by America’s energy companies to turn incredibly huge water pumps. Pumps then force water removed from manmade Lake Meredith, down into the earth at Sanford, Texas, in order to extract large quantities of gas.

The concept of forcing water into the gas reserve, which in turn forces gas to the surface, and hopefully into pipelines, is called “water replacement.”  The fact that farmers have pumped over a foot deep of water out of the Ogalla Aquifer only accentuates the problem, by adding to the vacuum, by eventually sucking the “replacement” water down into the aquifer.

PANTEX. (where America stores most of its larger nuclear weapons) is indicated by the red dot on the Texas county map.  The image to the right is the official U.S. Geological Survey map of America’s natural gas reserves; all of which are collectively referred to as the HUGOTON PANHANDLE GAS RESERVE.  (The various colors on the map indicate the density of gas from one area to another.)

Keep in mind the gas reserve doesn’t
always follow America’s shore lines.

As you can plainly see, the entire North American Continent is perched directly on top of these reserves.  The largest of the reserves within the Hugoton Panhandle Complex is the “Panhandle Reserve,” which is located a few miles north ofPANTEX, just outside of Amarillo, Texas.  At this location this horrendous natural gas reserve is less than fifty feet below the surface of the Earth.


Due to the Panhandle Reserve being overworked since the very early 1900’s, there are now huge pockets of natural gas all around the PANTEX nuclear storage facility.  It should be noted that all that’s required to set off a nuclear device is to “surround” it with explosives that can be simultaneously set off in a controlled manner.  However, in this instance, if the H-P Reserve ever explodes it will NOT actually set off these nuclear weapons.

The results will be far more catastrophic than if the nuclear weapons were to all go off at once, because, the explosion from the reserve will  vaporize America’s nuclear weapons, and carry their radio active particles into the atmosphere, to be distributed all around the world.

Background Information:
Back in 1924, it was thought this oil and gas reserve was limited to the Texas Panhandle, and was appropriately named the Panhandle Natural Gas Reserve.  The early wells were given names based on the county in which they were drilled, such as “Panhandle, Wheeler County”, “Panhandle, Carson County”, “Panhandle, Hutchinson County”, and so on.  It was later discovered that these pockets of natural gas throughout the Panhandle were part of one giant reserve.

In addition to encompassing the entire Panhandle of Texas, it was then discovered that this giant reserve ran all the way across the State of Kansas.  Kansas had already named its portion of the reserve the “Hugoton Reserve.”  As the Hugoton and Panhandle reserves were found to be one and the same, they were simply referred to jointly as the Hugoton-Panhandle Natural Gas Reserve.

Later, it was discovered that the massive H-P Reserve runs all the way across the entire State of Oklahoma, and beyond, encompassing areas which, also had already given their portion of this very same gas reserve names.

xX Eventually, it was discovered that the H-P Reserve runs all the way north to Montana, and that for drilling purposes it was “tap-able” in almost any area along the way.  Then, at a later time, it was discovered that this same gas reserve runs up to the most northern part of Canada, as well as

all the way down to the southern most part of Old Mexico, with its width extending all the way from the Atlantic Ocean to the Pacific Ocean, thereby encompassing the entire North American Continent!!

In other words, what were thought to be numerous separate gas reserves throughout the country, were now understood to all be part of one huge reserve, the Hugoton Panhandle Natural Gas Complex.

The following is but a partial list of names for other sections of what is now known as the Hugoton Panhandle Natural Gas Reserve: a/k/a  Powder River; San Juan; Uinta;  Paradox; Williston Basins; Sweetgrass Arch; Central Montana Uplift; the Rocky Mountains; Louisiana Henry Hub; Trenton-Black River gas play in southern New York; Western West Virginia Discoveries; Wyoming’s two hubs; and the list goes on, and on.

Some of these places pump their own replacement water into the reserve, while others pay pumping stations as far away as Sanford, Texas, and beyond, for providing their water replacement contribution, because their location HAS no water to pump.

Also, see the link to a recent article in the National Academies Press declaring (in red text about halfway down the page) that:  “Most production from the Hugoton Panhandle complex (in the State of Wyoming) is connected to, or could be connected to, the BLM helium pipeline and Cliffside storage facility near Amarillo, Texas.”  Please take note that scientists do indeed call every one of the interconnected reserves the “Hugoton Panhandle Complex” as verification to what we’ve said above..

See our link:   http://www.TheAmericanNightmare.org/The_National_Academies_Press.html

In effect, what we have is essentially one common gas reserve that encompasses most of the area beneath the entire North American Continent, with a commonly used process turning it into a literal bomb of unimaginable size, creating a potential disaster of Biblical proportion.

Government maintains that these sections of the reserve are not interconnected, most likely so it can allocate each section as a TAXABLE entity.  So, for TARIFF reasons it has no other choice, but to allow these “different” reserves to be treated as though they were independent. If not, issues of tax liability would arise among the oil companies.

Although the government will claim these are different reserves, and that they are not connected, a look at their own official photograph clearly shows us otherwise.

Why does it matter if they are interconnected?
Read more here: