Spain’s mortgage debate turns sour

Yesterday, the conservative premier of the Madrid region, Ignacio González, handed over the keys of a new flat to a man who had been evicted from his home in 2011 for failing to keep up with mortgage payments.

The new property, which will cost its tenant only €150 per month in rent, is part of a new batch of 1,000 publicly subsidised flats for people who have been evicted in Madrid.

It was a timely, albeit ironic, photo opportunity for Mr González. His Partido Popular (PP), which also governs Spain, has become embroiled in a debate about evictions and mortgage legislation which has turned sour and threatened to dominate the country's political agenda.

On the same day the Madrid premier was making his gesture, his party’s deputy leader, María Dolores de Cospedal, launched a stinging attack on a civic movement whose members organise protests outside the homes of PP politicians in order to pressure them to overhaul eviction regulations.

For the second time in three days, Ms Cospedal compared these protests to Hitler’s Germany. “Going round to someone’s house, pointing them out, saying ‘I know where you live’ and carrying out physical or verbal violence against them and the people inside that house is an act of totalitarianism, of Nazism, or fascism,” she said.

The Platform for Mortgage Victims (PAH) organises the demonstrations, which have become known as escraches . The name is taken from Argentine protests which sought to shame individuals who had taken part in the dictatorship's human rights abuses.

In March they started in Spain, always focusing on the home or office of a well-known conservative.

Intimidation
As the escraches have gained more and more attention, so conservative politicians have been increasingly vocal in their condemnation, with some comparing them to the intimidation waged by supporters of Basque terrorist group ETA in its heyday.

PP deputy Esteban González Pons claimed activists banged on the door of his Madrid home and shouted insults when he was inside with his children.

The PAH, which enjoys much public support, insists it is a peaceful movement.

"Spain's problem isn't the escraches , it's the evictions," said Elena Valenciano of the opposition Socialist Party, in response to Ms Cospedal's outburst yesterday. However, the Socialists have been careful not to condone the protests outright, instead arguing for a sweeping mortgage reform.

The rift between left and right widened further last week, when the Socialist government in Andalusia issued a decree allowing certain homes in the region to be expropriated from banks for three years, to protect poor families from eviction. What the PP, the Socialists and the campaigners do agree on is that Spain’s mortgage legislation, which dates back a century, is antiquated and often draconian. An estimated 400,000 evictions have taken place in Spain since its economy hit the buffers in 2008. As the economic crisis drags on, with a jobless rate of over 26 per cent, the mortgages law – and the country’s struggling banks – have become the focus of anger.

Last month, the European Court of Justice ruled that Spain’s eviction regulations were abusive, finally prompting the government to pledge suitable changes. Amid the ongoing political and social furore, a new law is being prepared for congressional approval.

PAH activists want to do away with clauses that mean evictees are often still liable to owe their banks tens of thousands of euro even after losing their home, due to interest, legal fees and a loss in value of the property.

But with Spain’s banks attempting to slim down and European authorities carefully watching the country’s public accounts, the government is wary of taking any step that might further destabilise an already vulnerable economy.