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Spain's Corrupt Government Falls in Vote of No Confidence

The Spanish parliament finally had enough of the corrupt regime of Mariano Rajoy.

Prime Minister Mariano Rajoy of Spain lost a no-confidence vote on Friday, ousting one of Europe’s longest-serving leaders from office over a major corruption scandal within his conservative party.

Pedro Sánchez, the leader of the main opposition Socialist Party, is set to replace Mr. Rajoy as prime minister as soon as this weekend. But with Mr. Sánchez’s party holding just 84 of the 350 seats in Parliament, his mandate could be short-lived, paving the way for another general election.

The situation in Spain is different from Italy’s populist upheaval, though, since none of Spain’s main parties contest the country’s membership of the European single currency or promise an immigration clampdown. Rather, Mr. Rajoy’s demise is the result of a long-building corruption scandal that has tainted his conservative Popular Party and comes amid a territorial and constitutional crisis over Catalonia.

Bribes, Kickbacks, Corruption

Both the timing and the manner of his removal — in Parliament rather than in an election — were unexpected. Mr. Sánchez pounced on a court ruling last week that sentenced various business people and politicians, to prison.

The decision made the Popular Party the first Spanish political group to be convicted of operating a slush fund. It was ordered to pay a fine of 245,000 euros, or about $286,000, and the party’s former treasurer, Luis Bárcenas, was sentenced to 33 years in prison and fined €44 million. Spain’s national court also convicted 28 other businessmen and former politicians, who received more than 300 years in combined prison sentences for benefiting from a kickbacks-for-contracts scheme.

The no-confidence vote follows one-and-a-half days of tense parliamentary debate, whose turning point came Thursday afternoon, when the Basque nationalists agreed to join Catalan separatist lawmakers in voting against Mr. Rajoy. That about-face came only a week after the same Basque lawmakers used their pivotal votes to approve Mr. Rajoy’s new national budget, which includes a generous financial deal for the Basques. Mr. Sánchez promised the Basques that he would keep Mr. Rajoy’s budget untouched.

Backstabbing

Rajoy gave the Basque nationalists what they wanted to get their vote. Then Sánchez agreed to do the same if they voted against Rajoy.

What about the budget?

With socialists in charge, one might expect anything. However, Sánchez promised to keep Rajoy's budget. Regardless, Brussels cannot possibly be happy with this outcome.

Sánchez now get his turn at the simmering stew in Catalonia. On that front, he certainly seems more pragmatic that Rajoy. I recommend pardoning all of the arrested Catalonia political leaders.

Mike "Mish" Shedlock

It absolutely did not.
Sánchez gets a try at patching things up.

Eurointelligence: PP and Ciudadanos accuse Sánchez of arriving at government on the back of those who would break up Spain, and so one can expect stiff opposition on the constitutional front. But the government intervention in Catalonia under Art 155 of the constitution will now presumably lapse, and there is a chance for a détente.

Hi Mish, Yves Smith over Nake

"Sánchez agreed to do the same if they voted against Rajoy." He made a promise he may not be able to keep. PP controls the senate and the give away to the basque region still needs to be approve there. Rajoy could have resigned and force an election. The fact that he didn't do it tells me that PP will use their control of the senate to nail sanchez to the wall. By the time elections come (about a year if not sooner) PSOE will be done giving PP and Ciudadanos majority rule.

Hi Mish, Yves Smith over Naked Capitalism states in an article today it would take close to 5 years for the Italian banks to convert their payment and their key systems back to the Lira. Do you agree with her IT project timeline estimation?

Hi Mish, Yves Smith over at Naked Capitalism states in an article today it would take close to 5 years for the Italian banks to convert their payment and other key systems back to the Lira. Do you agree with her IT project timeline estimation?

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