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Spanish PM faces calls to resign; scandal to destabilize Europe's calm waters?

Spanish Prime Minister Mariano Rajoy continues to face growing criticism after the scandal which hit his party earlier last week, in which allegations were made about illegal payments received by himself and what appear to be a very large list of members from the party he presides.

As it is logical on the political circus, it only took a few days until the main Socialist opposition party asked the Prime Minister to step down. As Bloomberg reports, citing opposition leader Alfredo Perez Rubalcaba during a press conference on Sunday, only a day after Rajoy also made a public appearance to remain still on denial:

Rubalcaba: “Rajoy should resign to make way for another prime minister who can re-establish the strength, credibility and stability that Spain needs,” “Spain needs a strong, credible, and trustworthy government.”

Rajoy said: "If someone believes that because of this harassment that I’ll lose spirit or abandon the task given to me by the Spanish people, then they are wrong. This government has set itself a task and I assure you it won’t be sidetracked.”

The data unveiled by the top selling Spanish newspaper El Pais over alleged illegal donations to key political figures such as Rajoy has sparkled a very tense environment.

The numbers published by El Pais show payments over an 11-year period to Mariano Rajoy worth around 25,000 euros each year from a private fund set up by Barcenas, former PP Treasure and main person accused in the scandal.

From Bloomberg: “In a recession of this magnitude, the worst thing that can happen to the Spanish economy is a political scandal,” said Jose Carlos Diez, chief economist at Intermoney SA in Madrid. “This is a theme that is going to be in the spotlight for a while and could undermine investor confidence if not addressed quickly.”

At present, surveys carried out by Metroscopia in recent days suggest that support towards Rajoy's ruling party is the lowest in the party’s history due to the economic turbulence and the evident corruption to the bone from the party.

There is even some vague chatter that a potential coup to expel the current government is being prepared through a technocratic formation offensive from people within the very same PP party with close links to Euro technocrats and bankers.

As explained in De Verdad by Joan Arnau Digital, when "two strong Spanish newspapers such as El Mundo and El País-authoritative voice of the oligarchy and hegemony - publish on the front page news like this, capable of causing a political earthquake, somebody and someone important must be looking to profit from the scandal."

Forex: EUR/USD on track to 1.3800 - TDS

With currently EUR/USD at fresh session lows 1.3624, TD Securities Toronto based FX Research Team believes that: “The sustained push through short term resistance at 1.3402 (bull flag neckline trigger) keeps EUR/USD on track for a move to 1.3800,” the analysts say, adding: “With short, medium and long-term trend momentum indicators still bullishly aligned, we think there is still quite a bit more to come in this move up."
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