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Catalonia strikes keep Europe's markets on edge

Tuesday, October 03, 2017 - 01:51

Barcelona metro stations were closed, pickets blocked main roads and civil servants walked out on Tuesday in response to a strike called by pro-independence groups after hundreds were injured in a Spanish police crackdown on a banned independence referendum. As David Pollard reports, borrowing costs across the euro zone are also rising as a result of the crisis.

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Catalonia protests - its local firemen on cordon duty. Their priority this time: to keep the political flames in check rather than real ones. While elsewhere they hold their own march too. After the violence that flared during its bid to hold an independence referendum, the region now caught in a day of demonstrations. Though these protesters do have jobs. A new point eight per cent rise in Spain's unemployment rate a reminder that 3.4 million people don't. (SOUNDBITE) (English) HEAD OF CORPORATE DEVELOPMENT, 7IM, JUSTIN URQUHART STEWART, SAYING: "Remember, unemployment is still at 17 percent overall. And the real damage caused by the euro which of course is youth unemployment is still incredibly high. If Catalonia does break away that's bad news for Spain." And (bad news) for the EU, which has called for talks between Madrid and Catalan leaders. Independence could potentially deprive Spain of a region that accounts for around a fifth of its economy. And threaten new uncertainties for its minority government. (SOUNDBITE) (English) HEAD OF CORPORATE DEVELOPMENT, 7IM, JUSTIN URQUHART STEWART, SAYING: "Spain's overall economy would have to adjust for such a major break away from it. Equally of course it wouldn't do Catalonia a great deal of good because its major market is actually the rest of Spain as well." That thought continued to play through Spanish stocks after their slide on Monday. Iberdrola among the biggest losers after markets reopened.... It and another Spanish utility, Red Electrica, downgraded by JPMorgan because of the political environment. While borrowing costs edged upwards. (SOUNDBITE) (English) NEIL WILSON, SENIOR MARKET ANALYST, ETX CAPITAL, SAYING: "There's lots of risks here. So far the markets are reacting pretty calmly. But I think if things get worse we could see the euro slide further." Though for the meantime, its losses have eased - as traders go into 'wait and see' mode. As have many locals caught out by the protests - hopeful of a break in the region's separatist gridlock.

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Catalonia strikes keep Europe's markets on edge

Tuesday, October 03, 2017 - 01:51