Bloomberg macro commentator Mark Cudmore said Germany’s election at the weekend indicates divisions in Europe have mounted and the planned Catalonia independence referendum in Spain is an even bigger problem for the region.
The main parties in Germany received their worst election result since the 1940s and the election saw a surge by the right-wing Alternative for Germany (AfD).
Mr Cudmore warned divisions are breaking out across Europe with the Catalonia independence referendum, already mired in controversy, set to take place despite efforts by the Spanish Government to stop it.
He said: “Divisions within Europe are mounting again.
“Any success by Catalonia sets a dangerous precedent for other want-away regions, not just in Spain.
“It emphasizes that many of the structural imbalances in the euro zone haven’t been fixed.
“Inequality is still growing.”
The region of Catalonia is set to have a referendum on whether it should be independent from Spain on October 1.
But the Spanish Government has claimed the referendum is illegal and opposes any self-determination vote.
Spanish police have arrested 14 people including the Catalan junior economy minister in dawn raids over the region’s referendum.
The Catalan Government have slammed the “aggressive” operation.
Mr Cudmore said the response by the Spanish Government has “elevated the probability of civil unrest” and “will lead to an increasing clamor for Catalan separation”.
He said: “The seriousness of the situation seems to have been overlooked by many investors, but it won’t be for much longer.”
Mr Cudmore said the AfD’s success in Germany at the weekend is a “reminder that large swathes of the populations remain unhappy with the region’s policies”.
Today, the Spanish authorities stepped up their drive to prevent the Catalonia independence from taking place by raiding 31 town halls across the region.
Spanish Prime Minister Mariano Rajoy has defended the raids, but the Catalan Regional Government is set to hold an emergency meeting on Wednesday morning.