ON THE morning of October 30th five police vans staked out the Palace of the Generalitat, the part-medieval seat of the government of Catalonia on the Plaça Sant Jaume in Barcelona’s gothic quarter. But there was no sign of Carles Puigdemont, Catalonia’s now ex-president, nor of any demonstrators protesting against his dismissal by the Spanish government. Instead, there were foreign journalists waiting for the clash that didn’t happen.

Three days earlier, Plaça Sant Jaume overflowed with a euphoric crowd celebrating a declaration of independence by the Catalan parliament. “Freedom”, they chanted. “It’s a dream, it’s marvellous,” said David Regalos, an estate agent who had brought his teenage daughter for what he saw as a historic occasion. “It may hurt the business I work in,” he admitted, “but I’m thinking of the future of my children.”

But as dusk fell with an autumnal chill, the dream was revealed to be delirium. Even as the crowd caroused, in Madrid Mariano Rajoy, Spain’s prime minister, announced that the government was taking direct charge of Catalonia, using extraordinary powers under Article 155 of the constitution of 1978. The move was approved by Spain’s Senate minutes after the vote in the Catalan parliament. The government swiftly sacked Mr Puigdemont and his government, and replaced the commander of the Catalan police. And, to the surprise of many, Mr Rajoy called a regional election in Catalonia for December 21st.

By abbreviating direct rule to the minimum, he removed much of its sting. Mr Puigdemont called for “democratic opposition”, but he opted not to organise resistance on the streets of Barcelona. Instead, he fled to Brussels. Spain’s National Court is to investigate him and his colleagues over charges of rebellion, which carries a sentence of up to 30 years. Summonsed to appear on November 2nd, he said he would stay in Belgium until he receives guarantees of a “fair trial”.

Enabling Catalans to vote swiftly may help to release the tension that accumulated in the region before and after the unauthorised referendum on independence held on October 1st by the Generalitat. But it cannot hide the gravity of Spain’s underlying constitutional crisis. Article 155, which is an almost exact copy of a provision in the German constitution, has never before had to be invoked.

“This is a momentous decision,” said a senior official in past Socialist governments. “It supposes the breakdown of the constitution’s territorial model” under which Spain decentralised many powers and revenues to 17 self-governing “autonomous communities”. The constitution, which ushered in democracy after Franco’s long dictatorship (and was approved overwhelmingly by Catalans), has given Spain the best years of its modern history. Since 1978 the country’s income per person has doubled in real terms while regional inequalities have narrowed. Spain has built an advanced democracy, created a welfare state and cast off its past isolation to join the European Union. Although the slump that followed the bursting of a housing bubble in 2008 inflicted much hardship, Spain avoided social conflict.

The aftermath of austerity eroded but did not break the two-party system, in which the Socialists and Mr Rajoy’s conservative People’s Party (PP) have alternated in government. Despite the emergence of Podemos, a populist far-left party, Mr Rajoy, who governed alone in 2011-15, managed to form a minority administration last year with the support of Ciudadanos, a new centre-right party. But having held Podemos at bay, Mr Rajoy has found that populism in Catalonia poses an even bigger problem, notes a former minister.

In the land of make-believe

Mr Puigdemont called the application of Article 155 “the worst attack on the institutions of Catalan self-government” since Franco. His critics say he precipitated it, starting with laws his parliament approved in September to call the referendum and begin the transition to an independent state. As well as violating the Spanish constitution, these implicitly abolished the Catalan autonomy statute. The government was not “suspending autonomy but…returning Catalonia to self-government and legality as soon as possible,” declared Mr Rajoy.

According to the Generalitat, 43% voted in the referendum (90% of them Yes), though the numbers cannot be verified. Buoyed by a wave of international sympathy, which was brought about by the government’s disastrous deployment of riot police who tried and failed to stop the vote, Mr Puigdemont took the result as a mandate for a unilateral declaration of independence. That prospect has prompted more than 1,800 companies to move their legal domicile out of Catalonia since October 1st. Tourist bookings and consumer confidence have both fallen. Alarmed, moderate nationalists pressed Mr Puigdemont to draw back. On October 26th he was poised to do so by calling a fresh regional election himself, which would have stalled Article 155.

