MADRID • Spanish Prime Minister Mariano Rajoy urged Catalonia's leader yesterday to "act sensibly" and renounce an independence attempt to head off a threat by Madrid to impose direct rule, a prospect that has sent shock waves across the country.
Mr Rajoy issued his appeal in the national Parliament, where he sought to win more political support for his threat to take direct control of Catalonia today unless the rebel regional government drops its plan to break away.
The move would need only a vote in the Upper House, where Mr Rajoy's People's Party holds an absolute majority. It would be the first time in Spain's four decades of democracy that direct rule has been imposed.
That prospect in the euro zone's fourth-largest economy has prompted hundreds of Catalan companies to move their headquarters, led Madrid to cut economic growth forecasts and rattled the euro currency.
Regional leader Carles Puigdemont has already defied Madrid once this week, reiterating on Monday that an ambiguous independence declaration he made last week and immediately suspended.
"I ask Puigdemont to act sensibly, in a balanced way, to put the interests of all citizens first," Mr Rajoy said, mentioning both residents of the autonomous region, which produces a fifth of Spain's wealth and has its own language and culture, and the rest of the country.
Today's deadline is Mr Puigdemont's last chance to abandon an independence declaration which Madrid has rejected as illegal.
"It's not that difficult to reply to the question: Has Catalonia declared independence? Because if it has, the government is obliged to act in one way, and if it has not we can talk here," Mr Rajoy said in Parliament.
The row has rattled financial markets and sent companies scurrying to relocate to safer ground. Banco Sabadell, Spain's fifth-biggest bank, is considering moving its top management to Madrid.
Almost 700 companies pulled out of the northeastern region between Oct 2 - the day after a referendum on independence which Madrid branded illegal - and Oct 16, according to Spain's companies registry.
Tourism, a vital part of the Catalan economy centred on its seaside capital, Barcelona, has also taken a hit, with activity falling 15 per cent so far this month, industry association Exceltur said on Tuesday.
As the threat of direct rule neared, the Catalan government has taken a combative tone.
"Giving in forms no part of this government's scenarios," spokesman Jordi Turull has said.
Tempers have flared since Monday after the jailing of two separatist leaders pending an investigation for alleged sedition.
Tens of thousands of protesters gathered along Barcelona's Diagonal Avenue on Tuesday to call for the leaders' release, whistling and shouting "freedom" and "out with the occupying forces".