16 Jul 2013

Spanish PM rejects calls to step down over scandal

10:09 am on 16 July 2013

Spanish Prime Minister Mariano Rajoy has rejected calls for his resignation over a ruling party financing scandal.

The opposition has demanded he quit and some members of his own party also say it is time for him to go.

The scandal involves alleged illegal donations by construction magnates that were supposedly distributed as cash payments to party leaders in return for contracts, Reuters reports.

A former treasurer of Mr Rajoy's People's Party, who was jailed in June and charged with bribery, money laundering and tax fraud, has given new testimony before a judge looking into the affair. Luis Barcenas said he made 90,000 euros in cash payments to Mr Rajoy and another party leader in 2009 and 2010.

Mr Rajoy is not charged with any crime and has repeatedly denied that he or other party leaders received illegal payments.

Speaking at a news conference on Monday, he said: "I will defend political stability and I will fulfill the mandate given to me by Spanish voters."

Mr Rajoy said the scandal will not derail his reforms aimed at combating Spain's deep recession.

Spain's fiscal woes last year threatened to push the government into seeking a bailout and for months the future of the common currency looked at risk as the eurozone's fourth biggest economy teetered.