But faced with accusations of treachery from hardline nationalists, he instead pushed the Catalan parliament to pass a resolution “constituting the Catalan republic as an independent and sovereign state”. Approved by 70 votes out of 135 (the opposition walked out), it was a hollow declaration. No country recognised it. Privately, officials of the Catalan government admitted they were completely unprepared for statehood. Evidently, they were also unprepared for the consequences of declaring independence.

Things fall apart

So why did it happen? Mr Puigdemont, an affable former journalist and mayor of Girona, blamed the government’s refusal to talk. Mr Rajoy’s riposte was that Mr Puigdemont only ever wanted to talk about holding a referendum, although the constitution, in line with the continental European norm, does not recognise a right of self-determination for regions.

In the end Mr Puigdemont was as much the prisoner as the leader of the grass-roots independence movement the Catalan government has promoted. After the referendum, separatists were further inflamed by the jailing, pending trial for obstructing a police raid, of the leaders of two secessionist social movements. They formed part of what in Barcelona was called “the general staff of the independence process”, seeming to co-govern with Mr Puigdemont.

While the government underestimated the strength of the independence movement, its leaders overestimated it. Josep Borell, a Catalan former Socialist minister and opponent of independence, says that he has “lifelong friends with whom I can no longer talk”. Some bookshops in small-town Catalonia now refuse to stock his best-selling book questioning the secessionists’ arguments. In this conflict, propaganda is the key weapon, he adds, and “they use it very well and the government and unionist groups very badly.”

However, the Generalitat fell into the trap of believing its own propaganda. First, it denied that companies would leave, and then minimised their departure, saying they would return. “That is not so easy,” says a Catalan business leader, citing the parallel with Quebec. Montreal never recovered its position as Canada’s leading business centre after the secessionist scare in the 1980s and 1990s. That may be Barcelona’s fate: companies will gradually transfer head-office functions and jobs, predicts Antón Costas, an economist at the University of Barcelona.

Second, Catalan officials always thought that the EU would embrace their cause, although there was no reason to believe that. They failed to appreciate that outsiders were left open-mouthed by their comparison of Catalonia’s plight within Spain to Lithuania’s liberation from the Soviet Union or Kosovo’s from Serbia.

Third, they seemed to believe their populist claim to speak for “the Catalan people”. No sooner had they stated that 2.3m people voted on October 1st than they started claiming that police had “stolen 700,000 votes”, for which there is not a scrap of evidence. After the independence vote in the parliament, Mr Puigdemont declared that “the immense majority” of Catalonia’s political representatives “have fulfilled a mandate validated by the ballot box”. The reality is that independence has never commanded a majority, despite a post-referendum spike in a poll this week (see chart 1). The ruling coalition won only 48% of the vote in the 2015 regional election; it had a bare majority of seats in the dissolved parliament only because of the over-representation of the region’s interior. Catalonia is more divided and angrily polarised than at any time since 1978. The better-off, and those in smaller towns or with Catalan-speaking parents, favour independence; poorer Catalans, and those living in greater Barcelona or immigrants from the rest of Spain do not.

Plaça Sant Jaume has seen it all before. In the 1930s the Second Republic granted self-government to Catalonia. Yet on October 6th 1934—two years before Franco started the civil war—Lluís Companys, the Catalan president, appeared on the balcony of the Generalitat to declare a “Catalan state”. It lasted just ten hours. “Even if we lose,” Companys had said, “Catalonia will win because we need martyrs who will tomorrow assure definitive victory.” It is easy to see a parallel in Mr Puigdemont’s conduct. By the same token, he sees himself as the inheritor of a long tradition. He styles himself “the 130th president of the Generalitat”. But if nations are “imagined communities”, as Benedict Anderson, a historian, wrote, Catalonia is more imagined than most. “Before the 20th century, there was no nation called Catalonia,” writes Jordi Canal, a Catalan historian. The Generalitat began as a feudal institution in the Frankish County of Barcelona. This was absorbed first into the Crown of Aragon and then that of Spain. The region’s emergence as the industrial powerhouse of Spain brought social upheaval and immigration—and a cultural renaissance centred on the revival of the Catalan language, which in turn spawned a nationalist movement among the powerful Catalan bourgeoisie. According to Mr Canal “It was the nationalists who, from the late 1890s, set out to build a nation and to nationalise Catalans.” Something similar happened in the Basque Country and to a lesser extent Galicia, which each have their own language. These regional exceptionalisms challenged a weak Spanish state, whose impulse was to centralise. In the parliamentary debate on the Catalan statute of 1932, José Ortega y Gasset, Spain’s foremost 20th-century philosopher, argued that Catalonia was a “perpetual” problem that “cannot be settled, it can only be lived with”. Manuel Azaña, the prime minister (later president) of the Republic, replied that Spain should positively embrace its regional diversity as part of its “spiritual wealth”, recognised in self-government.

