The Spanish Socialist Party was thrown into disarray this weekend when Mr Jose Borrell, its candidate for prime minister, resigned in the wake of a financial scandal in which two of his former aides were accused of tax evasion. While Mr Borrell admitted he and his wife had joined an investment scheme run by his former aides, he claims he did nothing illegal.
The PSOE (Partido Socialista Obrero Espanol) has had great difficulty in finding an effective replacement for the charismatic Mr Felipe Gonzalez, who was prime minister for 13 years. He resigned as party leader two years ago, after narrowly losing the 1996 election to Mr Jose Maria Aznar's centre-right Partido Popular. Mr Borrell's departure leaves the major opposition party virtually rudderless, just a month before regional and European elections, and less than a year before the next general election.
The two men being investigated are former senior tax officials, Mr Jose Maria Huguet and Mr Ernesto de Aguiar, who worked for Mr Borrell in Catalonia when he was Secretary of State at the Treasury Ministry. They have admitted evading tax payments of more than £2 million by transferring the funds to bank accounts in Switzerland.
In his resignation statement last Friday Mr Borrell said that in 1986 he and his then wife - they have since divorced - invested one million pesetas (£5,000) in the Huguet-Aguiar stock market scheme, which was dissolved just over a year later when they received a cheque for 1,120,000 pesetas. At a time when official interest rates were over 16 per cent, the profits involved were hardly a major investment scam.
Corruption at many levels was blamed for the Socialists' defeat in the 1996 election which brought the conservative Popular Party to power, but until Mr Huguet and Mr de Aguiar were accused of corruption Mr Borrell was never under suspicion. He still denies any wrongdoing and said he was resigning because he could not submit the party to any suspicion of corruption.
"I have committed no crime . . . but the strict meaning of legality cannot be a refuge for any doubt about my ethical or moral behaviour. I have done nothing of which I am ashamed."
Mr Borrell was named Socialist Party candidate for prime minister in a controversial and revolutionary primary election only 13 months ago. For the first time in more than 100 years the party's members voted for the candidate to lead the party in general elections, rather than the traditional method whereby the candidate was named by the party congress.
By appointing Mr Borrell they virtually ousted Mr Joaquin Almunia, the man appointed secretary-general of the party after the resignation of Mr Gonzalez in 1997. Since Mr Borrell's appointment, the Socialists have lived under an uncomfortable dual leadership, with Mr Almunia officially running the party and Mr Borrell heading the parliamentary group, and the two not always agreeing on policy.
The appointment of the inflexible and often outspoken Mr Borrell did not please many of the senior party barons who would have preferred the more flexible and amenable Mr Almunia. Clashes between the two men and their supporters have plagued the past year, threatening a split.
While some of them may have welcomed Mr Borrell's downfall, none of them could have wished it less than a month before the June 13th European, autonomous government and municipal elections, with the Socialists facing further losses. Opinion polls show a steady decline in their support, leaving them lagging almost 6 per cent behind the Popular Party.