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Catalonia ‘chaos’ serves as warning to investors

17 October 2017

As the chaos in Catalonia rages on, the CEO of deVere Group warns that the increasing uncertainty will create turbulence in the financial markets.

Nigel Green, founder and CEO of deVere Group, said: “The aftermath of geopolitical events of this magnitude have the potential to influence capital markets which, of course, drive investor returns.

“Up until now the chaos in Catalonia had been largely dismissed by global investors as a regional issue. However, a considerably heightened game of cat and mouse between Barcelona and Madrid has been started and this could have far-reaching economic consequences in the short and longer term.”

The warning from Green follows a speech by the president of the Catalan government, Carles Puigdemont, in which he said Catalans had “won their right to become an independent country” from Spain following the disputed referendum on 1 October.

Green said in the short term, the events will lead to turbulence in the domestic and regional financial markets, while in the longer term, if Catalonia splits, Spain’s economy could lose 20% of its revenue.

Green continued: “The Catalonia independence crisis could push Spain’s recent economic progress back. This would inevitably weaken the wider eurozone’s economic stability by pushing the bloc into another era of grinding uncertainty.

“The chaos in Catalonia is a wake-up call for global investors to ensure that they are properly diversified across asset classes, sectors and regions, in order to mitigate the risks of the fall out of this and other key geopolitical events and also – crucially – to take advantage of significant opportunities that they simultaneously present.”

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