The ruling parties of Catalonia have sought guidance from Brussels on the legality of secession from Spain, requesting a “route map” for membership of the European Union and the euro as an independent state.
It is the latest move in a fast-escalating clash between Catalan nationalists and Spanish nationalists, the latter backed by King Juan Carlos and the Spanish military.
Jose-Manuel Garcia-Margallo, the foreign minister, threw down the gauntlet, calling Catalan secession “illegal and lethal”. He warned that Spain would use its veto to stop the region of Catalonia becoming an EU member “indefinitely”.
The constitutional crisis has eclipsed the parallel drama of a Spanish bail-out request from the European Stability Mechanism. It is no longer clear whether premier Mariano Rajoy can deliver on any austerity deal with Brussels.
Catalan leader Artur Mas held high-stakes talks with Mr Rajoy in Madrid on Thursday, armed with a mandate from the Catalan parliament and with charged emotions left from an unprecedented protest by 1.5m people in Barcelona 10 days ago.
He demanded an independent treasury for the rich Catalan region, with control over its own tax base akin to the model already enjoyed by Basques. The 9m Catalans have an economy the size of Austria’s.
Catalonia’s parliament will meet next week to “think deeply” about its next fateful step. “Catalonia will follow its path. We have no enemies but we will build our own project as a country,” said Mr Mas.
The newspaper Confidencial reported that his Convergència i Unió (CiU) party and coalition partners have asked the European Commission whether Spain can prevent Catalans exercising democratic self-determination, and whether a sovereign Catalonia could remain part of the EU’s single market and the euro.
The speed of events has caught almost everybody by surprise, including Mr Mas himself. His CiU has, until now, pursued a policy of calculated ambiguity over secession. Mr Mas has pivoted quickly, embracing what he calls the “popular outcry” as his own.
The antagonisms date back to the Franco era and, above all, to 1714 when Philip V abolished all Catalan institutions, and imposed Castilian laws and absolutism by right of conquest.
Diplomats say Mr Rajoy’s Partido Popular has provoked the latest eruption of fury by exploiting the economic crisis to break the power of the regions. This came to a head over the summer when Catalonia was forced to request a €5bn rescue from Madrid, though it is a net contributor to the Spanish state.
Spain’s economic slump has frayed nerves across the country, much as it did before the Civil War in the 1930s. Unemployment has risen to 25.1pc and may go higher as the delayed effects of austerity bite deeper.
Citigroup expects the economy to contract by 3.2pc next year and 0.8pc in 2014, pushing public debt to 100pc of GDP.
Chief economist Willem Buiter said the mix of austerity and reform will not restore Spain to “fiscal sustainability”, even if EU loans keep Spain going for another couple of years. He expects “debt restructuring” in the end. The warm glow of the European Central Bank’s bond plan helped Spain sell 10-year debt at 5.66pc on Thursday, the lowest since February.
Mr Rajoy appears to determined to play for time, hoping that he can muddle through without a rescue.
Traders say such gamesmanship is unlikely to succeed for long. Mr Rajoy also hopes to siphon off part of the €100bn in EU rescue package for Spanish banks, but this is certain to infuriate Germany’s Bundestag.
Spanish politics are now intruding, in any case. An EU bail-out memorandum would have to include fiscal restraint for the regions, further inflaming Catalonia.
The risks of a misjudgement are growing. The king caused irritation in Catalonia this week by warning against the seduction of “chimeras” – his first such crisis intervention since 1981.
A serving army officer, Colonel Francisco Alaman, has fuelled the flames by comparing the crisis with 1936 – when Gen Francisco Franco seized power – and by vowing to crush Catalan nationalists, described as “vultures”.
“Independence for Catalunya? Over my dead body. Spain is not Yugoslavia or Belgium. Even if the lion is sleeping, don’t provoke the lion, because he will show the ferocity proven over centuries,” he said.
Retired Lt-Gen Pedro Pitarch, a former army chief, said the words reflect “deeply-rooted thinking in large parts of the armed forces”. He also accused Madrid of bungling the Catalan drama disastrously.
“Are we looking at a failed state?” he asked. Investors holding Spanish debt are listening carefully.