Corruption in Spain is threatening institutional credibility, said the Council of Europe anti-corruption group (Greco) in its new report.
Citing the numerous corruption scandals in the country and a general lack of public faith in the country's politicians, the group noted that Spain was slipping in the annual ratings issued by Transparency International.
In 2008, the country was among the 20 least corrupt countries in the world. In 2013, however, the country was in position 40.
Greco noted that Spain had already taken some steps towards improving the situation, and cited the country's Transparency Law, passed in November 2013.
This law obliges all public administrations to publish regular updates on objectives and activities, and to publish figures on salaries and compensation, including severance, of top executives.
But Greco also said current arrangements for Spanish MPs and senators regarding "ethical principles and standards of conduct are insufficient".
Both chambers of the Spanish parliament need to bring in rules for issues like the prevention of conflicts of interest and greater disclosure of financial interests, Greco said in its report.
The group also argued that Spain needed to regulate relations between politicians and lobbyists.
A "robust enforcement mechanism to sanction wrongdoing" was also key, according to the Greco report.
Greco also put Spain's "high quality" judicial system under the microscope arguing rules are needed to ensure courts don't become overly political.
While recognizing the hard work done by individual judges in the fight against corruption, the group said the General Council of the Judiciary, which is tasked with appointing and disciplining judges, had to be "free" and "seen to be free of political influence".
Spain will now be required to produce a report on measures adopted to fight corruption by June 2015.
Greco is a Council of Europe body that aims to improve the capacity of its members to fight corruption by monitoring their compliance with anti-corruption standards.
It helps states to identify deficiencies in national anti-corruption policies, prompting the necessary legislative, institutional and practical reforms. Currently it comprises 48 European states and the United States of America.