Spaniards Take On the Banks
ON SEPTEMBER 6, AS SPANISH Prime Minister Mariano Rajoy met in his office with German Chancellor Angela Merkel to negotiate the terms for a financial bailout of Spain’s wretched economy, across town about 100 people formed a human wall at the entrance of a modest apartment building in the Madrid suburb of Alcorcón. They were blocking three court employees from entering the building to enforce an order issued about 500 times in Spain every day: the eviction of a family after a home repossession.
Up on the fourth floor, Lucía Intrago sat nervously in her bare apartment with two of her neighbors. The forty-four-year-old Ecuadorian mother of two, who earns her living cleaning houses, had lost her home after her husband, Franklin, was laid off from his construction job and the family defaulted on their mortgage payments. They received notice of their home’s repossession, followed by a court order to vacate.
“We tried to convince the bank to let us pay less until my husband found work but they refused,” Intrago explained as she glanced anxiously at the rowdy street below. “Now he has found work, but they say it is too late. My kids are very upset. We had to take my eldest son to hospital last week with an anxiety attack.”
The Intragos had tried to find an affordable rental, but landlords were put off by their ruined credit rating. Then they heard about a local association that helped families facing eviction. It was one of the many popular assemblies born out of the Indignado 15-M movement that last year occupied Spain’s main squares and helped inspire Occupy Wall Street. “I went to a meeting with the assembly’s housing commission and explained my situation,” Lucía recalled. “They sent a lawyer to help us negotiate with the bank.”
The eviction was an urgent matter, but even worse was the debt that the family would face for decades to come. Although the Intragos had already paid $98,000 of a $323,000 mortgage, the bank demanded an additional $405,000, even after taking back the apartment.
“The family has to pay interest, late fees, and compensation for a lower property value,” said attorney Manuel San Pastor, who volunteers for 15-M and the Platform of People Affected by Mortgages and has intervened in about thirty home repossessions and evictions. “Not only do they lose their home; they are also saddled with debt for life.”
San Pastor said that despite many attempts to negotiate a cancellation of the debt and an agreement to let the Intragos stay as renters, “the branch manager and the bank’s legal department refused to speak with us.”
The Intrago case is not unique. Under Spanish law, banks have the right to claim full payment of debt even after repossessing the property, including the difference in value—which in some cases can be as much as 40 percent due to falling prices.
“The banks go after them like sharks: As soon as people find employment they garnish their wages,” says Vicente Perez, spokesperson for the Platform in Madrid, whose “Stop Evictions” campaign has successfully intervened in more than 100 repossessions in the region. “They seize homes that other family members put up as collateral. The family’s credit is ruined; they cannot get loans, pay anything with credit, or even rent. They live on the margins of the economy.”
As the Rajoy government negotiates conditions with the EU for the 100 billion euro bailout of Spain’s banking system, rotten to the core due to its reckless lending practices during the housing bubble, 15-M and other social movements are asking that banks turn part of the millions of empty properties they amassed through repossessions and debt swaps into affordable rentals. About 5.6 million homes, 20 percent of the total, remain empty in Spain either because they have not been sold or because they were seized by banks.
Some 15-M members have sued former IMF director Rodrigo Rato for his role, as the head of Bankia, in the mismanagement that led to the recent public bailout of the banking giant—which is responsible for 80 percent of home repossessions in Madrid. After an investigation, Rato was indicted in July.
In addition, the movement is gathering half a million signatures seeking a change in Spanish debt laws so that families like the Intragos can hand over the keys and walk away from mortgage debt. “This issue is key in Spain because so many millions of people are affected,” says Ada Colau, co-founder of the Platform of People Affected by Mortgages, who heads the legislative initiative. “When we started our group in 2009, no one knew how unjust and scandalously pro-bank these laws were. Now, even legal associations are calling for a change.”
Colau, who lives in Barcelona, says that the 15-M effect has been key for the Platform. In fact, one of the first concrete actions by 15-M late last summer in Madrid, as the movement folded its tents and retreated from the capital’s central square, was to stop the eviction of an immigrant family.
“The movement found concrete problems and objectives to focus on and literally made the Platform theirs,” says Colau, who co-authored the recent book Mortgaged Lives. “At the same time, 15-M has allowed us to expand into local communities across the country and multiply the number of evictions we can stop daily.”
Colau says with so many repossessions taking place, her group works to stop evictions and to change existing laws. For families forced out on the street with nowhere to go, the Platform has occupied four bank-owned empty buildings in the Barcelona region.
“The families self-pay a monthly rental, which varies according to their finances and which they deposit in a special account,” says Colau. “The idea is to let banks know that they are not squatting for the hell of it, that these families are willing to pay rent on a space that would otherwise remain empty.”
Colau recalls that when she began reaching out to families, they felt ashamed and blamed themselves. “They suffered from very high rates of depression, alcoholism, and domestic violence,” she says. “Now at least they see that they are not alone and that what is happening to them is not their fault.”
