Country urges polls as pressure mounts on Catalan separatists

Hundreds of separatists were making large cash withdrawals from Catalan banks in protest at Madrid's announcement Thursday that it would take unprecedented steps to impose direct control over semi-autonomous Catalonia after its leader threatened to declare a breakaway state.

Autonomy is a hugely sensitive issue in Catalonia, which saw its powers taken away under Spain's military dictatorship -- and there are fears of unrest in the wealthy northeastern region if Madrid seeks to erode it.

Catalan chief Carles Puigdemont has warned any such move could push regional lawmakers to declare unilateral independence following a chaotic referendum on October 1 on whether to split from Spain.

Prime Minister Mariano Rajoy's cabinet is due to meet Saturday to decide which powers to seize from Catalonia, which controls its own healthcare, education and policing. Rajoy on Friday said a "critical point" had been reached in the crisis.

But Fernando Martinez-Maillo, number three in Rajoy's conservative Popular Party, said Spain could avoid such drastic measures if Puigdemont backs down before the Senate meets to discuss the plans, likely by the end of October.

Puigdemont "can change course, can return to constitutional legality," he insisted.

Major political parties, who have overcome their differences to work together on preventing a break-up of Spain, were meanwhile pushing for fresh elections in the Catalan parliament, dominated by separatists since 2015.

Fresh polls sanctioned by Madrid -- unlike the referendum, which had been ruled unconstitutional -- would give voters a say on how to move forward.

News reports said the government and opposition Socialists had agreed elections should be called as early as January, which Carmen Calvo, the Socialists' chief negotiator, confirmed.

"Obviously, there must be elections," Martinez-Maillo added.

Cash protest

In Barcelona, independence supporters queued at bank counters and cash machines in protest at the central government and at banks that have moved out of Catalonia, as the crisis sends jitters through one of Spain's most important regional economies.

Some protesters were making symbolic withdrawals of 155 euros ($183) -- a reference to Article 155 of the constitution, the never-before-used measure that Madrid is using to start taking control over Catalonia.

Others were opting for 1,714 euros ($2,023) in a nod to 1714, a highly symbolic date for independence supporters marking the capture of Barcelona by the troops of King Felipe V, who then moved to reduce the rights of rebellious regions.

"It's a way of protesting. We don't want to do any harm to the Spanish or Catalan economy," said Roser Cobos, a 42-year-old lawyer who had just taken out 1,714 euros from the counter.

"It's the only way in which Catalans can show their disagreement with the attitude of the Spanish state."

CaixaBank and Sabadell, the two biggest banks in Catalonia, are among over 900 companies that have shifted their registered domiciles to other parts of Spain in a crisis that is increasingly worrying investors as it drags on.

Madrid this week cut its national growth forecast for next year from 2.6 percent to 2.3 percent, saying the standoff was creating uncertainty.

EU refuses to mediate

The crisis has added to the woes of a European Union already struggling with Brexit -- but EU President Donald Tusk said Thursday that the bloc could not mediate between the two sides as the separatists keep demanding.

Brussels insists Catalonia is a domestic problem for Spain to solve.

"We have all of us our own emotions, opinions and assessments but formally speaking there is no space for EU intervention here," Tusk said as EU leaders gathered for a summit in Brussels.

German Chancellor Angela Merkel and French President Emmanuel Macron threw their weight behind Madrid.

"We back the position of the Spanish government," said Merkel, Europe's most powerful leader.

Home to 7.5 million people and accounting for about a fifth of Spain's economic output, Catalonia is fiercely attached to its own language and culture but is deeply divided over whether to break away from Spain, according to polls.

Puigdemont says he has a mandate to declare independence after the referendum, which his administration says resulted in a 90 percent "Yes" vote.

But turnout was given as only 43 percent as many Catalans who back unity stayed away from the vote.