Government puts more bite into transparency legislation

The draft transparency law approved by the Cabinet on Friday will be tougher on elected officials who falsify public accounts. Under the new legislation, they could face one to four years in jail if convicted.

Deputy Prime Minister Soraya Sáenz de Santamaría said that existing legislation is getting stricter after the government reviewed reports by the State Council and the General Council of the Judiciary (CGPJ), the legal watchdog.

The transparency law has become "more rigorous and forceful," said Sáenz de Santamaría. The original draft only contemplated slapping guilty officials with a fine and barring them from office for up to 10 years. But on recommendations, the executive wants to modify the Penal Code to introduce jail terms when there is economic damage to the administration.

The news agency said that these plans were discussed at Tuesday's meeting between Economy Minister Luis de Guindos and his German counterpart Wolfgang Schäuble in Berlin. "De Guindos was talking about 300 billion euros for a full program, but Germany was not comfortable with the idea of a bailout now," Reuters quoted a top euro zone official as saying.

There is growing concern that when it comes to using the word "bailout" Madrid and Brussels seem to be talking apples and oranges. When asked what the government terms as a full EU rescue plan for Spain, Sáenz de Santamaría said she wasn't going to define it because the option is not on the books. "I am not going to enter into the dynamics of what is and what isn't a bailout. What I am telling you is that rescue option has been ruled out," she said.

Rajoy administration sources said that Spain is working alongside Italy, France and Germany behind the scenes to pressure the European Central Bank (ECB) to purchase debt on the secondary markets to bring down the country's high borrowing costs. At the moment, the ECB hasn't given in but the sources are confident the ECB will step in at the last minute to avoid a Spanish bailout.