Hong Kong protests and China’s tightening grip rattle business community

FILE PHOTO: Anti-extradition bill protesters stand behind a barricade during a demonstration near a flag raising ceremony for the anniversary of Hong Kong handover to China in Hong Kong, China July 1, 2019. REUTERS/Tyrone Siu/File Photo

By Iris Yuan and Vimvam Tong

HONG KONG (Reuters) – Chaotic scenes of protesters rampaging through Hong Kong’s legislature, trashing furniture and daubing graffiti over walls have sent jitters through the business community, which worries about the impact on the city’s status as a financial hub.

Plumes of smoke billowed among gleaming sky-scrapers early on Tuesday as police fired tear gas to disperse protesters in the heart of the Chinese-ruled city, home to the offices of some of the world’s biggest companies, including global bank HSBC.

Escalating unrest over a controversial extradition bill, which would allow people to be sent to mainland China for trial, grabbed global headlines and clouded the former British colony’s outlook as a finance hub, one of the city’s main pillars of growth.

“I think there will be damage to the reputation of Hong Kong,” said Yumi Yung, 35, who works in fintech. “Some companies may want to leave Hong Kong, or at least not have their headquarters here.”

Around 1,500 multinational companies make Hong Kong their Asian home because of its stability and rule of law. Some of the biggest and most violent protests in decades could change that perception.

Hong Kong returned to Chinese rule in 1997 under a “one country, two systems” formula that allows freedoms not enjoyed in mainland China, including freedom to protest and an independent judiciary. Monday was the 22nd anniversary.

Beijing denies interfering but, for many Hong Kong residents, the extradition bill is the latest step in a relentless march towards mainland control. Many fear it would put them at the mercy of courts controlled by the Communist Party where human rights are not guaranteed.

“If this bill is not completely scrapped, I will have no choice but to leave my home, Hong Kong,” said Steve, a British lawyer who has worked in Hong Kong for 30 years.

Daniel Yim, a 27-year-old investment banker, said both sides needed to sit down and work things out.

“I think the most effective way to address this will be that the government will … actually tackle this and speak to the people, and I guess, you know, both sides sit together and come up with … the appropriate solution.”


Others raised concerns about the future of human rights and the judiciary. Many did not want to use their full names.

“To me, the biggest worry is how Hong Kong is losing its independence bit by bit and is getting dangerously close to a country that doesn’t value human rights and that doesn’t have an independent judicial system,” said Edward, an Australian citizen who has worked in the financial sector for 10 years.

The extradition bill, now suspended but not scrapped, has also spooked some tycoons into moving their personal wealth offshore, according to financial advisers familiar with the details.

An Australian businesswoman who has worked in Hong Kong for 16 years lamented what she saw as Beijing’s tightening grip.

“China is just taking away more and more freedom from Hong Kong,” she said.

“I feel sorry for Hong Kong people, especially Hong Kong people … (here) for more freedom, a better economy, a better life, and now it’s going backwards,” the woman said.

Such concerns came as China’s top newspaper warned on Wednesday that outbreaks of lawlessness could damage Hong Kong’s reputation and seriously hurt its economy.

Calm has returned for now, but the events of recent weeks have set many people thinking.

“If it had escalated, I would consider moving elsewhere,” a 44-year-old hedge fund manager said of the ransacking of the legislature. “I employ four to five people in Hong Kong so yes, I would consider moving.”

(Additional reporting by Sumeet Chatterjee; Writing by Anne Marie Roantree; Editing by Paul Tait and Nick Macfie)

On July 4th, Americans celebrate life, liberty and the pursuit of hot dogs

Children in costumes march down Main Street during the annual Fourth of July parade in Barnstable Village on Cape Cod, Massachusetts, U.S., July 4, 2018. REUTERS/Mike Segar

By Peter Szekely

NEW YORK (Reuters) – Americans celebrated their nation’s 242nd anniversary of independence on Wednesday, with concerts, parades and a voracious display of hot dog-eating prowess in New York, as many cities and towns prepared for traditional fireworks displays after sundown.

At the White House, President Donald Trump planned to host a picnic for military families on the South Lawn during the afternoon, a few hours before fireworks were scheduled to light up the National Mall.

Independence Day festivities scheduled for Washington featured a concert by the National Symphony Orchestra on the lawn of the Capitol. “Margaritaville” singer Jimmy Buffett, The Temptations, The Beach Boys and Luke Combs will also perform.

The Fourth of July holiday marks the adoption of the Declaration of Independence by congressional delegates in Philadelphia on July 4, 1776.

The document declared the young nation’s independence from Great Britain and advanced the principle “that all men are created equal,” and had “certain unalienable rights” including “life, liberty and the pursuit of happiness.”

More than two centuries later, however, it was the pursuit of hot dogs that defined the holiday at Coney Island on the waterfront of New York’s borough of Brooklyn, where Nathan’s Famous held its 46th annual hot dog-eating contest.

