Spain's opposition Socialists tell Rajoy to resign

MADRID Sun Feb 3, 2013 9:38am EST

1 of 18. A demonstrator who is dressed up for the carnival shouts slogans during a protest against political corruption at La Constitucion Square in Malaga, southern Spain, February 2, 2013. Spanish Prime Minister Mariano Rajoy on Saturday denied wrongdoing in a growing corruption scandal that threatens his credibility just as he makes headway against the economic crisis.

Credit: Reuters/Jon Nazca

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MADRID (Reuters) - Spain's opposition Socialist Party called for the resignation of Prime Minister Mariano Rajoy over a corruption scandal on Sunday as a poll showed the lowest support on record for his centre-right People's Party (PP).

Media reports over the past two weeks alleged at least a dozen senior PP officials, including Rajoy, received payments from a slush fund operated by its former treasurer.

Rajoy denies wrongdoing, but the scandal has provoked fury among Spaniards already disenchanted by deep recession and high unemployment, as support for the two biggest parties slumps.

"Rather than the solution for this country, Rajoy has become yet another problem," Socialist leader Alfredo Perez Rubalcaba, who served as deputy PM under the Socialist government which lost a landslide election in 2011, told a news conference.

An opinion poll published in the country's biggest-selling newspaper El Pais on Sunday showed neither of the two big parties could win a clear majority in an election.

The Metroscopia poll showed 23.9 percent support for the PP - the lowest on record and down from 29.8 percent in the same survey last month. The PSOE was little changed at 23.5 percent.

Spain has suffered five years of recession or economic stagnation and unemployment - already the highest in the European Union at 26 percent - continues to grow.

The United Left Party, on 15.3 percent in the poll, double its level of support at the last election in late 2011, has also urged Rajoy to resign. But the PP's parliamentary majority so far rules out any chance of a vote of no confidence.

The survey showed 77 percent disapproved of Rajoy as head of government, and 85 percent had little or no faith in him.

Eighty percent said PP leaders named by the media as alleged recipients of kickbacks should resign.

Almost all respondents - 96 percent - said corruption was widespread and not adequately punished, according to the survey which was carried out between January 30 and February 1 and interviewed 1,000 people across Spain.

(Reporting By Tracy Rucinski; Editing by Jason Webb)

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Comments (2)
dareconomics wrote:
The Socialists’ demand for PM Rajoy to resign will not amount to much. The Spanish Socialists were thrown out of office in 2011 for implementing austerity measures. Rajoy promised an end to austerity, won the election and promptly continued the austerity program.

This is the sad state of Spanish politics. Whichever of these large parties holds power, the result will be the same because the FANG countries are calling the shots in Europe.

Since the majority finds itself embroiled in a scandal, it is standard operating procedure for the minority to make a lot of noise and demand a resignation. Rajoy will not resign.

The situation has changed since I wrote this post, http://dareconomics.wordpress.com/2013/01/31/spanish-pm-embroiled-in-corruption-scandal/

On Thursday, the PP was claiming that the ledger at the center of the scandal was not valid. Today, the PP has subtly altered its argument claiming that the books in question have been doctored. At this point, everyone knows that Rajoy was accepting illegal cash payments, but this is a difficult case to prove.

As long as no one steps forward to testify that the books are real or that they witnessed Rajoy accepting the payments, he should be safe from prosecution. A large majority in Spain’s parliament ensures that he will not have to resign.

If bond yields were reflecting this information, I should think that they will settle down once speculators realize that Rajoy isn’t going anywhere. However, I do not believe that political instability is the cause of the rise in bond yields. Rather, it seems that Spanish banks have repaid their LTRO loans. With less money to invest, they are holder fewer bonds.

A similar dynamic could be occurring in Italy causing bond yields to rise. It does not matter who rules either of these countries as along as German money and the promise of more German money is keeping them afloat.

dareconomics.com

Feb 04, 2013 8:27pm EST  --  Report as abuse
dareconomics wrote:
The Socialists’ demand for PM Rajoy to resign will not amount to much. The Spanish Socialists were thrown out of office in 2011 for implementing austerity measures. Rajoy promised an end to austerity, won the election and promptly continued the austerity program.

This is the sad state of Spanish politics. Whichever of these large parties holds power, the result will be the same because the FANG countries are calling the shots in Europe.

Since the majority finds itself embroiled in a scandal, it is standard operating procedure for the minority to make a lot of noise and demand a resignation. Rajoy will not resign.

The situation has changed since I wrote this post, http://dareconomics.wordpress.com/2013/01/31/spanish-pm-embroiled-in-corruption-scandal/

On Thursday, the PP was claiming that the ledger at the center of the scandal was not valid. Today, the PP has subtly altered its argument claiming that the books in question have been doctored. At this point, everyone knows that Rajoy was accepting illegal cash payments, but this is a difficult case to prove.

As long as no one steps forward to testify that the books are real or that they witnessed Rajoy accepting the payments, he should be safe from prosecution. A large majority in Spain’s parliament ensures that he will not have to resign.

If bond yields were reflecting this information, I should think that they will settle down once speculators realize that Rajoy isn’t going anywhere. However, I do not believe that political instability is the cause of the rise in bond yields. Rather, it seems that Spanish banks have repaid their LTRO loans. With less money to invest, they are holder fewer bonds.

A similar dynamic could be occurring in Italy causing bond yields to rise. It does not matter who rules either of these countries as along as German money and the promise of more German money is keeping them afloat.

dareconomics.com

Feb 04, 2013 8:27pm EST  --  Report as abuse
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