News / Europe

Corruption Accusations in Spain May Hamper Economic Recovery

Former Popular Party's treasurer, Luis Barcenas, arrives at the anti-corruption prosecuting office in Madrid, Feb. 6, 2013.
Former Popular Party's treasurer, Luis Barcenas, arrives at the anti-corruption prosecuting office in Madrid, Feb. 6, 2013.
Caroline Arbour
— In Spain, new details keep emerging in a corruption scandal that reaches to the top ranks of the ruling party.  Some analysts believe the Bárcenas affair and the numerous other cases of political dishonesty coming to light could spell trouble for the country's economic recovery.  There was some evidence last week recent revelations were shaking investor confidence when Spain's debt costs rose after months of relative stability.  Any setback for Spain could send shockwaves throughout the eurozone.  
 
When Spanish newspaper El País published handwritten ledgers two weeks ago indicating the ruling Partido Popular operated a secret slush fund for years benefitting top party officials like Prime Minister Mariano Rajoy, the party fought back, questioning their authenticity.

This week El País reported that handwriting experts confirmed the documents were genuine and there was no indication of tampering.

Plus, there were revelations that the party continued until December to make severance payments to the man at the center of the scandal, the party’s former treasurer.

And this, even though Luis Bárcenas has been under investigation since 2009.

It is just the latest in a string of allegations of corruption that have been making news headlines in Spain in recent months, making austerity measures a tougher pill to swallow for Spaniards.

Jesús Lizcano, president of Transparency International Spain and an economics professor at the Autonomous University of Madrid, says the corruption scandals are certainly affecting Spain´s image and are not helpful in attracting foreign capital.

But Lizcano believes their overall impact on investor confidence will be limited.

He notes that in the Transparency International latest corruption perception index, Spain ranked 30th out of 176 countries.

Not bad, he says, even though there is room for improvement.

Some market analysts are predicting rough times ahead, however.

News of the Bárcenas affair caused Spain´s debt costs to increase slightly last week.

Bond prices are still low, but Joe Rundle, head of trading at ETX Capital in London, says they may rise to critical levels.

He says the eurozone crisis is not over and investors may pressure the European Central Bank to definitively act to put an end to it with its bailout plan.

“I think any risk, political risk, or further deterioration in economics, will cause the market to have a push of these yields up to six percent to see whether there is appetite for Draghi and the ECB to actually activate the program," said Rundle.

Rundle says a bailout would have “massive” consequences.

“France isn´t really in a position to do the bailout and it´s going to come down to Germany to decide how the eurozone is going to be shaped in the coming years," he said.

A bailout may be what the markets wish for, but it´s not something either Spain or Germany want and the tone at the meeting between Spanish Prime Minister Rajoy and German Chancellor Angela Markel last week was positive.

Meanwhile, Spain is working on polishing its credibility.  

The government introduced a transparency bill last fall.

And this week Prime Minister Rajoy stated the law would not only apply to public institutions, but also to political parties.  

Critics have argued the bill is hard to be enforced, but that with some amendments, it is a good start.

You May Like

Mali's Female Basketball Players Rebound After Islamist Occupation

Islamist extremists ruled northern Mali for most of 2012, imposing strict Sharia law, and now some 18 months later, the region is slowly getting back on its feet More

Video Vietnamese Staging Chinese Product Boycott After Oil Rig Spat

Many Chinese-made products go unsold, for now, with numerous Vietnamese consumers still angry over recent dispute More

Koreas Mark 61st Anniversary of War Armistice

Muted observances on both sides of heavily-armed Demilitarized Zone that separates two decades-long enemies More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Students in Business for Themselvesi
X
Mike O'Sullivan
July 26, 2014 11:04 AM
They're only high school students, but they are making accessories for shoes, fabricating backpacks and doing product photography - all through their own businesses. It's the result of a partnership between a non-profit organization that teaches entrepreneurship and their schools. VOA's Mike O'Sullivan and Deyane Moses met the budding entrepreneurs near Los Angeles.
Video

Video Students in Business for Themselves

They're only high school students, but they are making accessories for shoes, fabricating backpacks and doing product photography - all through their own businesses. It's the result of a partnership between a non-profit organization that teaches entrepreneurship and their schools. VOA's Mike O'Sullivan and Deyane Moses met the budding entrepreneurs near Los Angeles.
Video

Video Astronauts Train in Underwater Lab

In the world’s only underwater laboratory, four U.S. astronauts train for a planned visit to an asteroid. The lab - called Aquarius- is located five kilometers off Key Largo, in southern Florida. Living in close quarters and making excursions only into the surrounding ocean, they try to simulate the daily routine of a crew that will someday travel to collect samples of a rock orbiting far away from earth. VOA’s George Putic has more.
Video

Video Not Even Monks Spared From Thailand’s Junta-Backed Morality Push

With Thailand’s military government firmly in control after May’s bloodless coup, authorities are carrying out plans they say are aimed at restoring discipline, morality and patriotism to all Thais. The measures include a crackdown on illegal gambling, education reforms to promote students’ moral development, and a new 24-hour phone hotline for citizens to report misbehaving monks. Steve Sandford reports from Bangkok.
Video

Video Virtual Program Teaches Farming Skills

In a fast-changing world beset by unpredictable climate conditions, farmers cannot afford to ignore new technology. Researchers in Australia are developing an online virtual world program to share information about climate change and more sustainable farming techniques for sugar cane growers. As VOA's Zlatica Hoke reports, the idea is to create a wider support network for farmers.
Video

Video Airline Expert: Missile will Show Signature on Debris

The debris field from Malaysia Airlines Flight 17 is spread over a 21-kilometer radius in eastern Ukraine. It is expected to take investigators months to sort through the airplane pieces to learn about the missile that brought down the jetliner and who fired it. VOAs Carolyn Presutti explains how this work will be done.
Video

Video Treatment for Childhood Epilepsy Heats up Medical Marijuana Debate

In the United States, marijuana is classed as an illegal drug by the federal government. But nearly half the states have legalized it, to some degree. Proponents say some strains of marijuana might have exceptional health benefits, for treating pain or inflammation in chronic conditions such as cancer, multiple sclerosis and epilepsy. Shelley Schlender reports on a strain of medical marijuana developed in Colorado that is reputed to reduce seizures in childhood epilepsy
Video

Video Airbus Adds Metal 3D Printed Parts to New Jets

By the end of this year, European aircraft manufacturing consortium Airbus plans to deliver the first of its new, extra-wide-body passenger jets, the A350-XWB. Among other technological innovations, the new plane will also incorporate metal parts made in a 3-D printer. VOA's George Putic has more.
Video

Video AIDS Conference Welcomes Exciting Developments in HIV Treatment, Prevention

Significant strides have been made in recent years toward the treatment and prevention of HIV, the virus that causes AIDS. This year, at the International AIDS Conference, the AIDS community welcomed progress on a new pill that may prevent transmission of the deadly virus. VOA’s Anita Powell reports from Melbourne, Australia.
Video

Video IAEA: Iran Turns its Enriched Uranium Into Less Harmful Form

Iran has converted its stockpiles of enriched uranium into a less dangerous form that is more difficult to use for nuclear weapons, according to the United Nations’ Atomic Energy Agency. The move complies with an interim deal reached with Western powers on Iran's nuclear program last year, in exchange for easing of sanctions. Henry Ridgwell reports for VOA from London.

AppleAndroid