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Barclays calms investors: "The probability of independence of Catalonia is very low"

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Barclays calms investors: "The probability of independence of Catalonia is very low"

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increase of tension in Catalonia has not significantly altered markets, which provide few options to real independence. Even so, british bank Barclays wanted to launch a message of calm to ir customers, which ensures that odds of an independent Catalonia are practically non-existent, "extremely low", as stated in a note that begins by questioning wher investors should be worrying about referendum and its possible consequences.

Despite response, entity does not hide his doubts about what will happen after consultation scheduled for October 1, and on how to evolve support for secession in medium-term. Your main scenario is that re will be an increase in friction between both parties that would result as a possible risk for investors.

"The markets have been relatively optimistic so far (in our opinion, with reason)", but in future everything will depend on positions taken by one and or. "There could be triggers that lead to an escalation of tension greater, with any outbreak of violence", that would make it more feasible secession in medium-term.

In that climbing, Barclays believes that strategy of Catalan Government would "force a response on part of central Executive" to generate animosity between voters and gain more support for independence. The Government, for its part, could choose to apply article 155 of Constitution to centralize part of autonomous powers, which would furr polarization that is already apparent in Catalan society.

In any case, entity attaches low probability to se options, and on contrary, considered most feasible to call for new regional elections and victory in m of Oriol Junqueras. "ERC is leading polls, which means that Oriol Junqueras will probably be next president of Catalonia. It is expected that his political agenda would be aimed at persuading more voters to support independence," he says.

The valuation of Barclays, is in addition to or entities, and rating agencies international in recent days have warned about risk that political tension could have for Catalonia and for rest of Spain. Moody's said in a recent report that situation could lead to "negative consequences" for rating of both while Fitch threatened to downgrade note of debt of regional, currently at level of junk bond.


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