Joey Chestnut once again dominated the competitive eating spectacle. The 34-year-old from San Jose, California, won his 11th “Mustard Belt” by downing an astonishing 74 wieners -topping the record of 72 he set last year.

In the women’s division, Miki Sudo, 32, of Las Vegas, won her fifth title by putting away 37 hot dogs.

Heat and humidity hung over the competition, as well as much of the country. The National Weather Service issued heat advisories for the Plains states eastward to the Mid-Altantic region. Temperatures were expected in the 90s with the humidity making it feel like 105 to 110 degrees Fahrenheit (40-43 degrees Celsius).

On a day that features countless patriotic parades nationally, the pro gun control group Moms Demand Action held several marches around the country, including one in Webster Groves, Missouri, where Democratic Senator Claire McCaskill joined them.

“It was hot! But wonderful,” McCaskill said on Twitter.New York is preparing to put on an evening fireworks display that ranks as the country’s largest, according to Macy’s, the retailer that sponsors the annual event.

More than 3 million spectators and 12 million television viewers are expected to watch 75,000 shells illuminate the night sky over the East River to the music of singer Kelly Clarkson.

Bostonians will celebrate with the Boston Pops along the Charles River, joined by pop vocalist Rachel Platten.

Los Angeles is also planning fireworks, as well as a concert and other celebrations at the Hollywood Bowl. Up the coast, San Franciscans can watch fireworks on the bay near the Golden Gate Bridge, if fog does not obscure the show.

In recent years, law enforcement agencies have been on the alert for suspicious activity during the holiday celebrations. Officials said they were taking extra precautions this year, but have not detected any credible security threats.

An Ohio man was arrested on Sunday on suspicion of planning to detonate a bomb at Cleveland’s Fourth of July celebrations.

(Reporting by Peter Szekely in New York; additional reporting by Dan Whitcomb in Los Angeles; editing by Frank McGurty and G Crosse)

China warns of more action after military drills near Taiwan

FILE PHOTO - China's aircraft carrier Liaoning (C) takes part in a military drill of Chinese People's Liberation Army (PLA) Navy in the western Pacific Ocean, April 18, 2018. Picture taken April 18, 2018. REUTERS/Stringer

By Ben Blanchard and Jess Macy Yu

BEIJING/TAIPEI (Reuters) – A series of Chinese drills near Taiwan were designed to send a clear message to the island and China will take further steps if Taiwan independence forces persist in doing as they please, Beijing said on Wednesday, as Taiwan denounced threats of force.

Over the past year or so, China has ramped up military drills around democratic Taiwan, including flying bombers and other military aircraft around the self-ruled island. Last week China drilled in the sensitive Taiwan Strait.

China claims Taiwan as its sacred territory, and its hostility towards the island has grown since the 2016 election as president of Tsai Ing-wen from the pro-independence Democratic Progressive Party.

China has been issuing increasingly strident calls for Taiwan to toe the line, even as Tsai has pledged to maintain the status quo and keep the peace.

Speaking at a regular news briefing, Ma Xiaoguang, spokesman for China’s Taiwan Affairs Office, said the message the People’s Liberation Army was sending with its exercises was “extremely clear”.

“We have the resolute will, full confidence and sufficient ability to foil any form of Taiwan independence separatist plots and moves and to defend the country’s sovereignty and territorial integrity,” Ma said.

“If Taiwan independence forces continue to do as they please, we will take further steps,” he added, without giving details.

The military’s drills were aimed at protecting peace and stability in the Taiwan Strait and the interests of people on both sides of it, Ma said.

In Taipei, the government’s China policy-making Mainland Affairs Council said the people of Taiwan could not accept China’s military pressure and threats which it said had damaged peace in the Taiwan Strait.

“The mainland side should not attribute the consequences of misjudgment to Taiwan. This is an extremely irresponsible act,” it added.

The Republic of China is a sovereign state, the council said, using Taiwan’s formal name, and will brook no slander or criticism from China.

“We sternly warn the other side, do not create incidents again. Only by abandoning armed intimidation, facing up to the reality of the separate control on the two sides of the Taiwan Strait, and having pragmatic communication and dialogue can the differences be resolved.”

Amid the growing tension with China, Taiwan’s defense ministry said on Tuesday it will simulate repelling an invading force, emergency repairs of a major air base and using civilian-operated drones as part of military exercises starting next week.

(Reporting by Ben Blanchard; Editing by Michael Perry)

Catalan separatists march in Brussels

Catalan separatists march in Brussels

By Clement Rossignol

BRUSSELS (Reuters) – Nearly 50,000 people marched through Brussels’ European quarter on Thursday in support of Catalan independence and the region’s president, who has avoided arrest in Spain by taking refuge in Belgium.

