Spain turns spotlight on royals’ finances

Spain’s embattled royal family has agreed to open its affairs to more public scrutiny under a transparency law intended to restore confidence in an establishment undermined by corruption and a deep economic crisis.

Two days after King Juan Carlos’s daughter was charged in an embezzlement case, a palace source yesterday said that the royal household had, after two months of negotiation with ministers, accepted that it should be subject to the new freedom-of-information legislation, along with other organs of the state.

The move reflects the royal family’s concern about retaining its influence in its largely figurehead role as scandals erode its popularity among Spaniards stricken with economic malaise.

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The 75-year-old king, born in exile but recalled to succeed the dictator Francisco Franco as head of state in the 1970s, once enjoyed huge popularity as a constitutional monarch, not least after he helped quash a military coup in 1981.

However, talk of his extravagance – notably when he took off on an elephant hunt in Africa last year as the government pleaded for indulgence from international creditors – as well as the case against his daughter and son-in-law have strengthened calls for his abdication in favour of his son Prince Felipe. For the time being, few Spaniards want a return to a republican constitution.

Prime minister Mariano Rajoy, whose centre-right People’s Party is also embroiled in a number of corruption scandals, has sent a bill to parliament to bring in a transparency law that would give the public a right of access to official documents.

New rules could give the public more right to monitor how much the government grants to the royal family for its official functions. Unlike Queen Elizabeth II who has vast personal wealth accumulated over the centuries, Spain’s Bourbon royals lost much of their property when forced to flee the country in 1931.

The constitution establishes an annual allowance for the royal household, which employs some 500 people. Last year, the allowance was €8.26 million (£7m), down seven per cent since 2010.

Out of the larger stipend, the King in 2011 reported pre-tax personal earnings of some €300,000 while the crown prince had around €150,000. Queen Sofia and her two daughters had expense accounts of some €375,000.

On Wednesday, an examining magistrate charged Juan Carlos’s younger daughter, Princess Cristina, with aiding and abetting her husband, a former athlete who is charged with a number of crimes in a €6m corruption case.

The transparency bill proposes tighter regulation of tax declarations, assets and activities of public employees, rules for lobbying activities, harsher punishments for corruption, and more thorough audits of foundations, labour unions and business chambers that receive public funding.

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Under the proposed law, funds that government ministries provide to the royal family for specific public services would already have come under greater scrutiny even if the palace had not opted in.

However, opposition parties in Spain had been pushing to include the monarchy in the transparency law so that it would be treated as any other public institution and so that a wider, discretionary budget it receives in addition to the annual allowance could get more scrutiny.

Domestic critics of current arrangements note that Spain is the only country in Europe, besides Belarus, which does not have a freedom-of-information, or transparency, law.