Spanish Premier Rejects Calls to Resign

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Spanish Prime Minister Mariano Rajoy rejected what he called efforts to blackmail him into resigning, following the release of text messages between him and a former party treasurer who is under investigation for fraud and money laundering.

Mr. Rajoy denied that the text messages published in the local media Sunday show anything improper in his dealings with Luis Bárcenas, the former treasurer of the premier’s Popular Party,

Mr. Bárcenas, who hasn’t been formally charged, has been in preventative detention since late June under a court order. Mr. Bárcenas, who handled the Popular Party’s accounts for nearly two decades, testified behind closed doors at the National Court on Monday in Madrid. Attorneys for Mr. Bárcenas didn’t immediately respond to requests for comment.

“The great benefit our country has right now is political stability, and I am going to defend it,” said Mr. Rajoy, who was backed on Monday by top officials from his party.

But Socialist party leader Alfredo Pérez Rubalcaba insisted Mr. Rajoy step down, accusing the prime minister on Sunday of “conniving with a criminal.”

While the Socialists face an uphill battle in ousting Mr. Rajoy and financial markets remain calm, the investigation presents a further headache for the prime minister, whose popularity is sagging because of Spain’s depressed economy.

The Spanish newspaper El Mundo on Sunday published at least a dozen text messages between Messrs. Rajoy and Bárcenas from the past two years. Some of the messages came in January, after the Spanish media reported anonymous allegations that Mr. Bárcenas had administered a slush fund that channeled money from Spanish companies seeking government contracts to party politicians.

In one exchange from January, Mr. Bárcenas complains that the Popular Party was hanging him out to dry. Mr. Rajoy responds: “Luis. I understand. Be strong. I will call you tomorrow. A hug.”

In the final text published, from March 14, Mr. Bárcenas rails against Popular Party lawyers he said had impeded access to people he sent to look through boxes of his documents at party headquarters. The lawyers weren’t named.

“You must know what game you’re playing, but I’m free of all my commitments to you and the party,” Mr. Bárcenas wrote to Mr. Rajoy.

The Popular Party confirmed the authenticity of the messages, but said they didn’t compromise Mr. Rajoy. Mr. Rajoy and his party have repeatedly denied the existence of any illegal accounting and unofficial payments. In response to a question about Mr. Bárcenas on Monday after a news conference with the prime minister of Poland, Mr. Rajoy said he had no intention of stepping down.

“The rule of law does not submit to blackmail,” he said. He added that the text messages confirm that he never submitted to pressure from Mr. Bárcenas for lenient treatment.

On Monday, Spain’s deputy prime minister, its economy minister and the Popular Party’s vice secretary-general for organization all spoke out in defense of Mr. Rajoy. Carlos Floriano, the vice secretary-general, said Mr. Bárcenas had fabricated the unofficial ledgers to exert pressure on the government so it would intervene in his favor in the case. “We have nothing to hide.”

In an interview with El Mundo in June, Mr. Bárcenas said the ledgers were accurate and that he had written them.

Investors shrugged off the text-message revelations. Spanish government borrowing costs tightened slightly on Monday and the country’s stock market barely budged.

On Monday, the Socialists held meetings with other opposition parties to discuss a common strategy. Socialist Party leaders also threatened to present a censure motion in Parliament to force Mr. Rajoy’s removal from office, but its chances of success are low. The Popular Party has a large parliamentary majority, ensuring that the prime minister would survive such a vote without large-scale defections from his party.

Nevertheless, the situation could further erode support for Mr. Rajoy when Spain is mired in a recession, with an unemployment rate of 27%.

And not everyone inside the Popular Party remains supportive of the prime minister. Alejo Vidal-Quadras, vice president of the European Parliament, and two other Popular Party members on Monday called for an extraordinary meeting of party officials to discuss a potential change in party leadership.

“The situation is no longer sustainable,” Mr. Vidal-Quadras said. “The party is in a state of paralysis which we cannot allow to go on.”

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