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At a special briefing held on 5 September 2013, presidential candidate Nino Burjanadze stated: “A single suicide act committed by a Spanish woman as she was about to be evicted triggered emergency discussions among banks and led to the relevant decision of the Banks’ Association. All banks agreed to suspend eviction proceedings for two years and extend the time frame for paying out debts for the same period.”

FactCheck

inquired about the accuracy of the given statement.

As reported by the Spanish internet publication El País, on 9 November 2012, 53 year-old Amaya Egaña, resident of the Spanish city of Barakaldo (located north-west of Bilbao), committed suicide.

She jumped to her death from the balcony of her fourth-floor apartment as bailiffs approached to evict her for failing to pay the mortgage. The woman was found alive but the doctors had no chance of saving her. She and her husband had an original mortgage debt of EUR 164,000 (USD 208,476) which quickly rose to EUR 213,000 (USD 270,765) because of interest payments and other charges. Their home had been auctioned for EUR 190,000 (USD 241,528).

Egaña’s case was not the only suicide related to foreclosures in Spain. Two weeks prior to that, on October 25, 53 year-old José Miguel Domingo

was found dead in Granada hours before foreclosure agents arrived at his apartment. Domingo hanged himself after not having been able to pay interest payments on a EUR 240,000 mortgage loan.

The day after, a man, whose name has not been disclosed by the media, jumped from his window in the city of València. The man attempted to commit suicide minutes before foreclosure agents arrived at his apartment; this time, however, paramedics managed to save his life.

The suicide of Egaña had an effect of the straw that broke the camel’s back [=idiom referring to the last in a series of unpleasant events which brings about the change and ultimately leads to a realisation that the ongoing unpleasant situation is impossible to cope with]. Hundreds of people marched in the streets of Madrid, Barakaldo and others protesting the eviction of those unemployed and affected by the Eurozone crisis.

Economic Situation in Spain Spanish banks, which had to endure tough times during the recession, were accused of having given out loans irresponsibly in the period preceding the recession. The accusations have been denied by the Spanish Confederation of Savings Banks (CECA), however. As claimed by the Confederation, the loans were given in the period when Spain was experiencing an economic boom, when taking a credit was very easy and the rates of unemployment – truly low. Hundreds of thousands of new homes were built

during the boom years and it seemed like everyone could become a homeowner. The upswing of the Spanish economy came to a halt in 2008 and was replaced by a recession. Banks were left with enormous debts due to bad (assets) mortgage loans. The pace of economic growth subsided and the rates of unemployment started climbing.

The Spanish economy, which is the fourth largest in the Eurozone, fell into a major crisis which brought about the loss of millions of jobs. On 26 October, new figures released by Spain’s National Statistics Institute showed that the country’s unemployment rate climbed to 25.02% in the third quarter of 2012 while at the beginning of 2008 the rate of unemployment was one of the lowest in the history of Spain – 8.6% (

Spain’s labour force roughly amounted to 23 million people). Young Spanish families and immigrants were affected by the crisis the most. The unemployment rate of people below the age of 25 surpassed 50%.

Spain's central judicial authority reports 150,000 evictions of Spaniards and immigrants from their homes since 2008. According to Spain's El País

newspaper, however, the figure could be closer to 400,000. As stated by CECA, 97.5% (as of 2012, so in the aftermath of the suicide act) of mortgage owners were paying their mortgages on time which indicates that despite the crisis the number of payers was still high. The facts given in the statement of the Spanish Confederation of Savings Banks do not in any way imply a favourable financial condition of the mortgage payers, just on the contrary, heavy debt burdens and frequented cases of related suicides kindled multiple protests in the society.

The Spanish government called on the Eurozone countries to provide financial assistance to Spain’s banks. The Eurozone countries offered the bailout of EUR 100 billion for the recovery of the banking sector (the assistance

was designated for the Spanish government and not specifically for banks). At this point the Spanish banks received only EUR 41 billion of the offered EUR 100 billion.

Moratorium

The Spanish Banking Association (AEB) issued a statement saying that the eviction proceedings would be halted for the next two years for those Spaniards being on the verge of extreme poverty due to the economic crisis and unable to pay mortgage debt. The indicated statement was made three days after the suicide of Amaya Egaña.

As reported by the Wall Street Journal, the indicated moratorium did not affect all households but only those whose member(s) lost unemployment assistance, is disabled, extremely ill or of an old age. The unemployment was not a decisive factor for the moratorium to be applied to a specific household. The Wall Street Journal

states that the household needs to have a yearly income of EUR 19,200 (USD 24,450) or less in order to qualify for the moratorium. Various other criteria, for instance single parents with two children, were taken into consideration as well.

Conclusion

Our inquiry revealed that Nino Burjanadze’s statement is indeed based on real facts. Two suicide acts of Spanish citizens prompted protests in the society and enveloped the whole country as a result of which the banks agreed on certain compromises.

The gravity of the economic situation in Spain and the Eurozone crisis undoubtedly played a considerable part in banks making the decision to establish the moratorium. The additional helping factor was the financial assistance to the Spanish government from the Eurozone countries which substantially alleviated the harsh economic conditions and created a possibility for tangible compromises.

Although the facts outlined in the presidential candidate’s statement are truthful, Burjanadze fails to mention certain details of great importance such as the economic crisis and the assistance given to the banking sector by the government. She also overlooks the fact that the moratorium was not universal and applied solely to certain categories of households.

Accordingly, we conclude that Nino Burjanadze’s statement: “A single suicide act committed by a Spanish woman as she was about to be evicted triggered emergency discussions among banks and led to the relevant decision of the Banks’Association. All banks agreed to suspend eviction proceedings for two years and extend the time frame for paying out debts for the same period,” is MOSTLY TRUE.-Archil Rostomashvili

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