The escalating conflict between the ruling Popular Party (PP) and its former treasurer, Luis Bárcenas, took a new turn on Friday when national police showed up at PP headquarters to investigate Bárcenas’ claim that two computers and personal papers were stolen from the office he allegedly had there.
Several police officers walked into party headquarters on Madrid’s Génova Street with a warrant on Friday to find out from a high-ranking official whether Bárcenas was truly using the office that he claims the material disappeared from, sources at the Madrid police department confirmed. Other sources said that members of the forensic police inspected the room in question, known as Sala Andalucía.
The PP told the police that “Mr Bárcenas does not have an office at PP headquarters.” The former treasurer, however, has directly accused Alberto Durán, a lawyer and top aide to PP secretary general Dolores de Cospedal, of ordering the theft of his computers and documents. The daily La Gaceta reported on Friday that two workmen had forced the lock on the room and cleaned it out.
This is just the latest in a flurry of complaints, lawsuits and counter-lawsuits being filed by all the parties involved in the expanding Bárcenas case. Alberto Durán earlier filed a lawsuit against Bárcenas and EL PAÍS in Cospedal’s name, while the PP is suing the United Left (IU) for libel after the IU brought action against the PP for serious crimes committed by its leaders, in reference to alleged illegal party financing and dubious cash payments to PP officials, all of which was documented by Bárcenas in secret ledgers that were recently published by EL PAÍS.
Earlier this week it emerged that Bárcenas was suing the PP for unfair dismissal. The party maintains that the ex-treasurer stopped working for the PP in 2010 after being implicated in a parallel scandal, the Gürtel kickbacks-for-contracts case. However, Bárcenas insists that he served as an advisor to the party from March 2010 until January 31 of this year. De Cospedal claimed that after Bárcenas stopped working in 2010 he agreed to draw his severance pay on a monthly basis, with monthly Social Security and tax deducted from it.
On top of all this, it recently transpired that Bárcenas was concealing a personal fortune of around 38 million euros in Swiss bank accounts, the origin of which remains murky. Bárcenas claims this money comes from art sales, consulting work and investments in real estate and the stock market.
In an attempt to start joining up the dots, investigating judge Pablo Ruz, who is in charge of the Gürtel bribes-for-contracts case affecting many PP officials (including Bárcenas, who lost his senator’s seat and was allegedly dismissed by the PP in 2010 over the issue), is trying to establish whether the kickbacks paid out by Gürtel coincide in any way with the sums of money showing up on the secret ledgers that Bárcenas allegedly kept, documenting illegal donations from construction tycoons and cash payouts to PP leaders, including current Prime Minister Mariano Rajoy. These ledgers show as much as 7.5 million euros of opaque money coming into the party between 1990 and 2008.
The ruling party is also planning a collective suit against Bárcenas, who has gone from being its trusted aide to the bane of the PP’s life.
The central government on Friday said it would challenge the legality of a sovereignty declaration made by the Catalan assembly in January with the Constitutional Court.
The decision was taken after the administration of Prime Minister Mariano Rajoy received the backing to do so from the State Council, a consultative body whose rulings are non-binding. The Council issued a judgment on Thursday that indicated there are sufficient legal grounds to dispute the assembly’s declaration on January 23 the Catalan people constitute a "sovereign political and legal entity."
The solicitor general’s office has also come out in favor of taking the issue of the declaration to the Constitutional Court on the grounds that it breached the article in the Constitution that upholds the “indissoluble unity of the Spanish nation.”
“Our obligation as the government is to comply with and ensure that laws are complied with,” Deputy Prime Minister Soraya Sáenz de Santamaría said at a press conference after the regular Friday Cabinet meeting. She said that the declaration by the Catalan assembly “is incompatible with the Constitution.”
In response, newswire Europa Press quoted Catalan premier Artur Mas as saying it was “out of place” for the Cabinet to challenge the declaration and called on Madrid to change its attitude.
And it does Spain seems like it will catch up with Italy in the political controversy circuses as the shock and awe of the Italian Election heads to the Coalition or not phase.....
If the new year started off with a bang, March is setting up to be quite a whimper. In the first news overnight, we got the "other" official Chinese PMI, which as we had predicted (recall from our first China PMI analysis that "it is quite likely that the official February print will be just as weak if not more") dropped: while the HSBC PMI dropped to 50.4, the official number declined even more to just barely expansionary or 50.1, below expectations of a 50.5 print, and the lowest print in five months. This was to be expected: Chinese real-estate inflation is still as persistent as ever, and the government is telegraphing to the world's central banks to back off on the hot money. One country, however, that did not have much hot money issues was Japan, where CPI declined -0.3% in January compared to -0.1% in December, while headline Tokyo February data showed an even bigger -0.9% drop down from a revised -0.5% in January. Considering the ongoing surge in energy prices and the imminent surge on wheat-related food prices, this data is highly suspect. Then out of Europe, we got another bunch of PMIs and while French and Germany posted tiny beats (43.9 vs Exp. 43.6, and 50.3 vs 50.1), with Germany retail sales also beating solidly to cement the impression that Germany is doing ok once more, it was Italy's turn to disappoint, with its PMI missing expectations of a 47.5 print, instead sliding from 47.8 to 45.8. But even worse was the Italian January unemployment rate which rose from 11.3% to 11.7%, the highest on record, while youth unemployment soared from 37.1% to 38.7%: also the highest on record, and proof that in Europe nothing at all is fixed, which will be further confirmed once today's LTRO repayment shows that banks have no desire to part with the ECB's cash contrary to optimistic expectations.
and the Five Star Movement puts its cards on the table regarding the next steps forward........
