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Tuesday, June 28, 2022

The human cost of bailouts

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The high figures for the cost of the bank bailout should not hide the immense sacrifice that the drastic measures of the Memorandum of Understanding (MoU) agreed by the PP government and the EU in 2012 meant for millions of people. Two groups were particularly affected. The salvation went through the displaced persons who had lost their homes and those who were robbed of a substantial part of their savings by the preferential and subsidiary duties. In most of these cases they were humble people with little knowledge.

The bank bailout took no steps to protect families who were unjustly evicted from their homes. Until 2013, the law allowed foreclosure for non-payment of a single monthly mortgage receipt. Some laws that the EU had to reform. The consequences were a veritable human catastrophe. The drama of the evictions was confirmed by the General Council of the Judiciary (CGPJ); Bank of Spain (2012-2015); National Institute of Statistics, as of 2013, and Association of Registrars. The integration of various bodies and numerous studies have refined the calculations. According to the CGPJ, courts received 755,150 eviction orders between 2008 and 2021. Since 2013, the number has included both mortgage and rent defaults. A study by the University of Malaga shows that 63% of the launches received are carried out. With this criterion, the number would also be very high: 475,744.

In October 2008, the United States responded to the financial crisis with the TARP program. Of the $700,000 million authorized, $444,000 million has been disbursed. Most are for banks (313,000) and cars (80,000 million). But $31.5 billion was also included to help homeowners at risk of eviction.

Another directly affected group were savers. It should be borne in mind that in 2009, the year after the crisis, when the banks could no longer raise capital because investors knew how bad they were, companies placed €16,000 million of these products with their less informed customers. According to official sources, the Preferredentistas were the first pagans of the banking crisis (they contributed between 13,000 and 14,750 million). They lost between 30% and 90% of their savings, even though European regulations on these aspects only came into force in 2016.

The Italians were luckier with this type of product. The government in Rome managed to get the EU to give savers compensation for those who “undercut” these products without sufficient information. There are aspects of the rescue that are still alive. Many displaced people have not recovered, and the Supreme Court continues to dictate rulings on primary and secondary decisions.

He knows all sides of the coin in detail.

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Source elpais.com

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