Spain's PM says to address graft scandal

Bowing to pressure from the opposition, Spain's prime minister said Monday he will appear in parliament to answer questions over allegations he received secret payments from a slush fund run by his conservative Popular Party.

"I will go before parliament to offer all explanations," Prime Minister Mariano Rajoy told a joint news conference with his Romanian counterpart Victor Ponta when asked if he would address the affair in the assembly, as had been demanded by the main opposition Socialist Party.

"I want to give explanations to parliament, tell what happened and give my version, I think citizens need that."

Rajoy has denied receiving illegal payments and has said he will not step down over the affair.

Over the past week, pressure has increased on the Spanish leader to answer questions from lawmakers in parliament regarding the scandal, with fresh indications he may have received illegal payments from a slush fund run by his Popular Party's former treasurer Luis Barcenas.

Barcenas testified in court on June 15 that Rajoy received 25,000 euros ($33,000) in cash in 2010.

Opposition Socialist leader Alfredo Perez Rubalcaba has threatened to introduce a motion of censure against Rajoy if he does not appear. Rubalcaba told the centre-left daily El Pais on Sunday that Rajoy "cannot continue to govern if he does not explain" the scandal in parliament.

Nearly nine in 10 Spaniards, 89.1 percent, feel Rajoy should explain himself in parliament over the scandal, according to a poll published Sunday in centre-right daily newspaper El Mundo which has been aggressively pursuing the graft scandal.

The survey also found that just under two-thirds (65.6 percent) of respondents believed Rajoy had received payments, with 19.6 percent saying the opposite.

Rajoy said he had spoken to the head of parliament to ask to appear in the assembly at the end of July or the beginning of August.

He said he would offer explanations "on the economic situation facing the country, with new figures that we know at that time, but also on the political situation, and I will speak to the subject that interests you," he added.

"I think the time has come to explain to parliament what the situation is and take stock of what we have been doing lately."

Until now Rajoy has used the absolute majority his party won in a landslide election victory in 2011 to block calls for him to face questions in parliament over the scandal.

The grey-bearded premier has batted off calls to resign over the affair as he fights a crippling recession, a record unemployment rate of more than 27 percent and regular street protests against sharp spending cuts and tax hikes put in place to rein in a ballooning public deficit.

The scandal has also tarnished the image of the party, which was elected on promises to revive the economy.

The scandal first erupted in January when a newspaper published copies of account ledgers purportedly showing irregular payments to top party members including Rajoy who has led the Popular Party since 2004.

The noose had appeared to tighten on Rajoy earlier this month when El Mundo published friendly text messages he purportedly sent to Barcenas from May 2011 to March 2013, some two months after the scandal erupted. "Luis, I understand, be strong. I will call you tomorrow. Best wishes," said one of the messages from Rajoy to Barcenas, dated January 18 when El Mundo first published allegations over the slush fund.

The money in the slush fund reportedly came from illegal donations from construction magnates that were then distributed as cash payments to top Popular Party officials.

The Spanish economy, the euro zone's fourth largest, went into a tailspin after a lbour-intensive property boom collapsed in 2008.

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