The Spanish government is expected to announce severe austerity measures today in a climate that already teeters on the brink of disaster; a situation worsened by wide scale protests outside the Spanish parliament on September 25 and independence claims from Catalonia. In the meantime King Juan Carlos of Spain and Prime Minister Mariano Rajoy make trips overseas to try to buoy up the brand of Spain; an effort to promote everything that is good about Spain to investors.
Their efforts are in contrast to the announcement by Artur Mas, the leader of the Catalan autonomous region, for early elections in Catalonia. This month Catalans gathered in their thousands, some report more than a million, in Barcelona to demand full independence from Spain. Their economy is arguably the strongest in Spain and instead of being dragged into the bailout that Spain faces, they want a bigger share of tax revenues or complete control of their own economy.
The announcement today will be followed tomorrow with a report by independent auditors on the state of Spain’s banks. The world’s eyes will then be on Mr Rajoy as he makes the decision to request a formal bailout not just for the country’s banks but also for his beleaguered nation.