Whether its banks are rescued by the ECB or not, Spain will remain in crisis. The situation is likely to become even worse under the ruling of the current right wing government of Mariano Rajoy who seems unable to move beyond the neoliberal political principles of the FAES (principios politicos fundación FAES), the right wing think tank of the “Partido Popular” chaired by José María Aznar, former president of Spain from 1996 to 2004.
One New York Times headline of November, 15 2012 was “Spain: New Rules Limit Evictions” in which the author correctly says that Spanish judges have issued 350.000 evictions since the start of the crisis. This figure means that between 1.5 and 2 million people have been evicted, which represents about 3 – 4% of the total Spanish population.
Let’s see what this crisis means exactly for the Spanish population and compare the different solutions offered by the government on one hand and by citizens’ organizations on the other.
The Current Situation
While I’m writing, more than 26% of the workforce is currently unemployed, 22% of Spanish households are living under the poverty threshold and 25% of the population is threatened by social exclusion. There have been 350.000 evictions since the beginning of the crisis in 2007 and 532 foreclosures are currently taking place per day. What these statistics fail to mention are the terrible psychological effects of hopelessness on the people of Spain, as many fear for the future and can see no solution to the crisis.
1909 Spanish Mortgage Law
It seems an old Spanish 1909 mortgage law gives financial companies the right to kick a family out of its home and then demand the remaining debt. It is probably quite difficult to understand if you are not familiar with the Spanish legal system, so let me explain how it works.
When you find that you can no longer cover payments on your mortgage, your first experience of the foreclosure process is to be contacted by a bank employee (by phone if you are lucky or merely by answerphone message if not) who will reprimand you for being a ‘delinquent debtor’. After a few months to a year, when a judge finally decides how much you owe to the bank, your house is sold by auction. However, the only party interested in acquiring your house is the very same bank which, according to the 1909 Mortgage Law, will pay only 60% of its value.
So, can you imagine the consequences? Let me give you an example.
Imagine you owe €80.000 to the finance company. You can’t pay so a judge decides to sell your house valued at €100.000 by auction. You might think, “Fine, I can pay what I owe”. Wrong. The finance company will go to the auction and will most probably pay only 60% of the value, i.e. €60.000. This leaves €20.000 of unpaid debt and this is what you will have to pay plus administrative expenses plus interest, so you may in fact end up owing €40-50.000 to the finance company.
This is what has happened to 350.000 families since the beginning of the crisis, and this is what more than one million people are currently facing in Spain.
How the world sees it
On August, 10th 2012 the UN published a report entitled “on adequate housing” (On adequate housing) by Mrs. Raquel Rolnik, UN Special Rapporteur. In this report, it is interesting to see how she singles out Spain, amongst other countries such as the US and Ireland, for having a particularly harsh housing policy. Rolnik says that Spanish governments have never genuinely attempted to reform the housing policy in favour of the population, in spite of article 47 of the Spanish Constitution which explicitly states that “all Spaniards have the right to enjoy decent and adequate housing”. Instead, Spanish governments of both the right and the left have always pursued a housing policy which favors the elites and the financial and industrial corporations.
On November 8, 2012, the advocate general of the European Court of Justice, Julianne Kokott, declared that “the Spanish regulation is “incompatible” with the European Directive 93/13 on unfair contract terms”. As of now, some judges have announced they won't continue with the current foreclosure cases until the Spanish legal system is reformed and made compatible with the European consumer rights directive 93/13.
Morality and legitimacy
One wonders what kind of moral legitimacy a government has when it is responsible for administering a system in which entire families including old people, kids and disabled people are being kicked out of their homes and plunged into unpayable debt. Should not a government provide for its people? Should it not protect its citizens?
Article 47 of the 1978 Spanish Constitution was created to give the Spanish people the right to enjoy decent and adequate housing. It echoes Article 25 of the Universal Declaration of Human Rights which says, “Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control.”
Whatever ministers and politicians might say, clearly the Spanish government has the power and the capacity to change the current housing laws. Who, after all, is responsible for applying the Spanish Constitution? Or, one wonders, is the Spanish Government actually proud of deliberately contravening the Universal Declaration of Human Rights and its own constitution?
What else is institutionally needed to stop this disaster?
Government versus citizens
On March 9, 2012, the current Minister of the Economy (and the 2006-2008 advisor for Lehman Brothers in Europe and director of its subsidiary bank in Spain and Portugal), Luis De Guindos, launched a “Code of good practice” appealing to the good will of the financial companies to stop evicting people in the most precarious situations. Despite his presumably close familiarity with the nature of financial corporations, De Guindos seems to have rather overestimated their capacity for “good will” towards people of flesh and blood. Surely it speaks volumes that, contrary to the “code of good practice”, evictions actually increased from 517 to 532 per day between March and November.
In November 2012, following the protests and complaints of citizens organizations, police unions, judges and lawyers associations and the media publication of several cases of suicides, the government launched a second decree to stop evictions of (again) people in the most precarious situations. However, what Mariano Rajoy's government doesn't take into account in this decree is the large majority of the affected people. Almost all people who have suffered eviction can be said to be in a ‘precarious situation’, but their situations are not deemed to be precarious enough to benefit from the decree’s protection. For example, none of the suicides investigated by the media were in ‘precarious’ enough situations to have taken recourse to this decree.
What are the solutions needed?
Since 2007, a group of Barcelona citizens started the Plataforma de Personas Afectadas por la Hipoteca (Platform for Mortgage Victims). In 2012, this organization spread all around the country. The purpose of this platform is to help people with information, skills, confidence and support make visible the situation in Spain and around the world. In the short term, the aim is to ask the government to vote in a law to stop evictions, to eliminate any debt once the house is handed over to the bank and to establish a social rent according to incomes.
The existence of this platform has shown how important public pressure is and how efficient it can be when people organize. All of the little changes introduced by the government have happened as a result of public pressures. The government of Mariano Rajoy seems unable to react constructively to the crisis and the workable solutions that have been put forward have come from grassroots organizations like the Plataforma. Hope only exists when you have real alternatives that you know are possible to achieve. And that is precisely what the Platform for Mortgage Victims is providing Spanish people with: real short term ALTERNATIVES.
There's no other way to find a socially just solution to the housing crisis: people must react to the crisis together and organize in order to influence the political process. I've just shown you some ways in which they have started to have success.
Article 47 of the Spanish Constitution states: "All Spaniards have the right to enjoy decent and adequate housing. The public authorities shall promote the necessary conditions and establish appropriate standards in order to make this right effective, regulating land use in accordance with the general interest in order to prevent speculation. The community shall have a share in the benefits accruing from the town-planning policies of public bodies".
http://www.diariovasco.com/20121026/mas-actualidad/sociedad/nueve-personas-suicidan-cada-201210261241.html this article explains the conclusion of the Psychiatric National Congress which took place in September 25th-28th 2012 in Bilbao. One third of the suicides are caused directly by the crisis.