Will Spain beat Greece to the punch?

"If the referendum for Catalan independence is approved by a large majority, Madrid will not be able to ignore Catalonia's request by declaring it unconstitutional. A defeat for Madrid in the upcoming elections will rock already jittery financial markets and send Spain's borrowing costs soaring, despite the threat of intervention by the ECB.

The social fabric of Europe is unraveling. It hardly matters if austerity is the right medicine for Southern Europe at this point: an economic solution that requires more time to bear fruit than the social and political realities allow for is an a priori failure. The question is not whether to invest in Europe today, but whether or not to invest in Today's Europe; which will likely be controlled by political parties with very different views about the sanctity of debt.

All but short-term traders should be wary of European financial institutions with high exposures to Spain in the weeks ahead of the Catalan elections in October. This includes Barclays (BCS), Deutsche Bank (DB). U.S. banks with significant exposure to Spain include Bank of America (BAC), Morgan Stanley (MS), Goldman Sachs (GS), JPMorgan (JPM), and Citigroup (C). Investors may also wish to initiate short positions in the iShares MSCI Spain Index (EWP)."

http://seekingalpha.com/article/896561-it-s-time-for-madrid-to-pay-the-piper?source=email_macro_view&ifp=0