Spanish PM will face no-confidence vote over government corruption scandal

Spanish Prime Minister Mariano Rajoy will face a vote of no confidence after courts ruled that the governing Popular Party profited from a large kickbacks-for-contracts scheme, the Socialist opposition announced Friday.

Judge in so-called Gurtel corruption case hands out sentences totalling 351 years for 29 people

Spanish Prime Minister Mariano Rajoy had mentioned the possibility of running for another term, but that is in doubt after this week's convictions. (Paul Hanna/Reuters)

Spanish opposition parties launched a fierce campaign Friday to end the conservative government of Mariano Rajoy after courts ruled that his Popular Party profited from a large kickbacks-for-contracts scheme.

The Socialist opposition announced a vote of no confidence against the prime minister with the backing of anti-establishment and left-wing parties, while the pro-business Ciudadanos (Citizens) — which had supported the conservative minority government until now — urged Rajoy to call a fresh election.

But Rajoy ruled out stepping down, saying he was committed to remaining in power until the end of his term, in 2020.

"All this is nonsense," the 63-year old conservative politician told reporters in a televised press conference. He called the opposition's move "opportunist," and said the no-confidence vote "goes against the stability in Spain, damages the economic recovery, introduces uncertainty and goes against the interests of all citizens."

The moves followed the conviction of 29 businesspeople and former Popular Party officials for crimes including fraud, tax evasion and money laundering over the 1999-2005 illegal scheme that, according to Thursday's court decision, helped fund the ruling party.

The ruling triggered "social indignation" that has put Spain "in a situation of an extreme institutional crisis," Socialist leader Pedro Sanchez said Friday.

"There is only one person responsible for the political disaffection," he told reporters. "That person is called Mariano Rajoy."

Pedro Sanchez, shown at Friday's news conference in Madrid, is leader of the Spanish Socialist Party. He filed a no-confidence motion Friday against Prime Minister Mariano Rajoy after his conservative Popular Party was found guilty of benefiting from illegal funds in a graft trial. (Gabriel Bouys/AFP/Getty Images)

Parliamentary rules in Spain require a proposal of an alternative prime minister in a no-confidence vote.

Sanchez said he will call elections if he wins the vote. Meanwhile, the popular center-right Ciudadanos (Citizens) party urged Rajoy to call elections or threatened to push for a separate no confidence vote.

"We need a clean and strong government to confront the separatist defiance [in Catalonia]," its leader, Albert Rivera, tweeted.

Vote as early as next week

No date has been set for the vote, but it could be as early as next week according to parliamentary rules. The Socialists will need at least 176 of the 350 votes in the national congress, where they only control 84 seats as opposed to 136 held by the Popular Party.

Although the Socialists have enlisted the backing of 71 leftwing and anti-establishment lawmakers, they would need the 32 extra votes of the pro-business Ciudadanos, which is reluctant to side with the left-wing or the Catalan separatists.

A successful motion of no confidence is unlikely at this stage, said Antonio Barroso, an analyst with the London-based Teneo Intelligence consultancy firm.

"Opposition parties will likely engage in a blame game rather than effectively coordinate to get rid of Rajoy," he said.

Friday's political jockeying comes after a roller-coaster ride this week for Rajoy's party, whose win on Wednesday of a key approval for the 2018 national budget had secured, in theory, enough breathing space for him to survive until the end of the current term in 2020.

But the setback came less than 24 hours later in the form of a 1,687-page ruling on the so-called Gurtel case, considered one of the gravest corruption episodes in Spain's modern history.

The judges issued prison sentences totalling 351 years and a $370,000 Cdn fine for the conservative party in power, which the ruling describes as a "profit-seeking participant" in the scheme.

The verdict also considered that a network involving companies and party officials was established to arrange travel and organize events for PP in exchange for public contracts.

In some of the most damaging parts of the ruling, the judges also said that PP ran a slush fund at least until 2008 and questioned the credibility of Rajoy when he denied knowing that the scheme was in place during a court hearing where the prime minister testified as a witness.

Francisco Correa, the businessman considered the scheme's mastermind, was sentenced to nearly 52 years in prison and Luis Barcenas, who was the party's accountant for three decades and a PP senator, to 33 years and more than 44 million euros in fines.

The convictions immediately triggered turmoil for the embattled government of Rajoy, who is combating separatist defiance in Catalonia and has for years defended his party against dozens of corruption allegations. Spain's leading El Pais newspaper opened its Friday editorial calling Rajoy's cabinet a "zombie government."

The ruling party has said it will appeal the part of the verdict that found it was a profit-seeking participant in the scheme. Rajoy has not made public comments since the court decision but the prime minister's office said in a statement on Thursday that nobody in the current administration or in the party's leadership was aware of any illicit practice.

Rajoy, who has said he wants to run for a third term as prime minister after 2020, repeated on Friday that nobody in the current administration or in the party's leadership was aware of any wrongdoing, and that the court ruling only fines his party without handing any criminal charges.

Spanish stocks plummeted on Friday as the political crisis unfolded, with the benchmark Ibex 35 index losing around 2 percent of its value by mid-afternoon.

With files from Reuters