Global Observer

Royalty: Recession-proof no more

Royalty: Recession-proof no more

Posting in Technology

MADRID -- With the king's son-in-law under suspicion of using a non-profit to syphon millions of euros and with the economic crisis, is it time to question the value of having honorary royalty?

King Juan Carlos and his son-in-law Duke of Palma Inaki Urdangarín

MADRID -- Is the crown worth the price of its polish? As controversy surrounds the Spanish royalty, more and more people are questioning if the diplomatic and traditional benefits of funding a royal family still out-weigh the financial burden.

This week, the Spanish royalty is under a microscope, as the husband of Infanta Christina (essentially a princess, the youngest daughter of King Juan Carlos) has been caught at the head of a scandal. Duke of Palma Inaki Urdangarín has been accused of syphoning millions of euros into a a tax haven in Belize through the guise of a non-profit to help disabled children.

Yesterday, the king suspended his son-in-law from performing any royal activity. One of the first initiatives for the elected prime minister Mariano Rajoy, when he officially starts on December 22, will be to investigate Urdangarín's actions. Both of the major political parties--Rajoy's Popular Party and the outgoing Spanish Socialist Party--have spoken in support of the royal family, commending the king on how he has handled the situation.

The question remains: Should Spain even have a royal family?

For a rather new (or renewed) democracy, it was a logical transition for Spain to have reinstated royalty in the eighties.

"Having royalty restored in Spain had a meaningful historical purpose," said Vincente Amoros, a Madrileno financial controller. "The royalty was restored in Spain in 1975, after the death of General Franco, the dictator who had ruled Spain for 36 years. It made sense, therefore, to have the royals back as the transition required that sort of neutral institutional figure who acted as a guarantee of stability in the process."

It is no secret that King Juan Carlos is a beloved symbolic leader. After General Franco died, Spain was in a period of transition and turmoil. Seven years after Franco's death, in 1981, an attempted military coup d'état took place. The king was the one to intervene and speak on behalf of democracy. King Juan Carlos is also known as an important diplomatic figure, especially for his strong friendship with Spain's neighbor Morocco and its royal family.

This month's controversy does not seem to be enough for the Spanish to abandon their support of their royal family.

"We have gotten used to them, so I would not get rid of the monarchy just because one of their in-laws is alleged to have evaded tax," Amoros said. The Urdangarín scandal "is as if a football player was found to have stolen a car and we decided to ban football matches as a result."

Royalty in general is under continual scrutiny as an unnecessary cost to democratic nations. However, the European public seems to remain defensive of their royals.

"Royalty in Britain have their own money. Public money is only spent on official matters pertaining to promotion of The United Kingdom. For example Will and Kate's wedding was a private not a state wedding and was paid for by family. Only stuff like security for foreign guests and the public was paid for by the state," said Lewis Cooper, a Londoner who has been teaching in Madrid for five years now. "The UK royal household has been very aware over the past few years of being very transparent on spendature. After the death of Diana and the subsequent fall-out, the list of people in the royal household--therefore those who receive money from the state--was severely slashed."

Cooper also mentioned the controversy of the royal yacht Britannia, which was decommissioned due to its inordinate cost. "Ever since, they have been very up on austerity and being seen not to waste public money," Cooper said.

The wedding of Prince Felipe

The public cost of Kate and William's wedding was reportedly around 20 million pounds. However, the wedding was broadly perceived as an economic stimulus that brought millions of tourists and pounds to England's capital.

The question of the value of royalty versus its cost is a constant question in Spain. It was brought up in 2004 during the lavish wedding of Prince Felipe and it has been of constant debate since the crisis began in 2008.

The lavish Spanish royal wedding of Crown Prince Felipe and journalist Letizia was held two months after the 2004 Atocha bombings, necessitating an extremely high level of security, with 18,000 members of police and military on staff costing about $29 million. Safety was not a factor, however, in the over a million dollars worth of flowers that decorated the cathedral.

Spanish royalty is different from British because there is not a real distinction between royal and state money, as the budget for the Casa Real comes from taxes. This costs the Spanish people about 8 million euros per year.

It does not look like the Spanish will change its collective opinion about the Borbon royal family any time soon. Only time will tell when Felipe eventually becomes king.

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Jennifer Riggins

Correspondent (Barcelona)

Jennifer Riggins is the content manager and community builder for two SaaS Quote Roller and PandaDoc, as well as she teaches sales, English, and public speaking for Spanish small business. She holds a degree from William Paterson University. She is based in Spain. Follow her on Twitter. Disclosure