Spain's Plan To Expropriate Foreclosed Homes Raises Worries
Critics call it an investment-discouraging, "third-world" policy
Spanish politicians trying to cushion the blows of austerity plan to seize foreclosed homes to house the needy, discouraging foreign investment and threatening to violate terms of the European bailout of the country's banks.
The regional governments of Andalusia, with the most vacant properties in the country, and the tourist destination of the Canary Islands, are planning to expropriate foreclosed properties for as long as three years to house displaced families. The European Commission has asked Prime Minister Mariano Rajoy's government for details on the regions' actions, to ensure they don't clash with the country's commitments.
"It's third world, populist and akin to policies more commonly seen in Bolivia and North Korea," said Mikel Echavarren, chief executive officer of Irea, a Madrid-based restructuring firm that has advised on 22 billion euros ($28.6 billion) of refinancing. "Investors fear it will set a precedent and other regions will follow suit, making Spanish real estate investment an extremely high-risk activity."
Editor's Note: As of February 29, 2024, commenting privileges on reason.com posts are limited to Reason Plus subscribers. Past commenters are grandfathered in for a temporary period. Subscribe here to preserve your ability to comment. Your Reason Plus subscription also gives you an ad-free version of reason.com, along with full access to the digital edition and archives of Reason magazine. We request that comments be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of reason.com or Reason Foundation. We reserve the right to delete any comment and ban commenters for any reason at any time. Comments may only be edited within 5 minutes of posting. Report abuses.
Please
to post comments
Like it was a wise investment before??