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Rajoy falls, pays price for corruption in Spain

Socialist leader Pedro Sanchez rises to helm

- BLOOMBERG

MADRID: Spanish Prime Minister Mariano Rajoy was defeated yesterday, overwhelme­d by the drumbeat of corruption revelation­s that has grown throughout his seven years in office.

Mr Rajoy, 63, was ousted by a noconfiden­ce vote in parliament after the anti-establishm­ent group Podemos and Catalan separatist groups lined up behind Socialist leader Pedro Sanchez. Mr Sanchez is due to be sworn in as premier by King Felipe in the coming days.

In a brief speech to parliament before the vote, Mr Rajoy accepted defeat and wished his successor well. “I will accept as a democrat the result of the vote as it is well-known,” Mr Rajoy said. “I can’t agree with what has been done.”

Elected by a landslide in 2011 as Spain’s property crash spiraled into a full-blown financial crash, Mr Rajoy took a European bailout to fix the country’s banking system and laid the foundation­s for an economic rebound that’s now in its fifth year.

But the seeds of his demise were there from the start. His 2010 legal challenge to new powers for the Catalan government triggered a resurgence in separatism that would fatally damage his authority seven years later when the region threatened to break away from Spain. And prosecutor­s were already investigat­ing the People’s Party (PP) corruption racket that ultimately forced him out.

“He leaves Spain with a more divided society and a political culture that has suffered great damage,” Alejandro Quiroga, professor of Spanish history at Newcastle University, England, said. “The corruption has been brutal.”

Mr Rajoy is the last of a generation of conservati­ve politician­s who shaped modern Spain for good and ill. He was at Jose Maria Aznar’s side as the PP’s first prime minister fanned the second economic boom since Spain’s return to democracy in in 1978.

Mr Rajoy served as minister of public administra­tion, then education, interior and eventually deputy prime minister. In 2003, Mr Aznar handed over the leadership to him. According to a verdict by the National Court last week, officials at the party headquarte­rs in Madrid were already taking kickbacks from companies seeking public contracts.

Since those days, Mr Rajoy has survived two election defeats as party leader, an EU rescue and even a helicopter crash. But the specter of corruption was creeping closer.

In 2013, El Pais newspaper published ledgers from a secret party slush fund that showed regular payments to “M. Rajoy”. El Mundo printed text messages in which the prime minister promised to do whatever he could to help former party treasurer Luis Barcenas, who was caught up in the corruption probe. Mr Rajoy denied any wrongdoing.

In 2014 he apologised in parliament for what he recognised then was an “accumulati­on of scandals”. His colleagues from the Aznar government helped fuel the perception of a party “gone rotten”.

Former Finance Minister Rodrigo Rato was handed a jail term for the misuse of corporate credit cards while leading Bankia SA to the brink of a collapse that forced the government to seek 41 billion euros in European bailout funds. Mr Aznar’s former Labour Minister Eduardo Zaplana was arrested this month on money laundering and bribery charges. His family has said he’s done nothing wrong.

Stripped of his majority in 2015, Mr Rajoy refused to step aside in favour of a less divisive candidate, and eventually reclaimed power after a 10-month standoff and a repeat election, albeit at the head of a fragile minority government.

Any chance of a broader resurgence was cut short by former Catalan President Carles Puigdemont’s declaratio­n of independen­ce last October. While the break away attempt foundered, voters identified the Ciudadanos party as a more capable defender of national unity.

Mr Rajoy still managed to steer the delayed 2018 budget through parliament last week, apparently clearing a path to preside over two more years of economic growth.

When his luck changed, it did so quickly. The National Court handed down a string of sentences against former PP officials including Mr Barcenas who was sent to jail for 33 years for his part in the PP racket.

 ?? AFP ?? Pedro Sanchez waves during a political meeting with supporters at Sevilla.
AFP Pedro Sanchez waves during a political meeting with supporters at Sevilla.

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