Spanish markets plunge as tension over Catalonia rises

The escalating political crisis between Spain and Catalonia is taking an increasing toll on the economy. Spanish stock markets fell almost three points on Wednesday, the largest drop since Brexit. Meanwhile, with the Catalan government set to declare independence as early as Monday, companies are already drawing up plans to move their headquarters to other Spanish regions.

“This is a clear indication of how insane the regional government of Catalonia is,” said Luis de Guindos, the Spanish economy minister, in an interview with Bloomberg. He dismissed Catalan government calls for external mediation and insisted that independence “is not going to take place.”

The benchmark stock market index in Spain, the IBEX 35, fell 2.85% a day after Catalonia went on general strike and Spanish king, Felipe VI, seemingly opened the door to suspension of the region’s self-government in an unlikely and hawkish televised speech.