Madrid, Spain–Thousands of people marched yet again down the main avenues of Madrid on Saturday evening, February 16, 2013. As the protestors turned from the grand Paseo de Recoletos into the more narrow confines of the Gran Via, their chant of “Si Se Puede!” boomed off the buildings in such a way as to make a believer out of you.
The marchers are on the verge of a major political victory. The previous Tuesday, February 12th, Spain’s ruling Popular Party with one of the strongest parliamentary majorities in Europe reversed its position and accepted the marchers’ national legislative initiative, the Initiativa Legislativa Popular (ILP), for consideration by the National Congress.
The ILP is a direct challenge to Spain’s one hundred and three year old mortgage law, said to be one of the most restrictive in Europe. The initiative calls for a moratorium on housing evictions (Desahucious), the elimination of the obligation to pay the mortgage debt after the person has been evicted (dacion en pago retroactiva) and the use of foreclosed homes for public rental housing.
What changed the minds of the ruling Popular Party so that they accepted this Initiative for consideration?
The Popular Party, headed by Prime Minister Mariano Rajoy, came to power in the November 2011 elections crushing the discredited Spanish Socialist Workers Party (PSOE) and winning an absolute majority of 186 seats out of 350 in the Congreso de Diputados. Prime Minister Rajoy’s orientation is reflected in appointment of Luis de Guindos as Minister of the Economy and Competitiveness. Luis de Guindos was the Director of Lehman Brothers for Spain and Portugal from 2004 until its collapse in 2008 that initiated the global financial crisis. Rajoy also appointed Rodrigo Rato, former Managing Director of the IMF, to head Bankia. Bankia is the largest Spanish financial institution to receive state bailout funds, 8 billion euros, and the largest landowner in Spain with 11 billion euros in property. Bloomberg Business news called Rato the worst CEO of 2012. Rato resigned in May 2012 and is under investigation for accounting irregularities, as is most of his Board of Directors.
Given the Popular Party’s orientation and its previous governments, one would think the Party would just focus on its policies of bailing out the banks, privatizing public services like health care, changing labor laws to promote worker “flexibility”, ruling by royal decree and waving the Spanish flag rather than accepting for debate a popular initiative from a non-affiliated social movement.
“It was a perfect storm of coincidences that hit the PP after it took power,” said Sophie Gonick, when I asked her to explain the PP’s acceptance of the Initiative.
Sophie Gonick is an American Ph.D. student writing her dissertation on the movement to stop evictions in Madrid. She is looking particularly at the role of the Ecuadorian and Moroccan immigrant communities in the construction of this movement.
“There’s the continuing exposure of possible political corruption in the party’s leadership in the midst of a severe economic crisis. Then there’s the severity of the foreclosure crisis itself and the on-going suicides by those being evicted. Then, of course, there’s the solid organizing of the Plataforma de Afectados por la Hipoteca (PAH). Finally, the party was already backing another initiative to overcome any regional bans on bull-fighting. All of this made for a perfect storm,” she explained.
There’s little doubt that social movements detached from the levers of state power have to be in place to take advantage of political crises. The PAH has been organizing and “getting into place” since February of 2009 when it began in the Catalan city of Barcelona. Loosely translated as the movement of mortgage victims, PAH first focused on the problem that all home loans in Spain are recourse loans, this means, unlike in the State of Washington, you owe the full amount whether you have been foreclosed and evicted regardless of whether the bank has sold the foreclosed house or not. Plus, in Spain, the bank can take your wages.
As the economic crisis deepened and foreclosures increased, the PAH expanded its concerns beyond the recourse problem.
Just like in the US, the economic crisis in Spain began with the bursting of the housing bubble in 2007-2008. While consistent figures are hard to come by, the picture is something like this: since 2007, home prices have fallen 33%. A quarter of all mortgage holders are in a negative position, owing more than their home is worth. About 500,000 people have lost their homes due to repossession by banks and the rate of evictions is estimated at 500/day. This also means that about 20% of Spain’s housing stock or 5.6 million dwellings are empty due to bank seizure or failure to sell.
All of this is happening at the same time as Spanish workers suffer from the highest unemployment rate in Europe at 26%. That is 5.9 million workers. Spanish youth under 25 years old have an unemployment rate of 57.6%. The Spanish people have the highest private debt ratio to personal disposable income (112.7%) in the OECD countries.
In November 2010, a little less than two years after they began to organize, the PAH expanded their organizing to include putting a moratorium on evictions and turning the foreclosed or empty housing stock into publicly owned rentals. Their organizing got a considerable boost when protesters against bank bailouts and political corruption, known as “Indignados”, began a series of plaza occupations on May 15, 2011 that eventually led to the 70 neighborhood “Asambleas” that now meet on a regular basis in the Madrid region.
