Spain's Rajoy on offensive over 'damaging' Barcenas scandal

Mariano Rajoy said his government remains "stable" despite the scandal

Spain's Prime Minister Mariano Rajoy has faced calls by the opposition for his resignation, questions from journalists seeking explanations for potentially damaging allegations, and anger from people across Spain at alleged illicit party payments.

But at no point during this now five-and-a-half month old scandal has the resignation of Mr Rajoy ever looked likely, or even possible.

Mr Rajoy's centre-right Popular Party (PP) was handed a clear mandate by Spanish voters at the end of 2011, and as a result he, and his party, enjoy a clear majority in the Spanish parliament.

So on Monday, Mr Rajoy told us the expected - he is not going anywhere.

However, nor is this scandal.

Luis Barcenas, the PP's former treasurer after whom the scandal is named, was a member of the party's inner circle.

As the text messages published by El Mundo newspaper show, he and Prime Minister Rajoy were friends. Now he is the PP's nemesis.

This has become a war of words, allegations and denials, played out in the Spanish courts, media and the odd press conference (which incidentally are not dynamic, spontaneous affairs).

The prime minister and the PP now say Luis Barcenas is trying to blackmail them.

For his part, Mr Barcenas now says he gave 25,000 euros (£21,600) in cash bonuses to the party's number one, Mr Rajoy, and number two, in 2010 alone.

The allegations, against the prime minister and his party are growing in detail and severity.

Unanswered questions

The affair began when Spain's El Pais newspaper published documents written by Luis Barcenas, which were alleged to be a set of the PP's undeclared, and possibly untaxed, accounts.

At the time Mr Barcenas was in denial. The handwriting was not his, he said.

Luis Barcenas himself faces allegations of money laundering and fraud

He seemed to be loyal to, and in line with, the rest of the party.

However, in recent weeks he has gone full circle, telling journalists and judges that the handwritten documents were his; and passing them a steady stream of allegations, which have subsequently been put into the public domain.

After the El Pais story was published, Luis Barcenas was forced out of the Popular Party.

It seems that the party wanted to cut ties with their former treasurer, who himself faces allegations of money laundering and fraud.

It had emerged that he had 47m euros amassed in bank accounts in Switzerland.

What is clear, is that Luis Barcenas has decided, rightly or wrongly, that if he is going to face allegations of wrongdoing, linked to the finances of the party, others, including the prime minister, should too.

So despite a passionate statement from Mr Rajoy, there remains still more questions than answers over the accounts of the party that currently rules Spain.

The prime minister was acutely aware that those outside of Spain were watching - perhaps investors who have not followed the detail of the scandal, but might be beginning to worry about where it could end.

And that is why he felt it necessary to emphasise that his government was "stable".

He would continue, he said, until the next Spanish general election, due around the end of 2015.

Then the political damage from the allegations might be a bit clearer.

The PP hopes the Spanish economy will, by then, be growing, and unemployment falling, and therefore the impact of the "Barcenas" affair, might not be that severe.