• Spain’s prime minister has proposed a referendum on whether Catalonia should be given greater autonomy, in a bid to dampen tensions between Madrid and Barcelona.
• While stopping short of offering the wealthy region a vote on full independence, this proposal will still be seen as an olive branch for many in Catalonia who simply want to see more devolved regional powers.

Analysis

• Catalonia, with its capital in Barcelona, is an autonomous Spanish region. It has a population of 7.5 million people, comprising roughly 16 per cent of Spain's population. It is among Spain's most prosperous regions, contributing a fifth of the country's 1.1 trillion-euro ($1.32 trillion) economy
• The regional government runs its own police and exercises significant powers in health and education. However, key areas such as taxes, foreign affairs, defense, ports, airports and trains are in the hands of the central government
• Pro-independence Catalans are unhappy with the limited autonomy the region enjoys. A common argument is that Catalonia contributes far more than it receives from the Spanish government, which is run from Madrid
• According to experts, lack of economic autonomy, especially, has made people angry. Most of Spain's regions pay taxes to the central government and then receive a portion in return to spend on health, education and public infrastructure, with the sole exceptions of the northern Basque Country and its twin region Navarre. These regions collect their own taxes and decide for themselves how to spend the money. Spain's refusal to extend these tax-and-spend privileges to Catalonia has fuelled outrage
• Many Catalans have also long stressed the region's cultural differences from the rest of the country, including its traditions and language, which were suppressed during the 1939-1975 dictatorship of General Francisco Franco
• The current movement for independence gained traction after Spain's Constitutional Court in 2010 struck down parts of a charter that would have recognized Catalonia as a nation within Spain and granted it greater autonomy. Since the court's ruling, hundreds of thousands of Catalan residents have taken to the streets every year on September 11, a Catalan holiday, to demand independence
• Support for secession received a fillip after Spain's harsh austerity measures during the 2008-2013 financial crisis. Many Catalans felt they could do better on their own
• Attempts to resolve the situation through talks have failed due to various reasons. The Spanish PM said he cannot discuss a referendum unless the constitution is changed, and invited Catalonia to work on changing it. The Catalan government, however, says its right to self-determination must be respected first before talks can proceed
• This is not the region's first attempt to hold a vote on the question of independence. While a non-binding referendum in 2014 was blocked by the court, the Catalan government still went ahead and staged an unofficial poll.