That was the spirit, too, of the 1978 constitution, albeit flawed by the dilution of regional exceptionalism with decentralisation for the whole country. Nevertheless, the constitution was approved by 91% of voters in Catalonia on a 68% turnout. For years, it satisfied the nationalists. But then several things came together to ignite the drive for independence. The first was an ill-fated attempt in 2006 by a Socialist-led regional government to reform the Catalan statute, giving the Generalitat more powers (over the courts, for example) and in tortuous phrasing recognising Catalonia as a nation. “The whole process was unfortunate,” says the Socialist former official, who was involved in it. “Nobody had demanded a new statute, the negotiation was very chaotic and they came up with a jigsaw puzzle that didn’t fit.” Approved by 73% in a referendum (with a 49% turnout) in Catalonia, the 2006 statute was then partially rejected by the Constitutional Tribunal in 2010. That turned it into a casus belli. The tribunal’s ruling coincided with the onset of the economic slump. Artur Mas, the nationalist president of the Generalitat, at first had no compunction about applying austerity. In June 2011 several thousand indignados surrounded the Catalan parliament to protest against his budget cuts. That prompted him to demand fiscal concessions from Mr Rajoy, just when Spain was on the brink of having to seek a European bail-out. Rebuffed, he launched the drive for an independence referendum.

Umbrage in Catalonia

Another red rag to Catalan nationalism was the PP. It had campaigned against the new statute. Many Catalans see the party as the embodiment of Castilian centralism, and feel marginalised by its drive to aggrandise Madrid. The Spanish state has failed to base any important institutions in Barcelona, for example. Many PP politicians in turn blame the rise of secessionism on what they see as the disloyal abuse of self-government by the Generalitat systematically to build a nation. This has had “very effective levers” in “the education system, the public and subsidised private media, and the gradual acceptance of the disappearance of the symbols of the state and of Spain in Catalonia”, Josep Piqué, a Catalan former PP minister, told El País, a Madrid newspaper.

Mr Puigdemont’s flight to Brussels marks the end of what Catalans call the procés, the drive for an independence referendum. “Now the movement will concentrate on defending its leaders,” says Andreu Mas-Colell, the economic councillor in Mr Mas’s government. Even if the separatist coalition stays together and wins the election, after the October debacle it is unlikely to do so on a platform that gives priority to independence.

Must Spain “live with” an unresolvable Catalan problem? On paper, it is not hard to sketch a new solution: Catalans would probably settle for a bit more money, guarantees for the Catalan language and symbolic recognition of Catalonia as a nation. Another approach would be federalism, which would clarify responsibilities. Since change to the constitution and Catalonia’s statute requires a referendum, it could offer the vote the nationalists want.

But is any of this politically doable? In return for Socialist support over Article 155 Mr Rajoy agreed to a congressional committee to discuss constitutional reform. Mr Mas-Colell is sceptical that it will produce anything useful. In the past two months, Catalan nationalism has awakened its dormant Spanish counterpart. Many Spaniards see Catalans as tight-fisted whingers. Supporters of the PP and of Ciudadanos, formed to oppose Catalan nationalism, want to roll back decentralisation.

The underlying task is the restoration of mutual trust between Catalonia and the rest of the country. “This is an emotional problem, and the solution has to be emotional,” says Javier Vega de Seaone of the Circulo de Empresarios, a business group.

The Catalan crisis is merely the most dramatic sign that Spain’s constitution needs updating. Decentralisation across the country has added complexity and thrown up regulatory barriers. And Spain’s entry into the EU in 1986 removed powers from the central government. “The important thing is that constitutional reform doesn’t become a price to be paid but rather is a shared project,” says José Maria de Areilza, a law professor at ESADE, a business school.

The transition to democracy generated a sense of purpose in Spain that has recently been missing, despite the country’s vigorous economic recovery. Spain’s leaders now have a choice. They can let the Catalan problem fester, or they can use it as the spur for national renewal.