Before Carles Puigdemont addressed the crowd, many draped in Catalan flags, police estimated its size at 45,000. There were chants of “Puigdemont, President” from a generally good-natured throng, many of whom had traveled from Spain for the occasion.

Some carried placards criticizing the European Union for not pressuring Madrid. One sign showed the face of European Commission President Jean-Claude Juncker with the question: “Democracy? Some defend it when it suits them. Shame on them.”

Gloria Cot, a clerk from Barcelona who had just arrived in by coach, said: “Brussels is a kind of a loudspeaker for us.

“It is a loudspeaker so that people can know that we really don’t have a 100 percent democracy in Spain and that Catalonia has always been subjected to problems with Spain.”

Nuria Salvat, a student from Tarragona in Catalonia, said she had come to demand freedom for “political prisoners” – members of Puigdemont’s administration held in jail in Spain – and to support Puigdemont himself, who faces jail if he returns.

“Spain,” she said, “has always treated us very badly.”

A short distance away in the EU executive’s headquarters, Juncker’s deputy Frans Timmermans told reporters he welcomed the “very positive atmosphere” of the demonstration, which took place as campaigning has got under way for a Catalan election which Madrid hopes can end the deadlock created by its refusal to recognize an independence vote Puigdemont held in September.

But, the former Dutch foreign minister said, there was no change to Commission policy that the dispute with the Barcelona authorities, now removed from office, remains an internal one in which the EU has no need to intervene because Spain’s democratic constitution is functioning in line with EU values.

Accusing Puigdemont and his allies of undermining the rule of law by choosing to ignore a Spanish constitutional ban on secession rather than trying to change the constitution, Timmermans said they were jeopardizing basic freedoms and noted there had been big rallies in Spain on both sides of the debate.

“If you do not agree with law, you can organize yourselves to change the law or the constitution,” he said. “What is not permissible under the rule of law is to just ignore the law.”

(Additional reporting and writing by Alastair Macdonald; editing by Mark Heinrich)

Hezbollah says Saudi declares war on Lebanon, detains Hariri

Lebanon's Hezbollah leader Sayyed Hassan Nasrallah is seen on a video screen as he addresses his supporters in Beirut, Lebanon November 10,

By Tom Perry and Ellen Francis

BEIRUT (Reuters) – Hezbollah’s leader said on Friday that Saudi Arabia had declared war on Lebanon and his Iran-backed group, accusing Riyadh of detaining Saad al-Hariri and forcing him to resign as Lebanon’s prime minister to destabilize the country.

Hariri’s resignation has plunged Lebanon into crisis, thrusting the small Arab country back to the forefront of regional rivalry between the Sunni Muslim monarchy Saudi Arabia and Shi’ite revolutionary Islamist Iran.

Sayyed Hassan Nasrallah said Saudi Arabia’s detention of Hariri, a long-time Saudi ally who declared his resignation while in Riyadh last Saturday, was an insult to all Lebanese and he must return to Lebanon.

“Let us say things as they are: the man is detained in Saudi Arabia and forbidden until this moment from returning to Lebanon,” Nasrallah said in a televised speech.

“It is clear that Saudi Arabia and Saudi officials have declared war on Lebanon and on Hezbollah in Lebanon,” he said. His comments mirror an accusation by Riyadh on Monday that Lebanon and Hezbollah had declared war on the conservative Gulf Arab kingdom.

Riyadh says Hariri is a free man and he decided to resign because Hezbollah was calling the shots in his government. Saudi Arabia considers Hezbollah to be its enemy in conflicts across the Middle East, including Syria and Yemen.

Western countries have looked on with alarm at the rising regional tension.

U.S. Secretary of State Rex Tillerson warned other countries and groups against using Lebanon as vehicle for a larger proxy fight in the Middle East, saying Washington strongly backed Lebanon’s independence and respected Hariri as a strong partner of the United States, referring to him as prime minister.

“There is no legitimate place or role in Lebanon for any foreign forces, militias or armed elements other than the legitimate security forces of the Lebanese state,” Tillerson said in a statement released by the U.S. State Department.

The French foreign ministry said it wanted Hariri to be fully able to play what it called his essential role in Lebanon.

Hariri has made no public remarks since announcing his resignation in a speech televised from Saudi Arabia, saying he feared assassination and accusing Iran and Hezbollah of sowing strife in the Arab world.

Two top Lebanese government officials, a senior politician close to Hariri and a fourth source told Reuters on Thursday that the Lebanese authorities believe Hariri is being held in Saudi Arabia.

Nasrallah said Saudi Arabia was encouraging Israel to attack Lebanon. While an Israeli attack could not be ruled out entirely, he said, it was unlikely partly because Israel knew it would pay a very high price. “I warn them against any miscalculation or any step to exploit the situation,” he said.

