Although in recent days the fiscal crisis in Greece has been the focus of the world’s Eurozone concerns the situation in Spain is no less alarming, with Prime Minister Mariano Rajoy still dodging a request for a much needed bailout.
And on top of the worrying unemployment figure (which currently stands at 25% of the population) it has recently been estimated that 350,000 Spanish families have been made homeless through the financial crisis.
In the early 2000’s real estate was the driving force behind the booming Spanish economy. Home prices soared higher and higher and banks were more than willing to grant mortgages to individuals without savings and with low incomes.
Then, after years of rising prices the Spanish property market went bust back in 2008. Once housing prices began to fall their decline was rapid, the values of existing homes plummeted, thousands of new homes were left unsold and the Spanish financial crisis spun out of control.
As one Spanish home owner stated: ‘I worked at construction sites and my wife had no regular income, but the bank did not hesitate to give us a mortgage of 270,000 Euros. I have not had work for two and a half years, and can no longer pay the mortgage. I cannot sleep at night for fear that I will soon be homeless.’
It is a fear many people are now facing. Since the collapse of the property market Spanish mortgage legislation – in which mortgage holders are held liable for the total amount of their loan – has left hundreds of thousands of people unable to hold on to their homes.
Unsurprisingly many stand in opposition to the present legislation.
Juliane Kokott, the advocate general of the European Court of Justice, asserted that the current eviction rules act in violation of consumer protection rules. Meanwhile, in recent months an organisation called Platform for Mortgage Victims has been lending support to those affected, hosting demonstrations and campaigning to get the situation changed.
For some people any change achieved will have come too late. Three days ago a 53 year old resident of Northern Spain jumped to her death rather than face losing her flat. The woman plummeted four-stories just as local officials arrived to enforce her eviction. Other reports have revealed that a man from Granada also killed himself just before his house was due to be repossessed.
In light of these recent incidents something is finally being done to help those in need. The Spanish banking association AEB announced that Spanish Banks will be suspending evictions for vulnerable people for the next two years.
What parameters will be used to class people as ‘vulnerable’ has not yet been revealed.
The Spanish government will soon be meeting with the opposition in order to create new eviction regulations.
As of 14:18 pm
The Pound to Euro exchange rate is currently trading at 1.2480
The Pound to US Dollar exchange rate is currently trading at 1.5875
The Pound to Australian Dollar exchange rate is currently trading at 1.5215
The Euro to US Dollar exchange rate is currently trading at 1.2718
The Euro to Pound exchange rate is currently trading at 0.8011
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