Spain's crisis could not have come at a worse moment - for her and for Europe

If our Prime Minister thinks he's having a hard time, he should put himself in the position of his Spanish counterpart. That country's misery affects us all

Related Topics

This last fortnight has not only been the worst in David Cameron's short premiership, but surely in his political life so far, and quite probably in the last forty years of British government.

A large portion of his Cabinet, not to mention that of the last Tory administration, stands accused of receiving money-stuffed envelopes from big business donors, and the worst thing is that the records point to him as one of the recipients.

He has denied everything, but the denials are flimsy and few media commentators - even those normally supporting his own side - seem to believe them. In other words, while demanding harsh austerity from his electorate, government politicians are giving the impression of lining their own pockets.

No joy for Rajoy

Of course, none of this is true. But it describes, pretty much, the disasters which have suddenly beset Mariano Rajoy, the unfortunate prime minister of Spain and leader of the conservative PP (People's Party), during the month of February.

And it is all because photocopies alleged to be from the handwritten ledger of his party treasurer, Luis Barcenas, have fallen into the hands of El Pais, the main quality newspaper. They imply cash payments made over many years to key figures in the party, including Rajoy and former Prime Minister Jose Maria Aznar. In Rajoy's case, the records indicate he was being paid so well as an opposition leader that he had to take a pay cut to become prime minister.

Rajoy has never been a particularly well-loved political figure - he lost one election, after which he hung on as leader. He finally reached the Moncloa palace almost by default, mainly owing to the “Crisis? What crisis?” economic incompetence displayed by his predecessor, Zapatero.

But, while they may be unloved or incompetent, you do not expect national leaders to lie. And so, the fact that large sections of the Spanish population appears to have dismissed the explanations of their own prime minister as something close to laughable, is clearly a problem.

Now, it's not as if Spain has been free from corruption historically - its regional and local governments have been rife with scandal for years, as exemplified by the recent, extraordinary case of Francisco Camps, President of Valencia region, who was last year narrowly acquitted to the great surprise of many commentators, amid accusations of jury-fixing which were by no means far-fetched.

But both cases exemplify the chickens now coming home to roost from a combination of effects: a judiciary which has become over-politicised and delivered highly questionable decisions; an unhealthy, “revolving door” political class which happily perpetuates itself in all parties; and finally, worst of all, a culture of tolerance towards corruption which dates back to the Franco era and before.

A lose-lose situation

It is this last which pretty much guaranteed that corruption would, as it invariably does, slowly and cancerously increase in scale until something like this happened. That said, when you put it against the extraordinary progress that Spain has made since its liberation from fascism less than forty years ago, we also need perhaps to make some allowances.

Whatever our judgement, it is the effects of the resultant disillusionment in the political class which triggered the birth of the now-famous “Indignados” grassroots movement in Spain, which helped in turn inspire the more global anti-politics reaction of Occupy.

And Spain is in a lose-lose situation: if there is a change of government, one somewhat less bent on balancing the books will almost certainly take charge, hurting its economic credibility. If Rajoy stays, he will be a lame-duck president in a tarnished democracy, hurting its political credibility.

But why should we in Britain care about this story? Isn't it just another foreign government which isn't quite as clean as ours? Plenty of those, aren't there?

Well, not quite. Firstly, it's genuinely shocking: this is not some developing world pseudo-democracy, but a key neighbour of Britain within the European Union and the world's fourteenth-largest economy (before the financial crisis, it was its ninth-largest). Yes, Italy has had scandals like this before; but we really thought better of Spain. In Britain it would be unthinkable.

But far, far more importantly, Spain is the member of the EU which has most been in the eye of the euro storm over the last year or so. Just about holding things together through a savage austerity program and 26% unemployment, Spain represents Britain's current stagnation troubles writ large.

But unlike Britain, it cannot devalue its currency to help ease the pain: it is stuck in the euro. While many disagree, there are some who contemplate a Greek exit as a possible solution to the euro's woes. But no-one - at least, no-one likely to have any say in the matter - seems to be saying the same about Spain; everyone senses it is simply “too big to fail”.

And we haven't even got on to the potential for austerity-fuelled political unrest on a Greek scale. Or the fact that its principal economic engine, Catalonia, is threatening to secede. Ouch.

A European tragedy

In short, Spain's political crisis could not have arrived at a worse moment, not just for it, but for the whole of Europe. If you are in the midst of holding the country together with an emergency plan, the absolutely last thing you need is for the government to be paralysed, rather than calmly managing its way out of a crisis.

Not to mention the question of trust: the BBC quotes Spanish political scientist Ferrán Requejo, telling news agency AFP that Rajoy's credibility is now fatally undermined as the key figure in the euro negotiations:

“An accusation of corruption in a governing party is a serious accusation...He is not going to be listened to the slightest bit by the European institutions.”

