* Catalan separatist parties win majority in regional
* Main separatist group CiU loses ground as austerity weighs
* Artur Mas may not have mandate to hold independence
BARCELONA, Spain, Nov 26 (Reuters) - Separatists in Spain's
Catalonia won regional elections on Sunday but failed to get a
resounding mandate for a referendum on independence, which had
threatened to pile political uncertainty on top of Spain's
Catalan President Artur Mas, who has implemented unpopular
spending cuts, had called an early election to test support for
his new drive for independence for Catalonia, a wealthy but
financially troubled region in northeastern Spain.
Voters frustrated with the economic crisis and the Spanish
tax system, which they claim is unfair to Catalonia, handed
almost two-thirds of the 135-seat local parliament to four
different separatist parties that all want to hold a referendum
on secession from Spain.
But they punished the main separatist group, Mas's
Convergence and Union alliance, or CiU, cutting back its seats
to 50 from 62.
That will make it difficult for Mas to lead a united drive
to hold a referendum in defiance of the constitution and the
central government in Madrid.
"Mas clearly made a mistake. He promoted a separatist agenda
and the people have told him they want other people to carry out
his agenda," said Jose Ignacio Torreblanca, head of the European
Council on Foreign Relations' Madrid office.
The result will come as a relief for Spanish Prime Minister
Mariano Rajoy, who is battling a deep recession and 25 percent
unemployment while he struggles to cut high borrowing costs by
convincing investors of Spain's fiscal and political stability.
Mas, surrounded by supporters chanting "independence,
independence", said he would still try to carry out the
referendum but added that, "it is more complex, but there is no
need to give up on the process."
Resurgent Catalan separatism had become a major headache for
Rajoy, threatening to provoke a constitutional crisis over the
legality of a referendum just as he is trying to concentrate on
a possible international bailout for troubled Spain.
Catalonia shares some of its tax revenue with the rest of
Spain and many Catalans believe their economy would prosper if
they could invest more of their taxes at home. The tax issue has
revived a long-dormant secessionist spirit in Catalonia.
Mas had tried to ride the separatist wave after hundreds of
thousands of people demonstrated in the streets in September,
demanding independence for Catalonia, which has its own language
and sees itself as distinct from the rest of Spain.
In a speech to supporters on Sunday night Mas recognised
that he had lost ground and though CiU is still the largest
group in the Catalan parliament, he said he would need the
support of another party to govern and to pass harsh austerity
"We've fallen well short of the majority we had. We've been
ruling for two years under very tough circumstances," he said.
Catalonia's traditional separatist party, the Republican
Left, or ERC, won the second biggest presence in the Catalan
parliament, with 21 seats. The Socialists took 20 seats. And
Rajoy's centre-right People's Party won 19.
Three other parties, including two that want a referendum on
independence, split the remaining 25 seats. ECFR's Torreblanca
said the Catalan elections were similar to those around Europe
in that economic woes have benefited marginal political groups,
while larger, traditional parties have lost ground.
MAS MADE BIG BET
Mas's bet on separatism may have helped the big winner of
Sunday's election, the Republican Left, which more than doubled
its seats in the Catalan parliament to 21 from 10,
"He talked about it so much that he ended up helping the
only party that has always been for independence, which is the
Republican Left," said political analyst Ismael Crespo at the
Ortega y Gasset research institute.
Mas's CiU had always been a pro-business moderate
nationalist party that fought for more autonomy and
self-governance for Catalonia without breaking away from Spain.
Mas broke with that tradition in September when he made a
big bet on a referendum, tapping into a centuries old Catalan
dream of independence that is rooted in the Middle Ages when
there was a Principality of Catalonia.
Modern day Catalonia, with 7.5 million people, is more
populous than Denmark. Its economy is almost as big as
Portugal's and it generates one fifth of Spanish gross domestic
Since Spain returned to democracy in the 1970s after the
Francisco Franco dictatorship regions like Catalonia and the
Basque Country, which also has its own language, won significant
For several decades the Catalan independence movement had
died down. But it has flared up again in the economic crisis.
The momentum has been inspired in part by Scotland's plans
to hold a referendum in 2014 and by the break away movement in
Flanders. But it could subside as voters contemplate the
economic realities of independence especially if the price to
pay is leaving the European Union.
Wary that separatism could spread to the Basque Country and
beyond, Rajoy said this week that the Catalan election was more
important than general elections.
Home to car factories and banks and the birthplace of
surrealist painter Salvador Dali and architect Antoni Gaudi, the
region also has one of the world's most successful football
clubs, FC Barcelona.
SPENDING CUTS HURT MAS
After a decade of overspending during Spain's real estate
boom, Catalonia and most of the country's other regions are
struggling to pay state workers and meet debt payments.
Mas was one of the first Spanish leaders to embark on harsh
austerity measures after Catalonia's public deficit soared and
the regional government was shunned by debt markets. He has also
had to take billions of euros in bailout funds from the central
Josep Freixas, 37 and unemployed, voted for CiU but
recognised the party had lost seats "because people have been
really affected by the spending cuts and by the crisis."
At CiU headquarters on Sunday night Freixas carried a rolled
up pro-independence flag - a single star against yellow and red
stripes - that has become a symbol of the separatist movement.
Turnout was very high in the election, 68 percent, 10
percentage points higher than in the previous vote two years
Raquel Correa, a 30-year-old journalist, said she travelled
home from Brussels for the vote. She cast her ballot for
Republican Left, or ERC. "I think people who want independence
voted ERC because they are the real thing. They have fought for
independence for a long time."