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

Report: $60 Billion Leaves Africa Illegally Each Year

Report by joint UN and African Union panel says African countries need to take concrete measures to stop illegal money flow from continent each year More

Video Spy Murder Probe Likely to Further Strain British-Russian Relations

Some analysts say Russian Tu-95 bombers were flying near British airspace to warn Britain about an inquest into a murdered Russian spy More

Mugabe Defends Image Amid Controversy at Close of AU Summit

He rejects concerns about how the West might perceive his leadership, saying he's focused on African development More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Spy Murder Probe Likely to Further Strain British-Russian Relationsi
X
Henry Ridgwell
January 31, 2015 10:50 PM
Relations between Russia and the West are set to become even more strained amid an inquiry in London into the murder of a former Russian spy. Lawyers at the inquiry accuse Russian President Vladimir Putin of directing a "mafia state." Meanwhile, Royal Air Force fighters intercepted Russian bombers close to British airspace this week, prompting authorities to summon Moscow’s ambassador. Henry Ridgwell reports.
Video

Video Spy Murder Probe Likely to Further Strain British-Russian Relations

Relations between Russia and the West are set to become even more strained amid an inquiry in London into the murder of a former Russian spy. Lawyers at the inquiry accuse Russian President Vladimir Putin of directing a "mafia state." Meanwhile, Royal Air Force fighters intercepted Russian bombers close to British airspace this week, prompting authorities to summon Moscow’s ambassador. Henry Ridgwell reports.
Video

Video Ukrainian Neighborhood Divided Over Conflict

People in eastern Ukraine’s Donetsk and Luhansk districts find themselves squarely in the path of advancing Russian-backed rebels, who want to take back the territory they held at the beginning of the conflict last year. Many local residents are afraid, but others would welcome the change, even when a rebel shell lands in their neighborhood. From the Luhansk district, 15 kilometers from where the Ukrainian government marks the front line, VOA’s Al Pessin reports.
Video

Video Threat of Creeping Lava Has Hawaiians on Edge

Residents of the small town of Pahoa on the Big Island of Hawaii face an advancing threat from the Kilauea volcano. Local residents are keeping a watchful eye on creeping lava. Mike O’Sullivan reports.
Video

Video Jefferson's Library Continues to Impress, 200 Years Later

Two hundred years after the U.S. Congress purchased a huge collection of books belonging to former President Thomas Jefferson, it remains one of America’s greatest literal treasures and has become the centerpiece of Washington’s Library of Congress. VOA’s Deborah Block reports.
Video

Video Egypt's Suez Canal Dreams Tempered by Continued Unrest

Egypt plans to expand the Suez Canal, raising hopes that the end of its economic crisis may be in sight. But some analysts say they expect the project may cost too much and take too long to make life better for everyday Egyptians. VOA's Heather Murdock reports.
Video

Video Pro-Kremlin Youth Group Creatively Promotes 'Patriotic' Propaganda

As Russia's President Vladimir Putin faces international pressure over Ukraine and a failing economy, unofficial domestic groups are rallying to his support. One such youth organization, CET, or Network, uses creative multimedia to appeal to Russia's urban youth with patriotic propaganda. VOA's Daniel Schearf reports.
Video

Video Filmmakers Produce Hand-Painted Documentary on Van Gogh

The troubled life of the famous 19th century Dutch painter Vincent van Gogh has been told through many books and films, but never in the way a group of filmmakers now intends to do. "Loving Vincent " will be the first ever feature-length film made of animated hand-painted images, done in the style of the late artist. VOA’s George Putic reports.
Video

Video Issues or Ethnicity? Question Divides Nigeria

As Nigeria goes to the polls next month, many expect the two top presidential contenders to gain much of their support from constituencies organized along ethnic or religious lines. But are faith and regional blocs really what political power in Nigeria is about? Chris Stein reports.
Video

Video Rock-Consuming Organisms Alter Views of Life Processes

Scientists thought they knew much about how life works, until a discovery more than two decades ago challenged conventional beliefs. Scientists found that there are organisms that breathe rocks. And it is only recently that the scientific community is accepting that there are organisms that could get energy out of rocks. Correspondent Elizabeth Lee reports.
Video

Video Paris Attacks Highlight Global Weapons Black Market

As law enforcement officials piece together how the Paris and Belgian terror cells carried out their recent attacks, questions are being asked about how they obtained military grade assault weapons - which are illegal in the European Union. As VOA's Jeff Swicord reports, experts say there is a very active worldwide black market for these weapons, and criminals and terrorists are buying.
Video

Video Activists Accuse China of Targeting Religious Freedom

The U.S.-based Chinese religious rights group ChinaAid says 2014 was the worst year for religious freedom in China since the end of the Cultural Revolution. As Ye Fan reports, activists say Beijing has been tightening religious controls ever since Chinese leader Xi Jinping came to office. Hu Wei narrates.
Video

Video Theologians Cast Doubt on Morality of Drone Strikes

In 2006, stirred by photos of U.S. soldiers mistreating Iraqi prisoners, a group of American faith leaders and academics launched the National Religious Campaign Against Torture. It played an important role in getting Congress to investigate, and the president to ban, torture. VOA's Jerome Socolovsky reports.

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More

All About America

AppleAndroid