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Spain's prime minister has brushed off demands he should resign after text messages emerged showing him comforting a political party treasurer under investigation over a slush fund and secret Swiss bank accounts.
The spectacle of alleged greed and corruption has enraged Spaniards hurting from austerity and sky high unemployment with no end in sight.
As Mariano Rajoy told reporters he would not step down, former Popular Party treasurer Luis Barcenas testified behind closed doors in Madrid, telling a judge investigating the slush fund allegations that he gave tens of thousands of euros in secret cash payments to Rajoy and party secretary general Maria Delores de Cospedal between 2008 and 2010 while they were key opposition leaders.
Rajoy declined to comment on specifics, while Cospedal slammed Barcenas' declarations as "new slander and lies" from a criminal suspect and said she never received cash payments from him.
Rajoy insisted after meeting with Poland's premier that he will "see out the mandate the Spanish electorate gave me. This is a stable government that is going to fulfil its obligations."
Rajoy, who says neither he nor other party figures received illegal payments, did not deny exchanging text messages with now jailed former Popular Party treasurer Luis Barcenas.
He insisted that the messages demonstrated that the state "was not bowing to blackmail. This is a serious democracy." But the text messages from 2011-2013, some analysts said, appeared to convey a tone of cronyism among two men who talked to each other like buddies.
"Luis, nothing is easy," one message from Rajoy to Barcenas said. "But we are doing what we can. Cheer up."
Analysts are divided over whether the scandal could prompt an early exit for Rajoy, whose conservative party ousted the ruling Socialists in a 2011 landslide giving his party an absolute majority in Parliament and no requirement to call new elections until late 2015.
If Rajoy's position as leader becomes untenable, his party could theoretically decide he needs to go and select someone else as prime minister. It's unlikely that there would be any changes in Spain's tough austerity measures aimed at helping keep the European debt crisis at bay.
But the ever deepening scandal and its twists and turns have shaken Spaniards who saw their country teeter on the edge of a full-blown public finances bailout last year before Rajoy asked for a 100 billion euro ($130 billion) bailout of the country's hurting banks, raised taxes and cut public services all in the name of saving the country from ruin.
