Spanish region at odds with EU over efforts to alleviate evictions crisis

Andalusia allows some homes to be expropriated from banks for three years

New figures released in Spain highlight the extent of its home repossessions crisis but the EU is worried that dramatic attempts to tackle the problem could destabilise the country's financial sector.

The eviction of families and individuals from their homes due to failure to make mortgage payments has become one of the most visible symptoms of the economic crisis, due to Spain’s strict foreclosure laws and a deep recession.

There were at least 32,500 evictions from homes in 2012, according to figures released yesterday by the Bank of Spain.

Several suicides of people due to be evicted and a grass-roots campaign have focused attention on the issue in recent months.

Decree in Andalusia
In April, the Socialist-led government of Andalusia, one of the regions worst hit by the recession with a jobless rate of 37 per cent, issued a decree that sought to ease the pressure on those struggling to make payments.

The decree allows certain homes in the region to be expropriated from banks for three years, to protect poor families from eviction. It also establishes fines for banks that fail to put empty homes on the rental market.

Some other regions have announced similar actions.

In response, the European Commission has warned the Spanish government that such measures are not compatible with the country's commitments related to EU funding.

According to news agency Efe, the commission has written to the economy ministry requesting more information on the anti-eviction measures taken by Andalusia and other regions. The letter also reportedly underlines how such initiatives could undermine Spain’s efforts to stabilise its banking industry.

Spain has received €41 billion of a €100 billion EU bailout for its struggling banks. In return, the country is having to reform its financial system, ensuring the most vulnerable lenders streamline their operations.

The conservative Spanish government is finding itself in an increasingly difficult position, with Brussels wanting it to keep a tight rein on the banks on the one hand, and domestic pressure to ease the plight of poor families on the other.

“I don’t understand this lack of sensitivity, if this is what Europe is about, then Europe’s not worth it,” said José Antonio Griñán, the Andalusian regional premier.