ANALYSIS: Does Spain’s former king’s tax deal help or harm the monarchy?

ANALYSIS: Does Spain's former king's tax deal help or harm the monarchy?
Spain's former king, Juan Carlos I, agreed a €678,393 settlement. Photo: Martin Bureau/AFP
By settling a back tax bill, Spain's former king, Juan Carlos I, is trying to avoid an embarrassing lawsuit, but he has further dented the image of the monarchy and deepened tensions within the country's leftist coalition government.
His lawyer issued a two-paragraph statement on Wednesday night announcing that Juan Carlos, who fled into self-imposed exile in the United Arab Emirates in August, had “presented the fiscal authorities with a spontaneous
declaration” which “settled” a tax debt amounting to 678,393 euros ($821,453), including interest and fines.
   
The settlement is linked to a probe made public last month by Spain's attorney general into whether the scandal-hit former king used cards linked to accounts not registered in his name — which could constitute a possible money-laundering offence.
 
   
 
Judicial sources said they were looking into funds deposited in several Spanish bank accounts held by a Mexican businessman and a Spanish Air Force official, and whether they had been accessed by the 82-year-old former monarch.
   
The credit card payments took place after Juan Carlos abdicated in 2014, which could mean that he is not shielded by the immunity from prosecution he enjoyed as head of state.
   
It is the first time that Juan Carlos, who is already the target of two other investigations over his financial affairs, has acknowledged having withheld income from the tax office.
   
While the tax settlement reduces the risk of a lawsuit, it does “enormous damage” to the reputation of the monarchy, which was already tarnished by other affairs involving the once-popular former king, said political
consultant Euprepio Padula.
 
 
Royal debate
 
Prosecutors are also examining a Saudi high-speed rail contract that was won by a consortium of Spanish companies in 2011, seeking to establish whether the then-monarch was paid a commission.
   
According to Swiss daily La Tribune, the late Saudi king Abdullah deposited $100 million into a Swiss private bank in 2008 to which Juan Carlos had access, prompting suspicions it was a kickback for the contract which was awarded three years later.
   
Separately, prosecutors at Spain's Supreme Court announced in November that they had opened a preliminary investigation into the former king's business dealings following a report by the national anti-money laundering agency.
   
The prosecutor's office gave no further details.
   
A steady drip of revelations about the former king's love life and lavish lifestyle, combined with the 2018 conviction of his son-in-law for tax fraud and embezzlement, have severely tainted the monarchy.
   
The scandals have fuelled renewed criticism from far-left party Podemos, the junior partner in Socialist Prime Minister Pedro Sanchez's minority coalition government.
   
Podemos leader Pablo Iglesias wrote recently in online newspaper Publico that there was a “growing debate” in Spain “over the usefulness of the monarchy”.
   
The party has governed in coalition with the Socialists since January. It is the first time that an anti-monarchy party is in power since Spain returned to democracy in the 1970s.
 
 'Not in danger'
 
Podemos on Friday once again called for a parliamentary inquiry into the business activities of the former king.
   
These requests have always been rejected in the past with the votes against from the Socialists, and parties on the right which ferociously defend the monarchy.
   
After the former king's tax settlement was announced, Sanchez said during a TV interview that the monarchy “is not in danger”.
   
Political consultant Padula said Juan Carlos' son, the current King Felipe VI, “should make a statement about this topic” to distance himself further from the former monarch.
   
Felipe already put an end to his father's palace allowance of nearly 200,000 euros per year and renounced his own inheritance in March.
   
Now that Juan Carlos has settled his tax bill, Spaniards are wondering if he will return to Spain for Christmas.
   
When asked, Sanchez said it was up to the palace to “comment on the possible return of the former king” who will celebrate his 83rd birthday on January 5.

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