This afternoon, Catalonia declared independence. At the same time, Spain invoked article 155, to strip Catalonia from its governing powers putting it under direct rule from the federal government.
A vote for independence was raised in Catalonian parliament, with part of parliament leaving before the vote on independence started. The motion declaring independence was approved with 70 in favor, 10 against, and two abstentions of the normal 135 total.
From RT: https://www.rt.com/news/407956-catalan-parliament-votes-independence/ [rt.com]
From Aljazeera: http://www.aljazeera.com/news/2017/10/catalan-parliament-begins-vote-independence-171027115908493.html [aljazeera.com]
From BBC: http://www.bbc.com/news/world-europe-41780116 [bbc.com]
It will be interesting to see how things unfold.
In my opinion, Madrid using violence to stop a referendum gave it the legality they later claim the referendum didn't have. The lack of dialogue paved the way into the only possible outcome, Catalonia declaring independence and Madrid denying it. Whatever happens next, I hope will be peaceful.
As to how the EU reacts, I'm hoping they ask for a official referendum, and whatever the outcome, pledges that both Catalonia and Spain will be able to remain in the EU if they desire. That may release tensions a bit.