In Spain, the scandal involving the conservative Popular Party has been ongoing since early 2013, when Spanish media revealed that former party treasurer Luis Barcenas kept informal accounting books, in which he registered secret payments from businessmen and companies to members of the ruling party, including Rajoy, between 1990 and 2009. Barcenas' initial reaction to the reports was to deny their veracity, but he later admitted that the books were indeed real.
Until recently, Rajoy's strategy was to avoid mentioning the case in public, minimizing his government's links with the former treasurer, who was dismissed in 2009 after a separate corruption scandal. But after Spanish newspaper El Mundo obtained a series of text messages between Rajoy and Barcenas from early 2013, pressure from the Spanish opposition grew, eventually forcing Rajoy to address the scandal before the Spanish parliament, where he denied any wrongdoing and said he would not resign.
The issue has divided the Spanish opposition. While the center-left Socialist Workers' Party, which controls the second-largest number of seats in parliament, is demanding Rajoy's resignation, the party says it would allow his replacement to be another member of the ruling Popular Party. By comparison, smaller parties on the left are demanding early elections. The split highlights the current political dynamic in Spain: Mainstream parties are wary of elections, since the crisis has eroded their popular support, while smaller, usually left-wing parties see an opportunity to capitalize on their growing popularity at the polls.
Meanwhile, the Spanish population has also been questioning the legitimacy of other state institutions. In early July, for example, Spanish media revealed that the president of the Spanish Constitutional Court, Francisco Perez de los Cobos, was a former member of the Popular Party — a fact that he did not disclose when he was elected by parliament in June, casting doubt on his impartiality as a magistrate. According to a recent opinion poll, around 70 percent of Spaniards believe Perez de los Cobos should resign. The issue is particularly sensitive for the government of Catalonia, because the autonomous region is pushing for independence — a move that could eventually be blocked by the Constitutional Court. On July 31, the Catalan government announced that it would ask Perez de los Cobos to resign.
Persistent Political Chaos in Italy
Italy is also in the midst of a delicate situation caused by corruption scandals. For the past month, the country's political world has revolved around the legal woes of Berlusconi, whose People of Freedom party is a key supporter of current Prime Minister Enrico Letta's government. Prosecutors allege that Berlusconi's Mediaset network inflated the price for the rights of some 3,000 films, and an appeals court in Milan found him guilty. In the weeks leading up to the Supreme Court's ruling, Berlusconi suggested that he could withdraw parliamentary support for Letta if the sentence against him was confirmed, thus making the government fall.
The court's ruling, however, will buy time for Letta's government. Though Berlusconi was found guilty, three of the four years of his prison sentence have been commuted under an amnesty, and he will likely be allowed to serve the remainder of his term either under house arrest or by doing community service (this will be decided in October). Moreover, the Supreme Court ordered the lower court to review the five-year ban from public office it included in the original sentence, and a decision on the sanction will likely not be made until later this year.
Ultimately, Berlusconi's political future will be determined by the Italian Senate, which could decide to pardon the former prime minister in a secret vote expected to be held in early September. This would create serious tensions between Italy's main political parties. Berlusconi's People of Freedom would naturally support its leader, but Letta's center-left Democratic Party would have to choose between expelling Berlusconi, thus collapsing the government, or pardoning him and angering the party's base.
This latest round of political turmoil has erupted at a time when the Italian Parliament is debating several key economic and political issues. Lawmakers will need to decide what to do with Italy's value-added tax, which is scheduled to increase Oct. 1, as well as the country's controversial real estate tax, which affects most households. Over the longer term, the Italian Parliament will begin discussions to reform the country's electoral law and Constitution.
Fragile Alliances
Despite the turmoil, the Spanish and Italian governments will both survive for the time being. In Spain, the Popular Party holds a comfortable majority in parliament, enabling it to block no-confidence votes from the opposition, and most in the party still strongly support Rajoy. This makes early elections unlikely at this point in Spain. However, prolonged political scandals will continue weakening popular support for the government, consuming time and political resources needed to address the country's economic issues, especially unemployment.
The situation facing the government is considerably more tenuous in Italy, where Berlusconi will continue his threats if Parliament does not help resolve his legal problems. Letta's government will also probably survive the next few months, and early elections are unlikely to take place before the end of the year. However, Berlusconi's perpetual legal problems (he currently has six other issues making their way through the judicial system), and the complicity of the center-left in his political survival, will erode popular support for Italy's mainstream parties. As in Spain, Italy's political controversies will undermine government efforts to deal with pressing issues.
Europe's economic crisis has led to unusual political alliances around the Continent, with beleaguered mainstream parties cooperating with one another due to fears of the emerging fringe parties. In Greece, for example, the country's traditional political adversaries — the center-right New Democracy Party and the center-left Panhellenic Socialist Movement — have managed to form a fragile coalition government. This dynamic exists in Italy, where Berlusconi and his center-left adversaries jointly supported former Prime Minister Mario Monti's government in 2012 and Letta's government in 2013. In Spain, the Socialist Worker's Party does not directly support the Popular Party, but its decision not to push strongly for new elections is striking. For traditional elites in both Italy and Spain, reluctant collaboration is the political reality while Europe is in crisis.