“Saudi will fail in Lebanon as it has failed on all fronts,” Nasrallah said.

Riyadh has advised Saudi citizens not to travel to Lebanon, or if already there to leave as soon as possible. Other Gulf states have also issued travel warnings. Those steps have raised concern that Riyadh could take measures against the tiny Arab state, which hosts 1.5 million Syrian refugees.



Hariri’s resignation unraveled a political deal among rival factions that made him prime minister and President Michel Aoun, a political ally of Hezbollah, head of state last year.

The coalition government included Hezbollah, a heavily armed military and political organization.

Hariri’s resignation is being widely seen as part of a Saudi attempt to counter Iran as its influence deepens in Syria and Iraq and as Riyadh and its allies battle Iranian-allied Houthi rebels in Yemen.

Aoun told Saudi Arabia’s envoy on Friday that Hariri must return to Lebanon and the circumstances surrounding his resignation as prime minister while in Saudi Arabia were unacceptable, presidential sources said.

An “international support group” of countries concerned about Lebanon, which includes the United States, Russia and France, appealed for Lebanon “to continue to be shielded from tensions in the region”. In a statement, they also welcomed Aoun’s call for Hariri to return.

In the first direct Western comment on Hariri’s status, France and Germany both said on Friday they did not believe Hariri was being held against his will.

“Our concern is the stability of Lebanon and that a political solution can be put in place rapidly,” French Foreign Minister Jean-Yves Le Drian told Europe 1 radio.

“As far as we know, yes: we think (Hariri) is free of his movements and it’s important he makes his own choices,” he said.

Tillerson told reporters on Friday there was no indication that Hariri was being held in Saudi Arabia against his will but that the United States was monitoring the situation.

Posters depicting Lebanon's Prime Minister Saad al-Hariri, who has resigned from his post, are seen in Beirut, Lebanon, November 10, 2017.

Posters depicting Lebanon’s Prime Minister Saad al-Hariri, who has resigned from his post, are seen in Beirut, Lebanon, November 10, 2017. REUTERS/Mohamed Azakir


On Thursday, Hariri’s Future Movement political party said his return home was necessary to uphold the Lebanese system, describing him as prime minister and a national leader.

Aoun has refused to accept the resignation until Hariri returns to Lebanon to deliver it to him in person and explain his reasons.

Top Druze politician Walid Jumblatt said it was time Hariri came back after a week of absence “be it forced or voluntary”.

Jumblatt said on Twitter there was no alternative to Hariri.

In comments to Reuters, Jumblatt said Lebanon did not deserve to be accused of declaring war on Saudi Arabia. “For decades we’ve been friends,” he said.

“We are a country that is squeezed between two antagonistic interests, between Saudi Arabia and Iran,” he said. “The majority of Lebanese are just paying the price … Lebanon can not afford to declare a war against anybody.”

The Saudi foreign minister accused Hezbollah of a role in the launching of a ballistic missile at Riyadh from Yemen on Saturday. Saudi Arabia’s Crown Prince Mohammed bin Salman said Iran’s supply of rockets to militias in Yemen was an act of “direct military aggression” that could be an act of war.

Nasrallah mocked the Saudi accusation that Iran and Hezbollah were behind the firing of the missile from Yemen, saying Yemenis were capable of building their own missiles.


(Reporting by Dominiqu Vidalon and John Irish in Paris, Sarah Dadouch, Lisa Barrington, Laila Bassam and Tom Perry in Beirut; Writing by Tom Perry; Editing by Peter Graff)


Catalan strike severs road links as secessionist leaders regroup

Catalan strike severs road links as secessionist leaders regroup

By Silvio Castellanos

BARCELONA, Spain (Reuters) – A general strike called by pro-independence campaigners in Catalonia severed transport links on Wednesday, as leaders of its secessionist movement sought to regain political momentum after failing to agree a joint ticket to contest an election.

Protesters shut down roads, causing huge tailbacks into Barcelona, and some public transport ran minimum services in response to calls for action by two civic groups — whose heads were imprisoned last month on sedition charges — and a labor union.

People stood across dozens of major highways in the region waving placards and chanting “freedom for political prisoners”, TV and video images showed, while minor scuffles were reported on social media as police attempted to move protesters.

While many smaller stores left their shutters closed, most larger shops and businesses in the region appeared to be open as normal.

An uphill task awaited the political heavyweights of the independence campaign, whose parties jointly ran Catalonia for the last two years until Madrid sacked the region’s government in response to its independence push.

Deposed Catalan president Carles Puigdemont’s center-right PDeCAT and the leftist ERC of former regional vice president Oriol Junqueras had until midnight on Tuesday to agree a new pact, but they failed to meet that deadline, meaning they will contest the Dec. 21 vote as separate parties.

The central government in Madrid called the election last month after assuming control of Catalonia following its parliament’s unilateral independence declaration.

