Pain in Spain grows as evictions spark new wave of protests
The fact that several of the banks repossessing homes are receiving state funds has fuelled Spaniards’ anger
On December 2nd, Tarragona city hall in northeastern Spain revealed it was planning to cut off ties with any bank that evicted local people who could not pay their mortgage.
In doing so, it was following a handful of other towns and cities across Spain which have responded in a dramatic way to a deepening evictions crisis.
With deposits of only about €4 million, Tarragona’s threat will not necessarily have caused a great deal of alarm in the financial sector. But the move was only the latest example of mounting political pressure that is making Spain’s lenders the targets of opprobrium as well as the subjects of painful structural reform.
The city’s authorities announced their initiative just days after the European Commission had approved Spain’s plan to restructure its four nationalised banks, giving them access to €37 billion in EU funds.
“The banks receive help . . . and instead of giving out credit, thousands of people are being evicted from their homes,” said Francisco Zapater, a local politician in Tarragona. “There are two million empty homes in Spain and those of us in institutions mustn’t ignore this social reality.”
Most of the threats by town and city halls to stop banking with lenders that follow through on evictions are led by left-leaning parties. This was the case in the northwestern city of Vigo, where the Socialist Party and left-leaning Galician nationalists pushed through an initiative which also prevents local police from helping to enforce repossessions.
Authorities in the cities of Zaragoza, Toledo and Irún have made similar moves.
An estimated 350,000 evictions have taken place in Spain since the economic crisis started to bite in 2008. The collapse of a decade-long property bubble has seen house prices tumble and, as unemployment has soared to 25 per cent, the payment of mortgages – many of them taken on during the boom – has become impossible for more and more Spaniards.
In the meantime, a grass-roots movement seeking to stop evictions and change Spain’s notoriously tough mortgage law has gathered momentum, staging sit-ins at which protesters block the doors of properties due to be repossessed. In many cases this works, with court authorities being unable to deliver the foreclosure notice, thus delaying the process.
And while the number of evictions has continued to rise, the banking sector itself has become mired in crisis as its exposure to the burst property bubble has become increasingly apparent. The fact that several of the banks implementing repossessions are receiving state funds has fuelled Spaniards’ anger at their financial sector.
A wave of suicides in recent weeks by people about to be evicted has put the housing issue firmly at the heart of an already frenzied political agenda. In response, last month, the conservative government of Mariano Rajoy scrambled to present a series of measures that help some of Spain’s more vulnerable homeowners, including the creation of a pool of social housing for those already evicted.