Spanish Prime Minister Mariano Rajoy, derided as a liar by the opposition leader, rebuffed calls that he resign as he confronted corruption allegations in Parliament.
Rajoy denied any wrongdoing and said opposition leader Alfredo Perez Rubalcaba was jeopardizing Spain’s financial stability by slamming the government over reports the governing People’s Party operated a slush fund for senior officials.
“I made a mistake in continuing to trust someone who we now know didn’t merit that,” Rajoy told the Spanish parliament during an extraordinary debate in Madrid today. “I trusted him and I supported him. That has been the sum total of my role.”
Former party treasurer Luis Barcenas told the National Court last month that he helped manage a secret fund for 20 years. He named Rajoy among the officials who received payments and gave the court handwritten ledgers. The scandal has helped wipe out Rajoy’s lead in opinion polls and cast doubt over the government’s ability to see through its economic reform program.
“I won’t resign from the responsibility that a large majority of the Spanish people handed to me at the last election,” Rajoy told Rubalcaba. “The poverty of your arguments and the strength of my case is such that I haven’t even considered the possibility.”
Rajoy told Parliament that he declared all payments he received to the tax authorities.
Barcenas told the court he visited Rajoy’s office at the PP’s Madrid headquarters in March 2010 and gave the party chief 25,000 euros ($33,100) in cash, a transcript shows. Barcenas said he also gave the premier payments between 1997 and 1999.
“You lied,” Rubalcaba said today of the Spanish premier.
“You are politically corrupt,” said Catalan lawmaker Joan Coscubiela.
Rosa Diez, leader of the Union for Progress & Democracy, told Rajoy that his speech “was shameful.”
PP officials received bonus payments for accepting certain posts and were advanced money by the party to cover expenses, Rajoy said. He said all payments were included in the party’s official accounts supplied to the national audit office and that it was down to the individuals involved to ensure that extra payments were declared to the tax authorities.
The scandal has resonated as Spain, which won an international bailout of about 41 billion euros for its banks in June 2012, remains mired in recession and burdened with a jobless rate of more than 26 percent.
Rajoy is betting that a recovering economy will boost his popularity before an election due in 2015 while helping him to ride out the corruption storm. After 19 months of spending cuts, tax increases and public protests against changes to the country’s labor laws, Rajoy delivered his first reduction in unemployment in the second quarter.
“Employment and the economy in general are the most important issues,” Antonio Barroso, a London-based senior vice-president at Teneo Intelligence, said before the debate. “They will tend to overshadow any other issues in the political agenda.”
The extra yield investors demand to buy Spanish bonds instead of German bonds widened 2 basis points to 299 basis points at 2:35 p.m.in Madrid. That’s down from an average of 325 basis points in the last six months, signaling an improvement in investors’ risk assessment. The Spanish treasury sold 3.2 billion euros of three-and five-year bonds today, exceeding its maximum target as yields fell.
“Winning the confidence of the international community has cost us a lot,” Rajoy said. “It’s the fruit of the combined effort of Spanish society, of great sacrifices, and we can’t waste it through the irresponsible decisions of some politicians.”
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