Catalonia- the Euro threat

With Catalonia wanting independence from Spain, what would happen to the Spanish economy and the effect on the Euro .

Well, to be clear the threat of independence and the impact on the Dpannish economy would be a disaster for financial markets . The reason is because Catalonia splitting from Spain would rock the stability of Spain and cause an exit on all fronts . In addition the uncertainty of where the country post split would be going would add further damage .

What we saw in Geeece in 2014/2015, would be considered a tea party to what would be seen globally for a Catalonian independent state. 

Euro 

The Euro would collapse and thus have a significant down wind effect on the rest of Europe. Confidence would be lost in Spain and be a major shock to the EU. This would take months for the EU to recover from this and would send the Euro crashing and financial markets to drop significantly. 

The independence call would have the effect of other minnow states looking for independence . The weak countries of the EU would be under further strain to recuperate from this and cause there economies to drift rudderless .

Bonds 

Bond prices in Spain would collapse and the yield would probably exceed 11%. In addition the other Eurobond prices would be shunted downwards with yields reflecting that downward push.

Summary 

This call for independence by Catalonia is not going away and it's a matter of time before they succeed . Be aware and be prepared as the speed of decent in the markets and the Euro will be very fast .