Five Star Movement could take limited role in Italian minority government
Co-founder Gianroberto Casaleggio says long-term M5S aim is to rule Italy and, until then, will not form pact with another party
The joint founder of the Five Star Movement (M5S), which holds the balance of power in Italy after its astonishing performance in this week's elections, has said it will not play any role in the formation of the country's next government.
But in his first interview since the results became known, Gianroberto Casaleggio, the digital mastermind behind the M5S's vertiginous ascent, signalled that the movement could provide limited support for a minority government, such as that proposed on Friday by the centre-left leader, Pier Luigi Bersani.
Italy and the eurozone plunged into crisis this week after no one party or alliance emerged from the election with the necessary outright majority in both houses of parliament.
Speaking exclusively to the Guardian, Casaleggio said: "If a government is put together, formed by other parties, the Five Star Movement will vote for everything that forms an integral part of its programme."
But, he added: "The president of the republic will decide whom to give a mandate to [to try to form a government]. He will decide if the conditions exist for forming a government, and whether that government has won the confidence of the chamber [of deputies] and the senate. We do not want to enter in to that process."
His comments represented an even harder line than that taken earlier this week by his co-founder, Beppe Grillo, who said he would represent the movement in the talks with President Giorgio Napolitano, which are aimed at resolving the deadlock. Grillo, however, slammed the door on a parliamentary pact with the centre-left and, in an interview with the Italian daily La Repubblica, Bersani closed off another exit when he dismissed proposals for a "grand coalition" with the right under Silvio Berlusconi.
"The idea of a grand coalition does not exist and will never exist," Bersani said. Instead, he proposed a minority centre-left government and said he had a seven- or eight-point plan to put to the president next week.
Casaleggio said his long-term aim was to bring the M5S to power on its own. Until then, it would not make agreements with any other political group.
He said observers had been wrong to see the huge vote for the M5S purely as a reaction to the economic crisis or the austerity policies favoured by Germany. Though the crisis had accelerated the movement's progress, it was essentially a product of the internet, he said, as it enables the direct democracy that the movement espoused and practised "What is happening in Italy is just the beginning of a much more radical change," he said. "It's a change that is going to touch all democracies."
The headquarters of the team that has spread panic through the rest of the EU could scarcely be in a less revolutionary location. The offices of Casaleggio's internet consultancy are in the most fashionable, and expensive, part of Milan – a stone's throw from La Scala opera house.
Opposite the entrance is a shop window full of mink coats. In the café round the corner, an espresso and cake will set you back €10 (£8.50).
In the senate, however, M5S's success meant neither the centre-left nor the right, led by Silvio Berlusconi, gained control. Since the two chambers have equal powers, a government must secure outright majorities in both for its legislation.
Italy's mainstream politicians have so far rejected fresh elections, fearing they could bring the M5S even more votes. Casaleggio, while insisting that "we have no suggestions to make", spoke approvingly of a fourth option – a technocratic government supported by the main parties, like the one headed by Mario Monti since November 2011.
He said: "The Monti government has had a majority that has allowed it to pass many laws and decree-laws." A return to non-party government would nevertheless be highly distasteful to other political leaders: it would lump them together in the eyes of the electorate, and bolster Grillo's argument that the M5S is the only true alternative.
"The members of the Five Star Movement are not the only ones who comment. There are others," he said. "So the fact that a few people comment on the blog doesn't meant that people in M5S don't share the line of the movement."
The issue is sensitive. Most of the movement's activists lean leftwards. Casaleggio himself ventured that the M5S's programme could be like that of the Swedish Social Democrats. Yet the line he and Grillo are pursuing could bring Berlusconi back into government.
Casaleggio referred to a code of conduct signed by the movement's new lawmakers before they stood in the election. It stipulates that M5S's parliamentary groups in the senate and chamber of deputies "must not join with other parties or coalitions, other than for votes on shared points."
"They knew from the beginning", he said.
Italian newspapers have reported that the shaggy-haired Casaleggio has been in behind-the-scenes talks with political leaders, including the former centre-left prime minister, Romano Prodi. But he laughed at the suggestion, insisting his only contact with Prodi had been at a lunch organised by the World Economic Forum four months ago.
"Prodi recognised me and greeted me," he said. Asked if other political leaders had telephoned since the election, Casaleggio said: "No one has called."
On the longer-term prospects for the M5S – founded just over three years ago – Casaleggio said they would "depend on how consistent we are". He added that, if the movement stuck to its principles and achieved changes, "we shall certainly grow".
Did he expect that one day the M5S would govern Italy?