Puigdemont is in self-imposed exile in Belgium, while Junqueras is in custody on charges of sedition, rebellion and misuse of public funds.


Puigdemont, who faces the same charges and is the subject of a extradition request from Madrid, had ambitions to garner support for his independence campaign in the heartland of the European Union.

But that hope has fallen flat, and in an interview published on Wednesday he renewed criticism of the bloc’s executive.

“(EU Commission President Jean-Claude) Juncker welcomes mayors, governors … but he doesn’t want to meet me,” Puigdemont told Belgian Daily De Standaard.

“I’ve always been a convinced European … But the people who are running the EU now, are wrecking Europe … The gap between the Europe of the people and the official Europe is increasing.”

Catalonia’s secessionist push has plunged Spain into its worst political crisis in four decades, triggered a business exodus and reopened old wounds from the country’s civil war in the 1930s.

Prime Minister Mariano Rajoy, who has been unwavering in his opposition to any form of independence for Catalonia, said he hoped next month’s election would usher in “a period of calm” and business as usual for the region.

“I’m hoping for massive participation in the election.. and, after that, we’ll return to normality,” he said in the Madrid parliament building on Wednesday.

An opinion poll released on Sunday by Barcelona-based newspaper La Vanguardia showed Junqueras’ ERC could garner between 45 and 46 seats in Catalonia’s 135-strong regional assembly while Puigdemont’s PdeCat would win just 14 or 15.

In order to reach the 68-seat threshold for a majority, they would then have to form a parliamentary alliance with anti-capitalist CUP.

ERC and PDeCAT could still reach an agreement after the vote, but by standing together they could have held more seats, polls and projections from the 2015 election results showed.

Economy Minister Luis de Guindos told a banking conference in Madrid he hoped the election would revive the Catalan success story “during which it has enjoyed great economic and cultural prosperity together with a high level of self-governance.”

For some Catalans who ignored Wednesday’s strike — called by the CSC union and supported by civic groups Asamblea Nacional Catalana (ANC) and Omnium Cultural — that moment is already overdue.

“Why should I strike, nobody is going to raise my salary. In this world we have to work and not argue so much,” Jose Luis, a construction worker, told Reuters TV as he walked through Barcelona on his way to work.

“The politicians should work more and stop their silliness.”

(Additional reporting by Paul Day in Madrid and Robert-Jan Bartunek in Brussels; writing by John Stonestreet; editing by Paul Day)

Spain awaits next move by ousted Catalan leader from Belgium

Spain awaits next move by ousted Catalan leader from Belgium

By Raquel Castillo and Angus MacSwan

MADRID (Reuters) – Spain’s foreign minister said on Tuesday he would be surprised if Belgium granted political asylum to Catalan secessionist leader Carles Puigdemont, who turned up there after Madrid’s dismissal and takeover of Catalonia’s regional government.

By Tuesday, the Madrid government had gained the upper hand in the protracted struggle over Catalonia’s independence drive.

Resistance to Madrid’s imposition of direct control on the autonomous region failed to materialize at the start of the week on Monday. The secessionist leadership is in disarray, and attention is now turning to a regional election called by Prime Minister Mariano Rajoy for Dec. 21 as a way out of the crisis.

But Puigdemont, whose parliament declared an independent Catalan republic on Friday before being removed by Rajoy, remains a thorn in Madrid’s side. He was due to make a statement later on Tuesday in Brussels, where he was seen by journalists on Tuesday after having dropped out of sight for 24 hours.

Spain’s prosecutor called for charges of rebellion and other crimes to be laid against him, which carry combined sentences of more than 30 years in prison. Spain’s Supreme Court also began proceedings for rebellion against the Catalan parliament speaker and other senior lawmakers, a court spokesman said on Tuesday.

Any request for asylum in Belgium could lead to a diplomatic dispute between the two European Union nations. But Spanish Foreign Minister Alfonso Dastis appeared to play down that prospect for now.

“We have no certainty of what he is doing,” he told Cadena Ser radio. “We would be a bit surprised, given the situation regarding the right of asylum in Europe, but the actions of ex-president Puigdemont are not easy to foresee.”

Any decision would be up to Belgian courts, not the government, Dastis said. “If Belgium grants asylum to Puigdemont, it will not be a normal situation. Let’s leave it there for now.”

In Belgium, Puigdemont’s lawyer Paul Bekaert, a veteran human rights advocate, told Reuters his client was considering seeking asylum but it was not certain.

“We have not yet decided. We have a lot of time to decide,” Bekaert said. “We will see in the coming weeks what we are doing.”

While Belgium has an unusual track record in refusing to extradite Europeans wanted by other EU states, the main reason Puigdemont had come was to address a wider audience for Catalonia’s grievances against Madrid, Bekaert said.

European nations including Britain, Germany and France have backed Rajoy and rejected an independent Catalan state, although some have called for dialogue between the opposing sides.

