A demonstration has taken place in Palma de Mallorca in order to show solidarity to people who, they claim, are victims of the “banking and estate agency violence”. The demonstration was organized after it made front page news that a man in Granada had committed suicide on Thursday hours before he was due for eviction. The organising group says this suicide was not a “one-off” and that many hundreds of lives are being broken by abusive banking legislation.
The Spanish government is creating a “Bad Bank”, or “Banco Malo”, in which to put all the toxic property assets.
The idea is to progress from the current building crisis by drawing a line under the current woes in the construction sector.
Basically, the Government of Spain issues debt and buys from Spanish banks all their bad investments, which are accumulated in a “bad bank”.
Presumably, the acquisition takes place at a significant discount relative to the actual value, so that in the long-term, taxpayers could even win when the assets are re-sold.
At Property Works, we beleive that this measure, although not without its risks, could be of some help to help the Spanish economy overcome the deflation of its recent property bubble.
Time will tell…