Sunday 28 October 2012

Greece and Spain: Crime and Punishment?

We all know the conservative narrative: the honest, long-suffering and wealthy taxpayer was being ruthlessly extorted huge amounts, which were immediately grabbed by the selfish and lazy moochers, via "entitlements" (enter the old-timers in age pension, the "welfare queens", the lazy voluntarily unemployed, the crippled; you know, "those people"); the cunning American borrowers lied to the naïve banks in their mortgage applications.

Bottom line: "those people" were living beyond their means. Now, the morality play concludes, they must pay. It's time to unshackle the job-creators, give them a break.


In 2004, when the Duke and Duchess of Parma wanted to buy a home, they, like everybody else, applied for a mortgage loan (See here, in Spanish). They asked La Caixa for a EUR 5mn loan, in order to pay for an apartment valued 5.8mn, at the time. Over a 30 year period, the monthly payment (variable interest) was over EUR 17,000.

At the time, according to the information provided, the couple's net worth was EUR 3.6mn (1.3mn in check and savings accounts), and His Excellency, Iñaki Urdangarín, was already guarantor to 3 other mortgages.

Among the paperwork, His Excellency - His Majesty don Juan Carlos I of Spain's son-in-law - included his tax declaration (See here, PDF, in Spanish). That year, His Excellency declared a before-tax yearly income of EUR 36,000, or 3,000 a month.


And, you know what? In October 2004, La Caixa approved the loan to the couple.

According to Reuters (October 18):
"Loans that fell into arrears in August increased by 5.3 billion euros ($7 billion) from July, reaching 178 billion euros, Bank of Spain data showed on Thursday.
"Non-performing loans on the books of the country's crippled banks have risen steadily since a decade-long property boom ended four years ago.
"Spain's lenders are preparing to receive the first funds from a 100-billion-euro ($131.21 billion) credit line agreed with the European Union in June which is seen paving the way to a full sovereign bailout." (See here)
And as experience shows and unlike PM Mariano Rajoy once tried to convince the Spanish people, those funds do come with strings attached.


And speaking of unshackling the Atlases. Last week Rajoy's government ordered the release from jail of 4 of his PP colleagues who had been sentenced in 2009 to prison terms ranging from 3 to 10 years, for the commission of 31 instances of corruption. (See here, in Spanish).

Asked in Parliament to justify the measure, the Rajoy Government gave no reason. The sentence was not questioned.


In Greece, the journalist Kostas Vaxevanis was arrested today after publishing a list with the names of 2,059 tax evaders, allegedly including the president of the Greek Parliament, several high officers of the Finance Ministry and a number of high executives and business people. (See here, in Spanish; here, in English)

The list, sent to the Greek government in 2010, was compiled by Christine Lagarde, then French Finance minister, currently head of the IMF. According to George Papaconstantinou (PASOK), Greek Finance minister in 2010, the list was lost.


This is what underlies the conservative/semi-fascist bullshit.

No comments:

Post a Comment