Al Jazeera's Laurence Lee, reporting from Madrid, said on Tuesday that there was little appetite among Spanish officials to engage with the Catalans and cited reports in Spanish newspapers that said the government considered Puigdemont's speech a declaration of independence.
So he chose the compromise.
Catalan president Carles Puigdemont hasn't revealed the precise message he will deliver Tuesday evening with separatist politicians expecting some sort of declaration based on the results of the disputed October 1 referendum on independence. It is a symbolic statement because it has not been ratified by the Parliament. And it's not liked the person.
Pro-independence demonstrators were gathering before the parliament building under the slogan "Hello Republic" to mark Mr Puigdemont's speech at 6pm (11pm last night, Phnom Penh time).
The European Commission calls on Madrid and the separatists to hold a dialogue, while the United Nations urges Spain to investigate the violence.
For her part, Soraya Saenz de Santamaria, Spain's deputy prime minister, said Spanish leaders were considering "all possible options" and described the Catalan leader's push for independence as "fanaticism". 90 % of the electorate voted in favour of independence but participation has reached only 43 %.
The text of the communiqué said that Merkel and Rajoy exchanged impressions on the paths to take achieve domestic dialogue in the frame of the Constitution.
She added: "After having come so far, and taken Catalonia to the greatest level of tension in its history, President Puigdemont has now subjected his autonomous region to its greatest level of uncertainty".
Catala said that the Madrid government does not recognize "neither the law, suspended by the constitutional court, nor the referendum and the declaration of independence". "In essence we're happy but I was expecting more", said 66-year-old Pere Valldeneu.
The Spanish government had threatened tough action, possibly including imposing direct rule on Catalonia from Madrid, if he had gone ahead with breakaway moves.
Investors, depositors and citizens in Spain are on tenterhooks as Catalonia's regional leaders weigh up how to press an independence drive that could push the region out of the European Union.
Both Spanish Prime Minister Mariano Rajoy's government and European Council President Donald Tusk had urged Puigdemont not to proclaim independence.
Speaking soon after, Catalan government spokesman Jordi Turull retorted that the regional executive was "completely united", without giving any hint of what Puigdemont may tell Catalan lawmakers in an extraordinary parliamentary session beginning at 1600 GMT.
But secessionist leaders said the referendum had produced an overwhelming majority for breaking away from Spain and their leader was delivering a speech on Tuesday evening in which he could ask the regional parliament to vote on independence.
Then, if this warning wasn't heeded, the Spanish Government can seize control of the region.
Throughout the day, the Catalan government had remained tight-lipped.
If Catalonia wins its independence, business leaders worry that the new state will have no formal trade agreements with other countries, creating a situation even more serious than Brexit, said Carsten Hesse, a European economist at Berenberg Bank.
While it has for now maintained its support for the regional government, it said it had set a one-month deadline for talks.