The PAH then took advantage of Spain’s national initiative process that allows a petition with at least 500,000 signatures to be presented to Congress. The PAH collected 1.5 million signatures on its proposal. This was the proposal accepted by the Popular Party on Tuesday, February 12th.
Nevertheless, despite the fact that a national poll said 87% of the Spanish people thought the Party’s acceptance of this initiative for debate a good idea, the PAH organizing is only one part of Sophie’s “perfect storm.”
Making money in the Spanish housing bubble meant several things. First, bank lending increases from 100 billion in 2000 to 600 billion euros worth of mortgages by 2012. Second, one of the early targets for sub-prime loans was the immigrant community. Third, you securitize the loan, get it rated triple A and sell it on the avaricious global market while attracting more credit from French and German banks. Finally, all this depends on more land for the expanding housing market.
Just as in the United States, the “land turnover function” is at the local governmental level and, here in Spain, it is also at the regional level. And, while we in the U.S. call the process of real estate interests using government for profit-taking “campaign contributions,” or “lobbying” or acting in a “business-like manner,” here in Spain they call it corruption.
Since the bubble burst in 2007, over 300 politicians across party affiliations have been indicted or charged with corruption, primarily related to land turn over and housing construction. In late January, 2013, the case of former Popular Party Treasurer Luis Barcenas hit the news again with Swiss authorities certifying that Barcenas has an account with 22 million euros in it. This was followed up by the largest national daily, El Pais, turning over to authorities “Barcenas secret papers” showing a decade long series of regular and possibly illegal payments to Popular Party officials, including the current Prime Minister. Party officials denied any connection to Barcenas who had resigned his position in 2009. But on Thursday, February 21st, it was revealed that Barcenas had remained on the Party payroll until the end of 2012.
In addition to this, the activities of the indicted business group run by Francisco Correa, known as Gurtel, continue to show large under the table payments to city officials in jurisdictions controlled by the Popular Party. Lavish expenditures and unexplained income is one thing when the economy is booming and people are politically asleep, but when people have neither a job nor a home, they tend to get irritated or, here in Spain, indignado. Within several days of these latest revelations, one million Spaniards signed an on-line petition calling for the government’s resignation.
But, that is not all. There are the suicides. On Sunday, the 17th, the day after the PAH march, I was walking on the Puerta del Sol Plaza when I saw three young men holding a makeshift banner. It read: Art 143.1 Codigo Penal: “El que induzca al suicidio de otro sera´ castigado con la pena de cuatro a ocho años.” The recent suicides by people faced with evictions have led to banners like this one and chants of “asesino!” in the protest marches.
The suicides even shocked the Popular Party into action last year. In early November 2011, after a second person had committed suicide, the Party’s Deputy Prime Minister announced a two year eviction moratorium for “vulnerable” families, but the characteristics required to fit the definition of “vulnerable” rendered the moratorium almost meaningless. It also did not stop the suicides.
During the week the PAH presented its initiative to Congress, there were four more eviction related suicides. Between February 11th and February 14th, a couple in Majorca overdosed on drugs, a man hanged himself in Alicante and there was another suicide in Basuri Vizcaya.
Whether the perfect storm of popular mobilization, political corruption scandals and eviction related suicides will be enough of a political crisis to ensure the actual passage of the PAH’s Initiative remains to be seen.
The Spanish banks are still in a precarious position and the European Central Bank has promised to buy Spanish government debt. European lenders, however, have a 110 billion euro exposure to Spanish banks and they want their money back. The Prime Minister, in his national state of the nation address to Congress on Wednesday the 20th, said his focus is on incentives to entrepreneurs and that he does not favor stopping evictions or changing the recourse only mortgage law.
Nevertheless, the perfect storm is still building. There is a massive march scheduled this Saturday, the 23rd, in Madrid to protest the privatization of the public sector. The Spanish judiciary is on strike demanding more resources to investigate political corruption. The flag of the 2nd Spanish Republic is in the streets encouraging Spaniards to learn a history denied them in this constitutional monarchy with a parliamentary addendum.
Still, there is the question of state power. The Popular Party has it and the social movements do not. With the beginning of the World Social Forum in 2001, social movements have organized everything except political parties. Perhaps here in Spain the people can create the right mix between the confederations of unions and popular assemblies and the political vehicle that can implement the visions of social movements like the PAH.
Dan Leahy, defender of Olympia’s Westside, is currently wandering Europe as a foreign correspondent for Works In Progress.