The Spanish government has also said Puigdemont was welcome to take his chances and stand in the Dec. 21 election.


The political crisis, Spain’s gravest in the four decades since the return of democracy in the late 1970s, was triggered by an independence referendum in Catalonia on Oct. 1.

Though it was declared illegal by Spanish courts and less than half Catalonia’s eligible voters took part, the pro-secessionist regional government said the vote gave it a mandate for independence.

Some prominent ousted Catalan leaders, including Puigdemont and Vice President Oriol Junqueras, had said they would not accept their dismissal. But their respective parties, PdeCat and Esquerra Republicana de Catalunya, said on Monday they would take part in the Dec. 21 election, a tacit acceptance of direct rule from Madrid.

Two opinion polls showed support for independence may have started to wane. A Sigma Dos survey published in El Mundo showed 33.5 percent of Catalans were in favor of independence, while a Metroscopia poll published by El Pais put that number at 29 percent. That compared with 41.1 percent in July, according to an official survey carried out by the Catalan government.

Opponents of secession say a majority of Catalans want to remain part of Spain and did not take part in the referendum.

But some analysts say the dispute is not going to disappear anytime soon despite the present state of play.

“Spain is heading for a period of disruption, and like the UK and Brexit, having its policy agenda dominated by one political issue while other key challenges fade into the background,” said Raj Badiani, an economist at IHS Markit in London.

“A more tangible impact from the crisis could evolve from early 2018, with the uncertainty set to build as Catalans push harder for a legally binding referendum.”

The government’s move to impose direct rule received the backing of several influential Catalan business lobbies, which called on firms to stay in the region. The chaos has prompted an exodus of businesses from Catalonia, which contributes about a fifth of Spain’s economy.

Credit rating agency Fitch late on Monday said the escalation of tensions in Catalonia significantly worsened the outlook for Spain’s economic growth and could prompt negative action on the country’s rating.

In Barcelona, some people displayed exasperation.

“It’s a farcical and completely ridiculous situation,” said Ernesto Hernandez Busto, a 42-year-old editor. “This extreme nationalism, this separatism, has taken Catalonia to the most absurd situation and the worst inconvenience we have had in the last 40 years.”

(Additional reporting by Paul Day and Sonya Dowsett in Madrid, Lucasta Bath and Clement Rossignol in Belgium; Editing by Janet Lawrence)

Catalan police call for neutrality as Spain exerts control

Catalan police call for neutrality as Spain exerts control

By Jesús Aguado and Sonya Dowsett

MADRID/BARCELONA (Reuters) – Catalonia’s police force told its officers to remain neutral in the struggle over the region’s fight for independence on Saturday, a step toward averting possible conflict as the Madrid government starts to impose direct control.

Spanish Prime Minister Mariano Rajoy dismissed the Catalan government, took over the administration and called a new election after the regional parliament made a unilateral declaration of independence on Friday, aggravating Spain’s worst political crisis in four decades.

The declaration of Catalonia as a separate nation was almost immediately rendered futile by Rajoy’s actions, while other European countries, the United States and Mexico also rejected it and expressed support for Spain’s prime minister.

But emotions are running high and the next few days will be tricky for Madrid as it embarks on enforcing direct rule. Rajoy designated Deputy Prime Minister Soraya Saenz Santamaria to oversee the process.

The regional parliament’s vote, which was boycotted by three national opposition parties, capped a battle of wills between the independence movement, headed by the now-sacked Carles Puigdemont and the Madrid government.

The separatists say a referendum on Oct. 1 gave them a mandate for independence. However, less than half of eligible voters turned out for the ballot, which Madrid declared illegal and tried to stop.

Opinion polls show that more than half of the 5.3 million people eligible to vote in the wealthy northeastern region, which is already autonomous, do not want to break from Spain.

In an effort to defuse tensions, the regional police force urged its officers not to take sides, an internal note seen by Reuters showed.

There have been doubts over how the Mossos d’Esquadra, as the Catalan police are called, would respond if ordered to evict Puigdemont and his government.

The force is riven by distrust between those for and against independence and is estranged from Spain’s national police forces, Mossos and national officers have told Reuters. Some Catalan officers stood between national police and those trying to vote during the banned referendum.

“Given that there is it is likely to be an increase in gatherings and rallies of citizens in all the territory and that there are people of different thoughts, we must remember that it is our responsibility to guarantee the security of all and help these to take place without incident,” said the memo, which had no name attached to it.

Government buildings, the headquarters of national political parties, ports, airports, courts, and the Bank of Spain were being guarded, the Interior Ministry said. Units of the regional force could be replaced if events made that necessary, it said.

The Madrid government also sacked the Mossos’ chief, Josep Lluis Trapero, the official gazette announced on Saturday.

