the euro zone
Nightmarish though it is for Pedro Sánchez, the ongoing battle with Catalan separatists is distracting public attention from the so-called ERE corruption case, in connection with which José Antonio Griñán, Socialist premier of Andalucía from 2009 to 2013, received a six-year prison sentence last month. For now at least, Catalonia is acting as a smokescreen, behind which the details of yet another vast and intricate fraud scandal are emerging.
Prosecutors in ERE - which is named after the Spanish acronym for a workforce lay-off scheme - argued that PSOE ministers in the Socialist Andalusian government fraudulently distributed €680 million of public money between 2001 and 2010. In total, 21 former PSOE ministers were tried for misconduct and/or misuse of public funds and 19 were found guilty of either or both offences. Yet despite the fact that ERE has been overshadowed by recent events in Barcelona, it reveals the Socialists to be just as susceptible to corruption and fraud as their arch-rival, the conservative People's Party (PP).
Although Sánchez is not directly implicated in ERE, the case couldn't have concluded at a worse time for the embattled Socialist leader. It was Sánchez, after all, who last June tabled and won a no-confidence vote against his predecessor Mariano Rajoy over the Gürtel kickbacks-for-contracts scandal. This sprawling case saw the PP fined for benefiting from fraudulent practice, the party's former treasurer, Luis Bárcenas, sentenced to 33 years in prison and Rajoy himself testifying - the first time in Spanish history that a prime minister appeared as a witness in a criminal trial. In the wake of these damning verdicts, the PP faces a formidable task in regaining voters' trust.
ERE has the potential to inflict as much reputational damage on the acting government as Gürtel caused the PP, but that's not to say that Sánchez should resign - the course of action requested by Albert Rivera, ex-president of the centrist group Ciudadanos. Pablo Casado, who took over as PP leader from Rajoy last June, also said that his party cannot support Sánchez at the upcoming investiture votes; the PSOE, he claimed, stands revealed as "the protagonist of the biggest corruption scandal in the history of Spain" (a questionable description, despite ERE's severity).
During the decade that ERE's key players were running Andalusia, Sánchez was a city councillor in Madrid. In other words, he has about as much responsibility for the people involved as Casado does for the protagonists of Gürtel, the latter of which can more plausibly be described as Spain's biggest ever corruption scandal. If we were to ask for the resignation of every senior Spanish politician who belongs to a party tainted by corruption, there would hardly be any occupied seats left in congress. Still, the smokescreen behind which the PSOE is currently hiding won't (and shouldn't) last forever.