Catalan President Carles Puigdemont came under mounting pressure Friday as the radical faction of his separatist alliance pressed him to declare independence just as his region starts to suffer from the economic fallout of the crisis.
Spain's central government has given Puigdemont until next Thursday to abandon his push for secession, failing which it may trigger unprecedented constitutional steps that could see Madrid take control of the semi-autonomous region.
Such a move would anger independence supporters in the northeastern region and could cause tensions to boil over into unrest.
But any decision by Puigdemont to back down would also infuriate hundreds of thousands of Catalans who voted to break away from Spain in a banned referendum.
On the other hand, Catalonia is deeply divided over independence, and those who want to stay in Spain are increasingly making their voices heard, having staged two mass rallies in just five days.
- Pressure to break away -
On Friday, the far-left CUP party, an ally of Puigdemont's coalition government, warned in an open letter that "only by proclaiming a republic will we be able to respect what the majority expressed in the polls."
The referendum took place on October 1 despite a court ban that ruled it unconstitutional, and regional authorities say 90 percent chose to split from Spain in a vote marred by police violence.
Turnout was 43 percent, they say, but the figures are impossible to verify as the referendum was not held according to official electoral standards, with no independent commission to oversee the vote.
Puigdemont had pledged to declare independence if the "yes" vote won, but on Tuesday he gave an ambiguous statement.
Saying he accepted a mandate for "Catalonia to become an independent state," he immediately suspended the declaration, calling for more time for talks with Madrid.
Prime Minister Mariano Rajoy rejected talks, retorting that Puigdemont had until next Monday to clarify whether or not he would press ahead with secession and then until next Thursday to reconsider, otherwise Madrid would act.
What Puigdemont will do is unclear, but various allies of his are pressuring him to go down the independence route.
Apart from the CUP's open letter, the Catalan National Assembly, an influential pro-independence association whose followers are ready to take to the streets, called on him to lift his suspension of the independence declaration.
In a statement late Thursday, it said it made no sense to maintain it "given Spain's rejection of dialogue," adding it did not rule out more region-wide strikes like the one that hit Catalonia on October 3.
- Pressure to back down -
But uncertainty over the fate of the region of 7.5 million people has damaged business confidence, with several companies already moving their legal headquarters out of Catalonia.
Ratings agency Standard and Poor's said the region's economy risked sliding into recession if the crisis dragged on.
According to the El Confidencial online daily, the Mobile World Congress, the phone industry's largest annual trade fair, held every year in Barcelona, is considering delaying the next session planned for February 2018, and even leaving the seaside city altogether.
While not confirming either way, a spokeswoman for the congress told AFP "we are continuing to monitor developments in Spain and Catalonia and assess any potential impact."
Spain's CEOE business lobby group said this week that Catalonia was already "seriously affected by companies moving their headquarters, the cancellation of new investment, a reduction in tourist reservations and a general outlook of uncertainty and maximum concern."
It warned that the longer the crisis continued, "greater the deterioration of the Catalan economy would be."