MADRID — Faced with the dilemma of being labeled a dictator or being ridiculed for inaction, Spanish Prime Minister Mariano Rajoy has chosen the former approach to the outlawed Catalan independence referendum planned for October 1.

While the conservative Spanish leader has the law on his side — the referendum has no legal backing since all measures taken by the pro-independence Catalan government and legislature have been suspended by the Constitutional Court — he risks further inflaming nationalist sentiment in Catalonia and moving the political discussion from the national and regional debating chambers onto the streets.

Televised images on Wednesday of armed Civil Guards raiding offices of the Catalan regional government and other facilities linked to the referendum, arresting more than a dozen officials and confiscating nearly 10 million ballot papers, were bound to spark protests in an independence movement that has so far been largely peaceful. On Thursday, the Constitutional Court imposed daily fines of up to €12,000 on members of the Catalan electoral board.

Separatist leaders and grassroots organizations quickly called on Catalans to take to the streets to defend their region's institutions and, after demonstrations went late into the night across the region, the protesters dug in on Thursday for a longer series of protests against the Spanish authorities. Thousands of protesters gathered around the courts in Barcelona that are handling the cases against Catalan officials, some of whom were still being held on Thursday.

The differences between Rajoy and Catalan regional President Carles Puigdemont now seem to be insurmountable.

“The referendum can’t be held anymore. It was never legal or legitimate … now it’s just an impossible fantasy,” the prime minister said Wednesday. He urged Catalan separatist leaders to abandon their plans, warning: “Give up on this escalation of radicalism and disobedience. You’re still on time to prevent worse evils.”

Puigdemont's response to the arrests was equally defiant. On October 1, he said, “we will leave home, we will take a ballot and we will use it.”

The regional leader said Spain had “de facto suspended the self-government of Catalonia and has applied a de facto state of emergency” and denounced the “totalitarian and undemocratic attitude of the Spanish state.”

Escalation risk

Both the Spanish and the Catalan governments are navigating uncharted waters, amid a dangerous dynamic where they seem to be reacting to their opponents’ actions rather than following a precise plan of action.

The ultimate milestone will be whether Puigdemont declares unilateral independence of Catalonia after the October 1 vote, if it goes ahead and if the secessionists win, or even if they can't carry out the vote — a scenario that various Spanish officials described as possible but not likely. Such a move would likely force Rajoy to take harsher measures and further increase the volatility of the situation.

Spanish officials, who have multiplied their media campaign efforts in the past few days, seem to be aware that the crackdown risks mobilizing support for independence in Catalonia. In regional elections in 2015, pro-independence forces obtained 48 percent of the vote, though recent opinion polls show a slight decline in support.

However, the Spanish government appears willing to take that risk.

Rajoy's determination to avoid a referendum has the backing at national level not just of his Popular Party but also the main opposition Socialists and the liberal Ciudadanos. Together, that adds up to nearly three-quarters of the Spanish Congress.

Among the wider Spanish public, there is little appetite for a referendum. In the latest survey by the public Center for Sociological Research, barely 10 percent of those polled backed the idea of the region being allowed to secede, which would require changes to the constitution.

The far-left protest movement Podemos and its allies in Catalonia, led by Barcelona’s Mayor Ada Colau, have denounced the Spanish state’s “repression” of Catalan authorities and advocated for a plebiscite on self-determination as the only way out of the crisis. The position could tip the scales in the separatists' favor in Catalonia.

Yet Spanish officials hope that what they describe as the radicalization of the independence movement will alienate moderate, middle-class people in Catalonia. “This started as a bourgeois revolution and is turning into a Bolshevik revolution,” said an official in the Popular Party leadership, arguing that many people in the wealthy region have much to lose if things get out of control.

Madrid began to mine that vein of arguments this week, with Rajoy saying Wednesday he was open to dialogue if the separatists moderate their position and could even be willing to discuss the “financing” of the region. Spanish Economy Minister Luis de Guindos told reporters earlier this week that Catalan economic output would suffer a 30 percent collapse if independence was achieved.

The current crisis has its roots in the co-financing arrangements between Madrid and Barcelona. In 2012, Puigdemont's predecessor Artur Mas was facing a scenario of economic collapse, social unrest and a political landscape under stress (as was Rajoy). He demanded that Madrid allocate more funds to the region — and Madrid's refusal eventually led Mas to endorse the campaign for independence.

“Instead of fighting the [economic] crisis and working towards economic growth and employment, as was their obligation, they preferred to pin the blame for everything on the others,” Rajoy said at a party meeting in Barcelona last week.

However, even some of those who are fiercely opposed to Catalan independence criticize Rajoy’s handling of the crisis, his inability to offer the Catalans an appealing alternative, and his refusal to take the initiative in negotiations. Rajoy's Popular Party was instrumental in limiting the Catalans' autonomy in their new statute in 2006: The PP made a legal appeal to the Constitutional Court to strike down elements of the autonomy statute which, in its view, went too far.

Averting disaster

In private talks, members of Rajoy's Cabinet repeatedly evoke the example of the Basque Country, where nationalist parties backing the right of self-determination often gathered the support of more than half of the people and calls for independence were eventually defeated without the slightest compromise on the part of Madrid.

“Twenty-five years ago, we all thought that the situation in the Basque Country couldn’t be solved,” said a Cabinet member.

Yet this could be a dangerous example to draw lessons from. In the Basque Country, Spain was fighting a terrorist organization which killed more than 800 people during five decades of military struggle. The bloodshed undermined international support for the Basque cause and drove a majority of Spaniards — including Basques opposed to violence — to rally together against the group.

This isn’t the case in Catalonia, where most supporters of secession have advocated for their cause in a strictly peaceful manner. The Catalan government is focusing its efforts on seeking international support. So far Puigdemont has failed to win significant foreign backing for the independence cause but alarm bells are ringing in Madrid over the growing level of international media interest in Catalonia.

On Wednesday, Miquel Iceta, leader of the Catalan Socialists, asked Puigdemont to drop his plans for the referendum and demanded both Madrid and Barcelona “to stop an escalation that brings us all to disaster.”