Perhaps significantly, some of the best analysis on the situation done so far has been carried out by the Financial Times, because there is the potential for economic impact on such a wide scale. It quotes analysis by bank Nomura:

“Should snap elections materialise in the coming months...polls suggest the outcome could deliver a very weak government that would lack the strength and the reform commitment...that overall helped win Europe and the ECB's support.”

In short, red warning lights are flashing all over the place. In the UK domestic press, it has so far been fairly quiet, but it is still conceivable that this terribly-timed political crisis could be the event that pushes Spain, and the euro, over the edge. Should that happen, the shock waves of the PP's “envelopes” saga might end up being felt as much in Berlin, Paris, London and even Washington and Beijing, as in Madrid.

React Now

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Recruitment Genius: Sales Executives - OTE £60,000

£25000 - £60000 per annum: Recruitment Genius: Are you passionate about Custom...

Recruitment Genius: Care Workers Required - The London Borough of Bromley

£15000 per annum: Recruitment Genius: This homecare agency is based in Beckenh...

Recruitment Genius: Sales Executives - OTE £50,000

£25000 - £50000 per annum: Recruitment Genius: Are you passionate about Custom...

Recruitment Genius: Sales Executives - OTE £50,000

£25000 - £50000 per annum: Recruitment Genius: Are you passionate about Custom...

Day In a Page

Read Next
Polish minister Rafal Trazaskowski (second from right)  

Poland is open to dialogue but EU benefits restrictions are illegal and unfair

Rafal Trzaskowski
The report will embarrass the Home Secretary, Theresa May  

Surprise, surprise: tens of thousands of illegal immigrants have 'dropped off' the Home Office’s radar

Nigel Farage
Could cannabis oil reverse the effects of cancer?

Could cannabis oil reverse effects of cancer?

As a film following six patients receiving the controversial treatment is released, Kate Hilpern uncovers a very slippery issue
The Interview movie review: You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here

The Interview movie review

You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here
Serial mania has propelled podcasts into the cultural mainstream

How podcasts became mainstream

People have consumed gripping armchair investigation Serial with a relish typically reserved for box-set binges
Rosetta space mission voted most important scientific breakthrough of 2014

A memorable year for science – if not for mice

The most important scientific breakthroughs of 2014
5 best activity trackers

Fitness technology: 5 best activity trackers

Up the ante in your regimen and change the habits of a lifetime with this wearable tech
Jeb Bush vs Hillary Clinton: The power dynamics of the two first families

Jeb Bush vs Hillary Clinton

Karen Tumulty explores the power dynamics of the two first families
Stockholm is rivalling Silicon Valley with a hotbed of technology start-ups

Stockholm is rivalling Silicon Valley

The Swedish capital is home to two of the most popular video games in the world, as well as thousands of technology start-ups worth hundreds of millions of pounds – and it's all happened since 2009
Did Japanese workers really get their symbols mixed up and display Santa on a crucifix?

Crucified Santa: Urban myth refuses to die

The story goes that Japanese store workers created a life-size effigy of a smiling "Father Kurisumasu" attached to a facsimile of Our Lord's final instrument of torture
Jennifer Saunders and Kate Moss join David Walliams on set for TV adaptation of The Boy in the Dress

The Boy in the Dress: On set with the stars

Walliams' story about a boy who goes to school in a dress will be shown this Christmas
La Famille Bélier is being touted as this year's Amelie - so why are many in the deaf community outraged by it?

Deaf community outraged by La Famille Bélier

The new film tells the story of a deaf-mute farming family and is being touted as this year's Amelie
10 best high-end laptops

10 best high-end laptops

From lightweight and zippy devices to gaming beasts, we test the latest in top-spec portable computers
Michael Carberry: ‘After such a tough time, I’m not sure I will stay in the game’

Michael Carberry: ‘After such a tough time, I’m not sure I will stay in the game’

The batsman has grown disillusioned after England’s Ashes debacle and allegations linking him to the Pietersen affair
Susie Wolff: A driving force in battle for equality behind the wheel

Susie Wolff: A driving force in battle for equality behind the wheel

The Williams driver has had plenty of doubters, but hopes she will be judged by her ability in the cockpit
Adam Gemili interview: 'No abs Adam' plans to muscle in on Usain Bolt's turf

'No abs Adam' plans to muscle in on Usain Bolt's turf

After a year touched by tragedy, Adam Gemili wants to become the sixth Briton to run a sub-10sec 100m
Calls for a military mental health 'quality mark'

Homeless Veterans campaign

Expert calls for military mental health 'quality mark'