Spain PM vows to fight on in face of corruption scandal

MADRID (AFP) - Prime Minister Mariano Rajoy on Monday dismissed calls for his resignation over a case of alleged corruption in which he is implicated, saying he has the same determination to tackle Spain's economic crisis as when he took office.

Leading centre-left newspaper El Pais on Thursday published account ledgers allegedly kept by two former treasurers of the ruling Popular Party that purportedly show that at least a dozen senior party officials, including Rajoy, received payments from a secret slush fund.

The report has sparked daily protests by hundreds of demonstrators outside the right-leaning party's headquarters in Madrid as well as in other locations across the country at a time when the unemployment rate stands at a record 26 per cent and the government is imposing tough spending cuts.

The leader of Spain's opposition Socialist party, Alfredo Perez Rubalcaba, on Sunday called on Mr Rajoy to resign over the corruption scandal while an online petition to oust the prime minister had gathered more than 850,000 signatures by Monday evening.

"The whole thing is absolutely false," Mr Rajoy told a joint news conference with German Chancellor Angela Merkel in Berlin when asked about the corruption allegations.

"Today I have the same enthusiasm, the same courage, the same determination to get Spain out of the most difficult situation which it has experienced in the last 30 years as when I came to power," he added.

Mr Rajoy took office in December 2011 after ousting the Socialist party in a landslide, and his Popular Party holds one of the strongest parliamentary majorities in Europe.

Earlier on Monday the Popular Party announced it would take legal action against anyone who published or leaked information implicating its executives in the case of alleged corruption.

The Popular Party will launch lawsuits against "anyone or any group of people who have accused the Popular Party or its management structure of illegal or irregular actions", one of the party's secretaries, Carlos Floriano, told reporters.

The lawsuits will target "all those who leaked" the allegations as well as "those who published them", he added without specifying who would be cited in any legal action taken by the party.

"We cannot tolerate in any way any suggestion of illegal, irregular or reprehensible practices in the Popular Party," Mr Floriano added.

El Pais said the slush fund used to make the illegal payments to top Popular Party officials was made up of donations, mostly from construction companies.

Ledgers kept by one of the former party treasurers cited by the newspaper, Luis Barcenas, apparently showed payments including 25,200 euros (S$42,150) a year to Mr Rajoy between 1997 and 2008.

Barcenas was already under investigation in connection with a separate corruption case. Spanish media reported last month that he had millions of euros in a Swiss bank account.

He has denied that the Popular Party kept secret accounts and that Rajoy and other top party figures received under-the-table payments.

"I say it is a gross manipulation," he said on Monday in an interview with the Antena 3 television station.

"There does not exist, nor has there ever existed, secret accounts," he added.

Mr Rajoy has said that case had nothing to do with the party and that it had never had foreign bank accounts.

"We must not allow Spaniards, of whom we are demanding sacrifices, to think that we do not observe the strictest ethical rigour," he said on Saturday in his first public reaction to the corruption allegations at the party's headquarters in Madrid.

The scandal drove Madrid share prices sharply lower on Monday, with the Ibex-35 index of most-traded shares closing down 3.77 per cent.

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