Trapero became a hero to the secessionists after his force took a much softer stance than national police in enforcing the ban on the referendum.

Spain’s High Court banned Trapero from leaving the country and seized his passport as part of an investigation for alleged sedition, although it did not order his arrest.

Prosecutors say he failed to give orders to rescue national police trapped inside a Barcelona building during pro-independence protests last month.

In Barcelona, thousands of independence supporters packed the Sant Jaume Square in front of the regional headquarters on Friday night, waving Catalan flags and singing traditional songs in the Catalan language as bands played.

Some analysts say that street confrontation is possible as Madrid enforces control, but there was no trouble overnight and the streets of Barcelona were quiet on Saturday.

Emmanuel Torcal, a 52-year-old businessman walking his dog, said he was sympathetic to independence but worried about the escalation and possible consequences.

“I sympathize but I have my life, my work, and this is affected. But I am Catalan and I say if we have to go, let’s go.”

The main secessionist group, the Catalan National Assembly, has urged civil servants not to follow orders from the Spanish government and to mount “peaceful resistance” while a pro-independence trade union, the CSC, called a strike.

The government said it would ensure a minimum service.


About 1,000 people took part in a pro-unity rally in Madrid on Saturday and others turned out in the northern city of Valladolid — an indication of the resentment the independence drive has caused in the rest of Spain.

Rosa Cano, a 26-year-old architect demonstrating in Madrid’s Plaza de Colon, said: “The most important thing is the unity of Spain and we have to fight for that. The declaration of independence was a joke.”

Aitor Sanchez, a 30-year-old worker, said he was saddened the government had taken control of Catalonia but it had no choice.

“These are delicate moments in our country. But I believe we must respect the law.”

The chaos has prompted a flight of business from Catalonia, which contributes about a fifth of Spain’s economy, the fourth-largest in the euro zone. Tourism in hugely popular Barcelona has been hit, and markets have shown signs of concern.

European leaders have also denounced the push, fearing it could fan separatist sentiment around the continent.

Catalonia has a litany of historic grievances, exacerbated during the 1939-1975 Franco dictatorship, when its culture and politics were suppressed.

The new regional election will be held on Dec. 21. But it is not certain whether this can resolve the crisis as it could increase the numbers of independence supporters in parliament.

(Reporting by Sonya Dowsett and Jesús Aguado, writing by Angus MacSwan, additional by Andrés González and Tomás Cobos, editing by Alexander Smith)

Catalan leader Puigdemont set to call regional election

Protestors carrying Catalan seperatist flags gather outside the Generalitat Palace, the regional government headquarters, in Barcelona, Spain, October 26, 2017. REUTERS/Yves Herman

By Sam Edwards and Julien Toyer

BARCELONA/MADRID (Reuters) – Catalan president Carles Puigdemont is set to call a snap regional election, political allies said, a move that could help break a one-month deadlock between the Madrid government and separatists seeking a split from Spain.

The uncertainty remained high however as Puigdemont who had announced he would deliver an address at 1.30 p.m. (1130 GMT), first delayed it by one hour and then canceled it, triggering speculation he could still change his mind.

Several members of his pro-independence coalition said he would dissolve the regional parliament and call the vote. The regional broadcaster said he would deliver a speech in the assembly at 5 p.m., as had initially been planned.

Barcelona-based La Vanguardia said he would call the vote for Dec. 20 and was taking the decision in a bid to persuade the government of Prime Minister Mariano Rajoy not to enforce direct rule in the region, which he might do as soon as Friday.

The Catalan secessionist drive is Spain’s worst political crisis since the military dictatorship of Francisco Franco ended in 1975. It has fractured society and hundreds of companies have left the region.

It is also the most serious challenge to the integrity of a Western European country since an independence referendum in Scotland in 2014, when voters in the end chose to stay part of the United Kingdom.

European leaders fear it could spur secessionist ambitions in other parts of the continent.

But cracks appeared late on Wednesday in the independence coalition as some members backed an election while others said there was no alternative to independence.

Within minutes of Thursday’s developments, several pro-secession lawmakers and mayors announced they were stepping down.

“I don’t share the decision to call an election. I am resigning as a lawmaker and a member of PdeCat (Puigdemont’s Catalan Democratic Party),” said Jordi Cuminal on Twitter.

Several hundred people also took to the streets and gathered on Placa Sant Jaume, in front of the Catalan government’s headquarters in central Barcelona.

“Puigdemont traitor,” a big banner read.

Far-left party CUP, a key support for Puigdemont’s minority government, said it would oppose a vote.

“Until now, pro-independence supporters had one problem: the Spanish state. If elections are called, they will have two,” it said on twitter.


Demand for Spanish debt and shares jumped when it emerged Puigdemont could call an election.

Spain’s 10-year government bond yield – which moves inversely to price – fell 6 basis points to 1.58 percent on the news. The stock index IBEX rose 1.9 percent to a four-week high.

