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THE EURO ZONE

A perfect storm

Is there no end to the woes of Spain's ruling Popular Party (PP)? It has emerged that Cristina Cifuentes, leader of the conservative PP in Madrid, obtained a master's degree from Rey Juan Carlos University (URCJ) under questionable circumstances. Allegedly, she used her political connections to obtain the qualification without doing any work - a charge which, if true, makes a mockery out of the university and destroys her credibility. As if this weren't enough, the 2018 budget fiasco continues and the PP has been dealt a fresh blow over Catalonia, which in turn will prolong the budget fiasco. Economic and political factors have combined to create a perfect storm around the Spanish Conservatives.

Political problems are delaying the proposed 2018 budget. Prime minister Mariano Rajoy only commands a minority government and is dependent upon support from hostile parties. The group blocking his path is the Basque Nationalist Party (PNV), which stands to gain an extra €190 million in subsidies if it approves the PP's delayed spending plan. Yet the PNV is unmoved by Madrid's offer of extra cash: it will only approve the budget if Rajoy removes centralised control of Catalonia, which he imposed at the height of the Catalan crisis last October.

Rajoy cannot relinquish control of Catalonia, though, until the Catalan parliament forms a workable new administration. The region's former, pro-independence president Carles Puigdemont was released on bail in Germany last week, after German courts ruled he couldn't be extradited back to Spain on rebellion charges. He might still be extradited for misusing public funds - but even so, Catalan separatists have voted (symbolically) for his right to serve as the region's president again. In doing so, they remain stubbornly unpragmatic.

No wonder that the chairman of Catalan bank La Caixa - which moved its headquarters from Barcelona to Palma de Mallorca last October - said recently that the relocation had been a “good move”. No wonder, either, that Rajoy retains control of the troubled region, albeit at the expense of securing approval for the 2018 budget.

On top of all this, there's now the issue of Cifuentes' dodgy degree. We're accustomed, of course, to financial corruption dogging the PP, but this is a relatively new kind of scandal. Cifuentes' possible replacement - in the unlikely scenario that she's fired - is the PP's fresh-faced Communications deputy Pablo Casado, supposedly a member of the Conservatives' young, untainted generation.

Casado, however, was also awarded a degree by Cifuentes' “alma mater”, and his right to hold it is under investigation too. URCJ apparently told him that it wasn't necessary to attend classes or take exams to obtain the master's - a disclosure which might well boost this relaxed institution's application numbers. Meanwhile, the perfect storm engulfing the PP rages on.