(Bloomberg) -- Catalan separatists rebelled against their leader’s plan to draw back from declaring independence, forcing him to rethink his next move as Spanish authorities finalize plans to oust his insurgent administration.
After a day of confusion in Barcelona, President Carles Puigdemont said in a televised address that he had considered calling regional elections, but he didn’t get the concessions he sought from officials in Madrid. He still wants to explore all options for a solution to the showdown, he said.
As Puigdemont held out for a conciliatory gesture from the Spanish government, two lawmakers quit his party in frustration that he was climbing down. Demonstrators meanwhile gathered outside his office shouting "traitor."
Spanish senators are pushing ahead with legislation to hand Prime Minister Mariano Rajoy wide-ranging powers to seize control of the region under Article 155 of the constitution and forcibly remove the Catalan leadership.
"I tried to get the guarantees to carry out these elections. but didn’t get a responsible answer,” Puigdemont said. "There is no guarantee to justify calling elections.”
Barcelona is on a knife edge during a critical 48 hours for the biggest constitutional crisis the country has seen since an attempted coup in 1981. An election would have marked a capitulation by the separatist leadership after a week of heightened brinkmanship that left Puigdemont facing a make-or-break decision that could either ease tensions or see him unilaterally declare Catalonia a sovereign republic.
‘Farcical’
Spanish shares rallied, with the IBEX Index rising as much as 2.7 percent on reports that Puigdemont would call an election in a 1:30 p.m. speech. The statement was then postponed twice amid dissent within the separatist ranks. The index paired gains as Puigdemont spoke.
"Events have slipped from his control," said Angel Talavera, an analyst at Oxford Economics in London. "Today has been farcical."
Catalonia’s foreign affairs chief, Raul Romeva, suggested in an interview on Wednesday separatist leaders would consider dropping their demand for independence should the Spanish government offer a palatable way out.
In a speech to during the senate debate on Article 155, Deputy Prime Minister Soraya Saenz de Soraya said the simple truth is that the Catalans have no support.
"They have not brought the promised land and they have not found any recognition from any corner of the earth,” she said. “They don’t have the support of any serious country nor the comprehension of the European Union.”
Election Plan
Rajoy has sought to maintain political air cover for his hard line approach as the opposition Socialist Party balked at backing the Catalans into a corner.
The Socialists floated the idea that a snap regional election in Catalonia would be enough to stop Article 155 from being implemented. Barcelona-based newspaper La Vanguardia reported that Rajoy has accepted an amendment that would see Article 155 being suspended should a vote be called by Puigdemont.
Catalan pro-independence parties have clashed with Spain regularly, though not to this extent. In 2014, former President Artur Mas called a consultation vote before moving to a regional election. He lost his job.
Elections this time might not be enough to appease the 2 million or so supporters the independence campaign now claims to have.
The main activist group ratcheted up expectations of a dramatic statement on Friday. The Catalan National Assembly has called its members to surround the regional parliament from noon, a human shield against Rajoy’s authorities.
Puigdemont may be running out of options to bring them back onside.
"It’s such a fragile coalition and it only works as long as he is pushing forwards," said Talavera, the analyst. "If he takes any step back, they eat him alive.”