“This news is positive for Spain because it looks like Puigdemont is looking for ways other than declaring independence,” said ING strategist Martin van Vliet.

“It sounds like he is calling these elections so that Madrid does not have to invoke article 155,” that would allow central government to suspend the wealthy region’s autonomy.

It is not yet clear whether Rajoy will impose direct rule as planned or simply seek the Senate’s authorisation to do so but stop short of making it effective.

His government said earlier this week that calling a snap election would not be enough, and Puigdemont would also have to withdraw an ambiguous declaration of independence he made on Oct. 10.

An election could either strengthen Puigdemont’s mandate if pro-independence parties won, or allow him a graceful exit if they did not.

An opinion poll published by the El Periodico newspaper on Sunday showed a snap election would probably have results similar to the last ballot, in 2015, when a coalition of pro-independence parties formed a minority government.

(Additional reporting by the Madrid newsroom; Editing by Angus MacSwan and Robin Pomeroy)

Crisis over Catalan independence nears crucial few days

Crisis over Catalan independence nears crucial few days

By Paul Day and Angus MacSwan

MADRID (Reuters) – Catalan separatist leader Carles Puigdemont is likely to go to Madrid on Thursday to explain his position on independence from Spain and try to stop the national government imposing direct control on the region.

The timing of Puigdemont’s appearance before the Senate suggests he is now unlikely to formally declare independence or call a snap regional election on Thursday, as many analysts had expected. He could still do this on Friday before the Senate strips him of his powers and imposes direct rule from Madrid.

An appearance at a Senate debate could pit Puigdemont face to face with Prime Minister Mariano Rajoy who is vehemently opposed to independence for Catalonia.

The political crisis, Spain’s worst since democracy was restored four decades ago, has become increasingly fraught at the prospect of civil disobedience and even confrontation if Madrid goes ahead with taking direct control of Catalonia in the next few days.

The conflict has caused deep resentment elsewhere in Spain, dented the prosperous region’s economy, and worried other European leaders who see it as fanning separatist sentiment elsewhere on the continent.

Secessionists in Catalonia say an independence referendum on Oct. 1 — which attracted a 43 percent turnout but was mostly boycotted by those Catalans who want to remain in Spain — has given them a mandate for statehood.

The Madrid government declared the referendum illegal and has spurned Puigdemont’s calls for dialogue, instead opting to take control of a region which now has a large measure of autonomy.

It has, however, invited Puigdemont to debate in the Senate.

“President Puigdemont is willing to attend the Senate to explain the allegations, explain his political position, and explain how we have arrived here,” a lawmaker for PDCat (Catalan Democratic Party) said on Wednesday.

Thursday would be the most convenient day, he said.

However, Puigdemont is unlikely to make much headway against a government which vehemently opposes full independence and is using all its legal and political power to stop it.

On Friday, the Senate is due to strip him of his powers and impose direct rule, although the actual steps could be taken gradually in order not to inflame the situation.


Catalonia said on Monday it was confident its officials, including the police, would defy attempts by Madrid to enforce direct rule.

A senior Catalan politician said on Tuesday secessionist leaders may call a snap election to try to break the deadlock. The Catalan parliament meets on Thursday and Friday.

Some Spanish political and business leaders, along with most Catalan newspapers, have urged Puigdemont to call a regional election before he is stripped of his authority. They say direct rule from Madrid would be a humiliation for Catalonia and pose a serious risk of civil unrest.

Calling an election could either strengthen Puigdemont’s mandate if pro-independence parties won, or allow him a graceful exit if they did not.

An opinion poll published by the El Periodico newspaper on Sunday showed a snap election would probably have results similar to the last ballot, in 2015, when a coalition of pro-independence parties formed a minority government.

Justice Minister Rafael Catala said that if Puigdemont appeared before the Senate, it would help resolve the crisis. Madrid has so far refused to meet him until he drops his call for independence.

“If his appearance is within the constitution and the law we’ll be delighted…but if it’s just to ratify his position on Catalonia’s independence, sadly we will not be able to do anything else than continuing with the measures already set by the government,” Catala said.

Analyst Antonio Barroso of Teneo Intelligence said Puigdemont was caught between radicals and moderates in the Catalan establishment.

Radical elements want him to make the Catalan parliament declare independence unilaterally on Thursday or Friday. This would provoke a tough government reaction, playing into their hands, he said.

More moderate voices have said that if he calls an early election, he could stop the imposition of direct rule.

Puigdemont is likely to repeat his call for a dialogue between the Catalan authorities and Madrid and remain ambiguous on his next steps, Barroso said.

“Both sides are engaged in a game to tag each other with the blame for what happens next,” he said.

(Reporting by Paul Day,; Writing by Angus MacSwan; Editing by Julien Toyer and Richard Balmforth)