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Protesters Take to Street in Madrid

The pressures facing the government of Prime Minister Mariano Rajoy mounted on several fronts on Tuesday, as thousands of demonstrators besieged Parliament and Spain's two largest regions took steps that underscored their deepening economic troubles and displeasure with his austerity plans.

Presenting the biggest domestic political challenge, the leader of Catalonia, Spain's most powerful economic region, called an early election for Nov. 25 that could turn into an unofficial referendum on whether to split from the rest of the country.

Catalonia's demands for more autonomy have been fueled by its own financial problems, which forced the Catalan government last month to request $6.5 billion from an emergency fund of $23.3 billion set up by Mr. Rajoy's government to help regions meet their debt financing obligations.

Underlining its deepening financial difficulties, another region, Andalusia, said Tuesday that it was preparing to request $6.3 billion from the fund.

The developments unfolded as police officers and protesters clashed before the Parliament building and as Mr. Rajoy comes under intense pressure from investors and his European counterparts to clean up Spain's banks and public finances, particularly at the regional level.

The problems in the regions, both political and economic, appear to be intensifying, as Catalonia's move showed Tuesday, two weeks after a huge pro-independence rally in Barcelona.

"The voice of the street needs to be moved to the ballot boxes," the president of Catalonia, Artur Mas, told lawmakers at the regional Parliament. "We want to have the same instruments that other nations have in order to develop their own collective identity."

Following the Sept. 11 rally in Barcelona, Mr. Rajoy called on regions and their politicians to avoid raising tensions and instead to close ranks and help Spain emerge from its economic quagmire. Last week, in an unusual political foray, King Juan Carlos I also published a letter urging national unity.

"Mas has been under intense pressure to calm things down, even from the king, but what we now see is that far from taking any step back, Mas is in fact seeking a fresh mandate from voters to move things forward," said Josep Ramoneda, a Catalan political commentator and philosopher. The result of the vote, Mr. Ramoneda added, "will determine exactly how far and fast Catalonia moves toward independence."

Economists warned that the call for a Catalonia election added yet another element of uncertainty for Spain.

"Once comforted in power after elections, the government could then work more constructively towards a redefinition of the relationship between the central government and the regions," said Gilles Moëc, an economist at Deutsche Bank in London. "Still, in the meantime, political turmoil in Spain's richest region could generate the kind of market reaction which would precipitate a request for European support by Madrid."

Mr. Rajoy has been debating whether to tap into a new bond-buying program proposed by the European Central Bank. While such additional help would considerably alleviate Spain's debt problems, Mr. Rajoy finds himself in an increasingly tight bind between Spanish voters who oppose further cuts and investors and European finance officials demanding reassurance that Spain can meet budget deficit targets.

On Tuesday, Parliament took on the appearance of a fortress as about 1,400 police officers ringed the building to keep back demonstrators. The organizers of the latest protest said in a statement that they had no plans to try to occupy Parliament, but instead wanted to surround the building to show that "democracy has been kidnapped" by inept Spanish politicians.

Using their truncheons, the police scattered protesters in an effort to keep some approaches to the Parliament building open. By the evening, the police said that 10 people had been arrested and six had been injured.

Catalonia is the third region to call an early election, with the Basque region and Mr. Rajoy's home region of Galicia set to hold separate votes next month.

[Source: By Raphael Minder, The New York Times, Madrid, 25Sep12]

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