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Catalonia declared independence from Spain on Friday after organising a contested independence referendum.
Spain sacked the entire Catalan government after the autonomous region declared independence last Friday.
'I'm quite sure that if Puigdemont takes part in these elections, he can exercise this democratic opposition,' said a government spokesperson.
Puigdemont said the national government's actions are 'contrary to the expressed will of the citizens of our country' in a TV address on Saturday.
Catalonia's regional parliament voted for independence on Friday, sparking a constitutional crisis in Spain.
Spain's Deputy Prime Minister Soraya Saenz de Santamaria has been put in charge of the Catalan region amid a constitutional standoff.
The vote led to a big fall in Spain's benchmark IBEX 35 share index, which dropped to a loss of more than 2% on the day shortly after the vote, hitting a low of around 10,130 points.
Spain's Prime Minister Mariano Rajoy plans to strip Catalonia's autonomy and to call for elections as the battle over the region's independence push continues.
The country plans to invoke Article 155, which would suspend Catalonia's political autonomy.
Catalonia symbolically declared independence — but is pretty vague about what that means.