King Juan Carlos falls from grace in scandal-weary Spain

Thu Apr 18, 2013 3:52am EDT

(Repeats without change story issued on April 17)

* Spain's royals were hugely admired

* Scandals take their toll

* Growing number of Spaniards want king to abdicate

By Elisabeth O'Leary

MADRID, April 17 (Reuters) - Spain's King Juan Carlos stood with a throng of smiling journalists and onlookers, exchanging pleasantries, laughing at jokes and even trying on a pair of sunglasses proffered by a reporter from a comedy show.

That was a typical public appearance back in 1997 when he was one of the world's most popular monarchs, the media treated him kindly and the idea of abdication would have seemed absurd.

Now almost half of Spaniards think he should step down in favour of his son, Prince Felipe, 45, and over a third, mostly young people, want their country to become a republic.

The 75-year-old king has had a spectacular fall from grace as scandals undermine public approval and his health weakens.

Liked and respected, Juan Carlos even won the admiration of republicans for his role in Spain's peaceful transition to democracy in the 1970s after four decades of dictatorship, and put paid to a military coup attempt in 1981.

Now, public opinion has been soured by criminal charges against Juan Carlos' daughter and her husband in an embezzlement case, an unexplained Swiss bank account and a flamboyant lifestyle -- including a big-game hunting trip to Africa -- that jarred with the economic crisis engulfing the nation.

A line was crossed earlier this year with the publication of media interviews with a businesswoman friend of the king who says she has carried out consultancy work for the government.

Chat shows and social media referred to Corinna zu Sayn-Wittgenstein as the king's mistress, prompting huge public sympathy for Queen Sofia, married to a man who the queen's official biographer described as liking all women except the one he chose as a wife.

DISDAIN

For its part, the royal household keeps silent in the face of such talk. But as ordinary Spaniards struggle with debts, unemployment and widespread corruption in politics, the king's activities now provoke disdain after years of deference.

"Public opinion has nothing to hold on to. People are a little unhinged, overwhelmed by what is happening in Spain," says Bieito Rubido, editor of monarchist newspaper ABC.

Like most royal observers, he does not believe the future of the monarchy is at stake.

But questions about the future of the crown have added to a general loss of faith in public institutions, bogged down with corruption cases after a housing bubble burst five years ago, plunging Spain into crisis.

"People are extremely frustrated with the economic situation and want someone to blame, so it's a situation where anything could happen," said Jonathan Hopkin, a politics expert at the London School of Economics.

Sources familiar with palace thinking say the royal family is concerned about the decline in its popularity and is eager to avoid adding more uncertainty to the climate of crisis for ordinary Spaniards. The palace is monitoring public opinion extremely closely via social media and its own polls.

Abolishing the monarchy altogether is not something the political class is contemplating, and two leftist deputies who have called for the king to retire were immediately slapped down by other lawmakers.

If abdication is being contemplated, no one is admitting it. But the danger is that the longer the issue is left, the more damaged the institution inherited by Prince Felipe. The problem is that Juan Carlos would be leaving in disgrace which he is not likely to do, royal experts believe.

HOPES REST ON FELIPE

He does have an example, however, elsewhere in Europe. Queen Beatrix of the Netherlands has announced that she will step down this month at the age of 75 in favour of a 45-year-old son.

Prince Felipe is well-liked, polls show, but the monarchy as a whole has suffered.

In a 1997 poll, the monarchy rated 6.67 out of 10, the highest of any institution in Spain. In 2011 that had dropped to 4.97.

Although talk of the king's poor health after four surgeries in the last year persists, he does not want to hand over.

"He does not want to abdicate under any circumstance, and succession can't take place against his will," says ABC's Rubido.

Prince Felipe is discreet but friendly and well-versed in current affairs. His wife, commoner Letizia Ortiz, is a former journalist and is also popular.

Felipe is reported to be furious with his father and his brother-in-law over the embezzlement scandal. But it seems the king will try to sit out the storm in the hope that it will eventually die down and he can recover some of his popularity.

ROYAL FINANCES

Days after a magistrate charged Princess Cristina, the palace announced that it would be included in a new transparency law which could potentially shed light on royal finances, including government payments on top of the annual 8 million euros annual stipend.

But Arsenio Escolar, editor of the mass-circulation newspaper 20 Minutos, says too little is being offered too late.

"Public indignation is growing, people can't take any more (corruption)," he says. "Protests will return and the street could be full again within a month."

Despite this, Spaniards over 50 fear that abdication could stir up echoes of the 1936-1939 Civil War.

After dictator Francisco Franco died in 1975, Juan Carlos worked to ensure that Spain became a democracy, convincing all sides to bury the hatchet.

Older Spaniards feel immense gratitude to Juan Carlos for stopping the attempted coup of 1981, the fledgling days of the democracy, when a colonel burst into parliament firing a gun in the air and holding deputies hostage overnight.

Juan Carlos, head of the armed forces, made a live televised address in his military uniform, ordering support for the democratically elected government.

The king's image started to deteriorate with the investigation into his son-in-law's alleged embezzlement at the head of the not-for-profit Noos Foundation in 2011.

It plummeted in 2012 when it emerged that Juan Carlos had gone on an elephant-hunting trip to Africa just as the full force of Spain's economic crisis hit home.

With one in four Spaniards living in poverty, the palace was exposed as hopelessly out of touch. The king made an unprecedented apology.

Since then things have worsened, culminating with the charging of Princess Cristina in the Noos case this month.

Spaniards do not expect real justice to be done, as one man drinking coffee in a bar observed.

"There's more chance that those of us here go to jail (than Princess Cristina) even though we haven't done anything," said Javier Martin, 33, who works in marketing. (Editing by Giles Elgood)

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