Rajoy under pressure over fortune
Pressure is growing on Spanish conservative prime minister Mariano Rajoy to explain how a former party treasurer amassed 22 million euros (£18.5 million) in a Swiss bank account.
Although no arrests have been made or charges filed, the scandal is hitting Mr Rajoy, who is demanding sacrifices from Spaniards as the country battles to emerge from recession with 25% unemployment.
His Popular Party has been equally shaken by widespread newspaper reports that the former treasurer, Luis Barcenas, also allegedly distributed under-the-table bonuses to party leaders in payments from construction firms.
The Popular Party has denied all wrongdoing and promised it will commission an external audit of its finances to fend off the corruption allegations. The Barcenas case follows other scandals involving bankers, politicians, town councillors and even the royal family.
The Popular Party's absolute majority allowed it to vote down a proposal by the Socialist opposition party and other groups for Mr Rajoy to make a special parliamentary appearance to discuss the case. But it was agreed that he should answer queries on the issue in the routine weekly questioning session on January 30.
In the year since taking office, his government has ushered in major labour and financial reforms, as well as cutting pension increases and civil servant wages and raising taxes. The attempt to convince European Union authorities and investors it is serious about reducing its swollen deficit and will not need a bailout has caused widespread pain among the public.
"It's very difficult to sell austerity when there is suspicion you are being robbed," said Jose Antonio Olmeda, Political Science professor at Spain's Open University. "It's a blow to his political management and weakens his authority, but he is obliged to do what Europe wants him to do."
Opinion polls show Spaniards have little faith in their political parties while 300 politicians are reported to be implicated in corruption cases across the country.
Barcenas, who served for one year as the party's treasurer and 19 as its assistant treasurer, resigned in 2009 after he was first named in a National Court probe into alleged irregular financing practices by the party. His lawyer has denied the Swiss account money was illegally obtained or linked to the Popular Party.