With Spain’s unemployment rate at a whopping 25 percent and expected to reach 30 percent, home repossessions are just one of the many effects of the economic crisis, which has pushed millions of working and middle class families into poverty and left one out of every two young persons out of work.
To make matters worse, Rajoy’s conservative government, under increasing pressure from Germany, the International Monetary Fund, and the European Central Bank, has slashed public spending on health, education, housing, culture, infrastructure, and aid to the poor and the disabled. Public confidence in the elected leadership is at an all-time low; at the helm of the Spanish economy is Finance Minister Luis de Guindos, who headed Lehman Brothers in Spain and Portugal when the global banking firm collapsed in 2008.
Hunger is on the rise. Colau noticed that several children of families facing eviction were close to fainting during a recent assembly. “They had hardly eaten all day,” she says. Food banks, whose existence is threatened by the EU’s decision to cut off funding, are having trouble keeping up with demand.
This summer, farm union leader Juan Manuel Sanchez Gordillo became Spain’s Robin Hood when he and a group of jobless farmworkers began a campaign of “repossessing” food from supermarket chains, carting off food for the poor while denouncing the chains’ wasteful practice of dumping excess products instead of donating them to the hungry. The groups also occupied a military compound and a palace belonging to a major landowning family.
“The situation in Spain is both dramatic and unprecedented,” says Nacho Murgui, a longtime Madrid community activist, hip-hop artist, and president of the Federation of Neighborhood Associations in Madrid. “This is the first time that the government is carrying out a full-fledged dismantlement of the social welfare state. At the same time, it privatizes almost every public service and uses public money to bail out banks. They have literally broken every social pact reached in the past forty years. And there is no end in sight.”
Spaniards are pushing back, filling the streets with tides of color: green T-shirts for public school teachers and students, blue for health care workers, black for the coal miners.
On September 25, two days before the Spanish government unveiled its 2013 budget loaded with additional spending cuts, thousands of people surrounded the parliament. Riot police charged against the peaceful crowd with batons and rubber bullets; more than sixty were injured and thirty-five people were arrested and charged with crimes against the nation. Unfazed, the demonstrators returned the following day.
“We will be here until our voices are heard,” said Celestino Sánchez, a spokesperson for protest organizers, as he stood by the police cordon in front of parliament. “The politicians in that building don’t represent us.”
Thousands of doctors and other health care workers in the public sector have declared themselves conscientious objectors against a new law refusing care to undocumented immigrants. Public transportation workers went on strike at the peak of the holiday season. All in all, millions of people have taken to the streets in the past few months.
Murgui believes that the 15-M movement has made this magnitude of protest possible. “While at first 15-M attracted mostly young students, with the deepening crisis the movement has crossed over to include the working class, immigrants, retirees, older professionals,” he says. “Before 15-M, we were lucky to get a few thousands to a demonstration. Now, millions are coming out together from different sectors of society: You see college kids and miners arm in arm.”
Social transformation in Spain is taking place mostly at the community level through the thousands of issue-specific assemblies born of the 15-M movement. Time banks, which are basically barter exchanges, have proliferated in Spain thanks to the 15-M effect. Community organizations, including the squatter movement, have strengthened.
However, Murgui thinks that more needs to be done. “We cannot affect the decisions made by European political institutions from the outside only,” he says. “They are too powerful. Last year during the occupations, people thought that the revolution was around the corner, but now they see that it takes time and that there have to be multiple strategies in place.”
In front of the Intrago home, police stand watch as the demonstration grows louder and the court employees look around uncomfortably. “I know this family well, they are good, hard-working people,” says Ana Aguagallo, whose son goes to school with the Intrago children. “My boy is terrified. He asks us if the same thing will happen to us.” Nearby, a group of retirees frets over the family’s fate. “How do the banks expect people to pay if there is no work?” yells an elderly woman.
San Pastor, the 15-M attorney, tries to negotiate with the court lawyer, along with a volunteer psychologist. They produce documents the bank refuses to review showing that the family had found work, that the children were enrolled in the local school, that the eldest son was in therapy because of the imminent eviction.
“What will you do, leave them on the street tonight?” San Pastor pleads. “They need time to find somewhere to go. Please talk to the bank. Maybe they will listen to you.”
The court lawyer calls the bank from her cell phone. The bank’s response: no negotiation.
But the three court workers are not about to shove their way through the wall of chanting neighbors, arms locked together. They seem sympathetic to the situation and after reviewing the documents, they agree to postpone the eviction.
The crowd erupts in cheers.
Relieved, Lucía Intrago comes downstairs and signs a hastily drafted document that puts a stop to the eviction. She thanks her neighbors, who then march two blocks to the heavily policed bank branch with cries of “We are all Lucía and Franklin.”
As the protesters gather at the entrance chanting “Here are the thieves,” the bank draws its blinds shut, and its few clients scatter onto the street.
María Carrión is an independent freelance journalist and scriptwriter living in Madrid. She is a former senior producer of Democracy Now!
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