Spanish Official Resigns in Wake of New Scandal

February 15, 2016Spainby EW News Desk Team

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Popular Party (PP) Madrid chapter president Esperanza Aguirre resigned amid allegations of questionable funding sources, according to the Associated Press. She has been a long-time member of the party did not have a direct implication, but is taking full responsibility. The scandal is the latest in a string of charges against the PP, a center-right party that has faced considerable heat from critics over stagnant economic growth. Prime Minister Mariano Rajoy currently resides over a transition government as he attempts to form a new parliament.

Rajoy and his party lost majority status in parliament during the December elections. Part of this is the systemic corruption, which has painted the PP as an untrustworthy political entity. The PP faced another scandal last month as 24 people were arrested in connection with public contracts and sketchy commission payments. 

Hundreds of public servants throughout the southern-European nation remain under investigation. This type of corruption is not relegated to the PP, as King Felipe VI’s sister, Princess Cristina, is linked to fraudulent business deals and faces prison time if convicted of tax fraud. Her husband faces up to 20 years in prison on money laundering and embezzlement charges.  

Political Wrangling

Such scandals render it harder for Rajoy to form a coalition from a parliament comprised of various factions. Spain will conduct another election if the prime minister cannot get parliamentary members to work together, notes Reuters.

The political landscape within parliament includes Podemos (far-left anti-austerity party), the Socialists (the primary opposition to the PP) and Ciudadanos (a business-friendly party based in Catalonia). The prime minister is at a disadvantage when it comes to putting together such a diverse group of people, but experts note that an alliance between Podemos and the Socialists could play a vital role in forming a new parliament.

Economic Status

Political disarray aside, Spain is in a better place compared to previous years. Overall, the economy grew 3.2 percent in 2015, the strongest showing in over five years, and some analysts expect 2016 to yield stable growth. Further, lower gas prices are strengthening purchasing power, with a sudden dip in unemployment boosting consumer spending.

However, several problems remain that could potentially hamper growth. Even though unemployement is at its lowest level in over four years during Q4, joblessness remains at an exceedingly high rate of around 20 percent, and many Spaniards are unable to find long-term employment in an economy where part-time work is the norm for many people. The primary problem is a lack of cohesive government, and the business community is concerned that foreign investors will take their money elsewhere if officials fail to reach a consensus.

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