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The reaction by PP leaders attacking the Schengen Agreement after a German court yesterday refused to extradite the Catalan president in exile, Carles Puigdemont, for rebellion, only accepting to do so for the charge of misuse of public funds, has started to set off alarms in Europe.

Today's briefing from the think tank Eurointelligence analyses the reaction the party has had to the decision by the higher regional court of Schleswig-Holstein and asks whether "Spain's PP [can] turn eurosceptic over Catalonia", specifically this case.

The think tank does not appear sympathetic to the responses from the PP or the Spanish judiciary. "The Schleswig-Holstein question in the 19th century [about the constitutional status of the two duchies and whether they were German or Danish] drove the few people that understood it to madness. The same is now happening with the decision by a Schleswig-Holstein court not to extradite Carles Puigdemont on charges of rebellion. It threatens to drive the PP and the Spanish judiciary to insanity," they write. The think tank notes that judge Pablo Llarena is now considering revoking the European Arrest Warrant against Puigdemont and that PP's leader in the European Parliament, Esteban González Pons, called on the Spanish government to suspend the Schengen Agreement in retaliation.

"Is this a knee-jerk reaction or a sign of a PP policy shift?" they ask. They go on to compare two of the candidates in the current PP leadership contest Pablo Casado, "the younger candidate... who is running a hard ideological campaign", and Soraya Sáenz de Santamaría, "Mariano Rajoy's deputy PM and the more technocratic candidate". Casado, they report, yesterday called for Schengen to be scrapped "given that there are no guarantees that Spain will be respected" and said that "as PP president he would not tolerate Spain being humiliated in this manner". Santamaría, meanwhile, "stressed respect for judicial independence instead". "So the PP faces a party congress the following weekend, and will resolve its leadership contest, divided on its reaction to the German court ruling," they conclude.

The think tank predicts that Casado is likely to win that leadership contest with two thirds of delegates.