Financial Times, Spain’s poisonous slush fund scandal


Mariano Rajoy, Spain’s prime minister, swept into office in November 2011 after his conservative Popular party won its biggest election victory of the post-Franco era. Few European politicians then boasted a more convincing mandate for the type of fiscal, economic and financial sector reforms required to rebuild his country’s prosperity and protect its eurozone membership. Twenty months later, however, the political capital generated by Mr Rajoy’s triumph is a fading memory, thanks to a festering party finance scandal from which he has culpably failed to draw the poison.

Week by week, month by month, the scandal is damaging Mr Rajoy, slowing his government’s reform efforts, undermining Spanish democracy and corroding Spain’s international image. It is true that the premier is under little pressure to resign, in the sense that no irrefutable evidence has emerged to disprove his contention that he has never received illegal cash payments from a slush fund operated by Luis Bárcenas, a former PP treasurer. Mr Rajoy’s party commands a comfortable parliamentary majority and remains, for the most part, loyal to him. Meanwhile, the opposition Socialists sense they are too unpopular to profit from an early election.

But for Spain’s sake Mr Rajoy’s premiership needs to be about far more than personal political survival and belated denials of wrongdoing. His refusal to appreciate that the ever-widening scandal demands a full explanation of the PP’s financing practices, past and present, is eroding public confidence in his leadership. It is also draining respect for the political party system established after Franco’s death in 1975. Spaniards justifiably regard it as unacceptable that their rulers should raise taxes, reduce public spending and let unemployment rise to catastrophic levels, while scorning the need to come clean about their parties’ receipt and use of huge sums of money.

Regional tensions are most acute in Catalonia, where separatism is strong, but the central government in Madrid faces resistance to its fiscal and economic reforms in other regions such as the Basque country and the Canary islands. The slush fund revelations are weakening Mr Rajoy’s legitimacy at precisely the moment when he most needs it. For without public trust and support, the reforms required to strengthen Spain’s economy and stabilise the eurozone will be paralysed.

Read @ Financial Times

Leave a Reply

Your email address will not be published.

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>