We have some fresh analysis of the political situation in Italy tonight, from @AlbertoNardelli.
He sees three likely options:
1) A Bersani minority government receives sufficient support from a majority of senators.
It is fundamental to understand though that a Bersani, or any government, would need to win a confidence vote - a majority is required even to install a minority government. M5S has reiterated that it will not give any government a confidence vote, and PD rules out an alliance with the centre-right. An abstention is akin to a no-vote, and President Napolitano is unlikely to give Bersani, or anyone else, a mandate to form a government unless after consulting with parliamentary groups he believes there is a majority.
2) There aren’t the numbers to form an alliance or a minority government.
In this case, Napolitano would likely resign early and a Monti/technocratic government continue in the interim. The reason for this is that a president at the end of their term cannot dissolve parliament and call elections. Parliament would then need to elect a new president. The newly elected president would at that point consult with parliamentary groups, and if s/he too cannot see a feasible majority would need to dissolve parliament and call an election.
The strategy of the PD seems to evolve around these two options: a minority government or an election in the short-term with Bersani once again at the helm. In taking this road, I believe Bersani is flirting with fire. The PD leader is underestimating the level of support the M5S could hit in an election held in the short-term (and the implications of this) and the reasons why the PD fell short at the polls. A majority may well emerge from a new election (especially if held under a changed voting system), but it is far from certain that it would be to PD’s liking.
3) the newly elected president, in addition to exploring majorities within the current parties would likely also explore the possibilities of a caretaker government led by someone else.
This option would buy time, which in practical terms means elections in a year or so, with different party leaders. A caretaker government though, like a minority government, would require a confidence vote.
Alberto goes on to explain some of the key factors - including why Five Star Movement might favour a new election soon.
Back to Italy, and Beppe Grillo has just tried to sink Pier Luigi Bersani's efforts to become the prime minister of a minority government.
In a new blog post (see it here), Grillo accused Bersani and his Democratic Party of acting like "vulgar predators" by trying to persuade some his Five Star Movement's new senators to work with him.
Grillo pointed out that everyone who stood as a M5S candidate had agreed not to "associate with other parties or coalitions or groups except for voting on shared points".
Grillo declared that:
M5S, its elected officials, its activists, its voters are not for sale.
and added that Bersani does not realise he is "out of the story".
This looks like a blow to Bersani's hopes of persuading president Napolitano that he can build a consensus with M5S (see 8.47am).
Italy remains in a state of political flux this morning. Pier Luigi Bersani, the centre-left leader whose hopes of winning this week's general election were dashed, has this morning ruled out a Grand Coalition with the centre-right.
In an interview with the La Repubblica newspaper, Bersani insisted that he can become Italy's next leader without getting into bed with Silvio Berlusconi.
He declared:
I want to spell it out clearly: the idea of a grand coalition does not exist and will never exist.
Instead, Bersani hopes to persuade Italy's president, Giorgio Napolitano, that he could govern without a majority in the Senate (having narrowly won control of the lower house). He has drawn up a seven or eight-point plan to present to Napolitano next Wednesday.
Asked if his goal was to be prime minister in a minority government, Bersani said:
Call it what you want: a minority government, a government of purpose, I do not care.
I call it a government of change, which I assume the responsibility of guiding.
With Beppe Grillo ( refusing to back Bersani in a vote of confidence, a deal with Berlusconi was the only way the centre-left could get a majority in the Senate.
Some political analysts have questioned whether Napolitano would agree to a minority government, given the implicit instability. We'll find out next week....
In the meantime, the rest of Europe watches the events in Italy with interest. And one German politician has raised the possibility of the country abandoning the euro.
Klaus-Peter Willsch, a member of Angela Merkel's CDU party, has even declared that Italy should leave the eurozone, rather than hold fresh elections, if a majority of the population will not support the measures needed to support the eurozone.
A monetary union will survive only if it benefits all of its members.
It's a little early to be discussing Italy's exit from the single currency, I'd suggest - but Willsch's comments do show how much concern Italy has created.
Italian manufacturing output slides
Economic data just released shows that the Italian economy is in a bad way - manufacturing activity has fallen for the 19th month in a row, and by more than expected.
The monthly PMI survey came in at a mere 45.8 for February, down 47.8in January -- which means the country's manufacturing sector is shrinking at a faster pace [any number below 50 means contraction].
Other European economies are also reporting PMI data - and it shows that Germany continues to outperform weaker members of the eurozone.
German manufacturing PMI rose to 50.3, from 49.8 in January - meaning it returned to growth.
But France manufacturing sector is still shrinking, but at a slower pace (with a PMI of 43.9, up from 42.9 in January).
...and this graph shows how German and French manufacturers are now experiencing diverging fortunes:
French and German manufacturing PMI Photograph: /Markit
Eurozone unemployment hits record high again
It's official: Eurozone unemployment has hit a new record high of 11.9%, as the economic downturn forces more people out of work.
That's up from a new estimate of 11.8% for December (which has been revised up).
That means that 18.998 million men and women were out of work in the euro area, and a total of 26.217m people across the European Union.
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