Hullabaloo

Tuesday, March 12, 2013

 
Austeridad

by David Atkins

There's a hero taking Spain by storm, and her name is Ada Colau.

Spanish media have described Colau, a spokeswoman for the Platform of Mortgage Victims, as “the best-known representative of popular indignation” in the country.

Her voice is heard on television or radio most days, and her ability to speak simply and engagingly about the complexities of mortgage finance has given her a loyal following, especially among younger Spaniards.

Supporters insist there is more to the platform (and its most prominent representative) than simple protest: The group has indeed emerged as an effective and influential political force, with the power to sway parliament and dominate headlines.

At the same time, the rise of grass-roots opposition movements such as the Platform is also seen by many as a symptom of Spain’s broader political malaise — exposing the failure of regular opposition parties such as the Socialist Workers’ Party to provide a serious counterweight to the government.

“The party system is completely discredited because the parties don’t respond to current reality,” says Colau.

She accuses both the ruling Popular Party and the Socialists of neglecting the plight of hundreds of thousands of Spaniards who are struggling to pay off their mortgages, and whose homes are now often worth less than their debts.

It is an acutely sensitive issue in Spain, made all the more emotional by an apparent series of suicides by heavily indebted homeowners facing eviction...

In an attempt to force parliament’s hand, the Platform collected more than 1.4 million signatures for a legislative initiative that calls for a deep overhaul of mortgage regulations and an end to Spain’s famously draconian approach to home buyers who fall behind on their payments.

The proposal would make it much harder for banks to evict troubled mortgage-holders. Crucially, it would also prevent banks from demanding full payment of the mortgage once a house was repossessed. This would, in effect, allow heavily indebted homebuyers simply to walk away from their property if they could no longer afford their mortgage.

“It cannot be that the most vulnerable people are made to live with the consequences of their actions until their death, while the big companies take no responsibility and are bailed out with public money,” says Colau.

Spain's mortgage laws are even more abusive than ours, and the nation's relationship with its banking industry is even more cozy and collegial, if possible. But one of Spain's other big problems is that it set up a number of large community banks that took on much of Spain's debt. It's the one major country that does potentially need to fear its bond lords, as many of its bonds are held by its own banks.

So Spain is locking itself into an austerity death whorl because its politicians fear they have little other choice.


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thereisnospoon 3/12/2013 03:14:00 PM