Spain's PM seen weakened by corruption scandal

MADRID - Spain's Prime Minister Mariano Rajoy has survived resignation calls over a party slush fund scandal but he is now vulnerable to an affair that refuses to go away, analysts and papers said on Friday.

The financial scandal in the ruling, right-leaning Popular Party has outraged Spaniards suffering high unemployment, austerity measures and a recession.

But in a parliamentary grilling on Thursday, Rajoy scorned opposition calls for him to step down.

Political analysts and the press said the 58-year-old prime minister, who led his party to a landslide election win in November 2011, delivered a hard-hitting parliamentary performance.

For the first time, Rajoy admitted making a mistake in trusting the Popular Party's disgraced former treasurer, Luis Barcenas.

But he denied allegations that he received illegal payments himself and declared: "I am not going to declare myself guilty because I am not."

Many people would welcome the fact that Rajoy agreed to debate the scandal in parliament after months of damaging leaks in the press, said Cristobal Herrera, consultant at political communication advisors Llorente & Cuenca.

"A resignation is unlikely in the near future," Herrera said.

"Political stability is guaranteed because the government has an absolute majority in parliament and the Senate," he added.

It was impossible to say, however, whether new documents would emerge in judicial investigations into the affair that could force the prime minister's hand, he added.

Fernando Vallespin, political science lecturer at the Universidad Autonoma de Madrid, said Rajoy had no choice but to admit an error in his relationship with Barcenas after the publication of friendly mobile phone text messages he had sent to the former party treasurer.

"He can survive this legislature but his political career is already probably tainted," Vallespin said.