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Two former Spanish PMs to testify at slush fund trial

Two former Spanish prime ministers will testify as witnesses later this month in an illegal funding scandal centred on the rightwing Popular Party (PP), a court said Friday.

Two former Spanish PMs to testify at slush fund trial
Former Prime Ministers Jose Maria Aznar (L) and Mariano Rajoy (R) will testify in court on March 24th. Photo: Sagrario Cagigas/AFP

Mariano Rajoy, who was premier from 2011-2018, and Jose Maria Aznar, who served from 1996-2004, are scheduled to testify on March 24 in a trial focused on an alleged system of parallel bookkeeping used by the PP to manage undeclared funds.

The accounts were run by Luis Barcenas, who served as the PP treasurer between 1990 and 2009 during which time first Aznar and then Rajoy led the party.

The high-profile trial opened on February 8 at the National Court in Madrid and will run until May.

For nearly 20 years, the alleged slush fund was fed by donations from businessmen and used to pay bonuses to PP leaders and collaborators.

It also funded the renovation of the party’s Madrid headquarters, Barcenas has said.

Rajoy has always denied any knowledge of the system, although Barcenas has testified he was “perfectly aware” of it, telling the court last week that he was one of those who received envelopes of cash in the period before he became premier.

READ ALSO: Spain’s former PM ‘was paid illegal bonuses’, trial hears

“I gave them an envelope containing the amount they were owed,” he said, identifying the recipients as eight senior PP figures, among them Rajoy.

Details of the accounts emerged in the so-called “Barcenas papers” which were first published by El Pais newspaper in 2013.

Barcenas himself is currently serving a 29-year sentence over the so-called Gurtel case which centred on a vast system of bribes given to former PP officials in exchange for juicy public contracts between 1999 and 2005.

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PROPERTY

Spain’s plan to limit temporary accommodation rejected

Spain's left-wing government had planned to tighten its grip on temporary accommodation rentals as a potential means of making more long-term rentals available, but the country's right-wing parties on Tuesday rejected the proposal in parliament.

Spain's plan to limit temporary accommodation rejected

If passed, the new law would have meant that anyone who wanted to temporarily rent a property would have to explain why and provide a valid reason.

For example, students or researchers would have to show the research contract or course booking to show it would only last a few months.

It would have also meant that if more than six months passed or more than two consecutive contracts issued, it will have automatically become a long-term habitual residence instead.

On Tuesday September 17th, the proposal was ultimately rejected in the Spanish Congress, voted against by Spain’s three main right-wing parties – Catalan nationalists Junts, Spain’s main opposition party the PP and far-right Vox.

The aim in part was to try and rectify the controversial Housing Law, which came into effect in 2023.

In most people’s eyes, the legislation has failed as landlords have found several loopholes to get around the restrictions, prices have continued to increase and the stock of rental properties is even more diminished.

READ ALSO: Has Spain’s Housing Law completely failed to control rents?

As a result of the fear of heightened regulation for landlords, many have left the traditional market and turned to tourist rentals or temporary accommodation instead, which are far more lucrative. 

This has had the opposite effect, increasing rental prices instead of stabilising or decreasing them.

READ MORE: Why landlords in Spain leave their flats empty rather than rent long-term

Seasonal contracts and room rentals allow landlords to raise prices every six or nine months and they not subject to the price limitations of the housing law.

The idea of this new law was to try and set the maximum duration of a temporary rental contracts at six months in order to avoid this, but it could have potentially also caused problems for many who need this type accommodation such as students, digital nomads, those living here on a short term basis etc. 

During the debate, Sumar’s spokesperson, Íñigo Errejón, defended the law saying that it is a “solvent”, “fair” and “precise” proposal, which will help “correct an abuse” and “close the gap through which “Landlords can use to avoid the LAU (Urban Leasing Law) and rent regulation”.  

Far-left party Podemos blamed the ruling PSOE for having left this “hole” in the housing law, but also agreed that the restrictions on temporary accommodation were needed to try and rectify this.

READ ALSO: Has Spain’s Housing Law completely failed to control rents?

Junts (Catalonia’s main pro-independence party) and the PNV, the Basque nationalist party, were firmly against it. They agreed that the problem must be solved and that “accessible decent housing was needed”, but raised the situation of students, interns, residents or workers who need housing for flexible periods.

Junts party member Marta Madrenas warned of the harmful effects that this limitation on temporary rentals can have for university cities such as Girona.

Vox and the PP meanwhile argued that they don’t want to help cover up the mistakes made by the left with regards to the Housing Law.

Vox deputy Ignacio Hoces stated that the increase in seasonal rentals has occurred due to the “failure” of the Housing Law, since this has caused rental prices to “skyrocketed” by 13 percent and the supply to be reduced by 15 percent.

Temporary accommodation, referred to as alquiler temporal or alquiler de temporada in Spanish, is considered to be anything that’s longer than a month but shorter than a year, middle ground between short-term and long-term rentals. It is also referred to as monthly accommodation or seasonal accommodation.

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