Share

Spain, the aftermath of the real estate bubble: almost 700 Municipalities involved in cases of corruption

This was revealed by a study by the Ministry of Education and Science reported by El Paìs: over half of the population lives in municipalities involved in cases of corruption during the real estate bubble (2006-2010) – the worst region is Murcia, where almost 60% of the Municipalities are corrupt.

Spain, the aftermath of the real estate bubble: almost 700 Municipalities involved in cases of corruption

More than half of the Spanish population (56%) lives in municipalities involved in cases of urban corruption in the period 2006-2010. That, to be clear, of the real estate bubble that so negatively characterized the economy of the country at the time governed by Zapatero. On the national average "only" 8,3% of the municipalities are involved (676 out of 8116), but in four regions (including the Valencian Community, with 94 municipalities involved, Galicia, Andalusia and Cantabria) the percentage has doubled. Not to mention Madrid and Asturias, which tripled it, the Canary and Balearic Islands which quadrupled it and the disastrous Murcia, where corruption is seven times the national average.

The study reveals it “Aproximation to a geography of urban corruption in Spain”, reported by El Pais and financed by the Ministry of Education and Science to demonstrate how much the phenomenon of corruption, especially linked to urbanization, grew in those years and strongly influenced - negatively - the worsening of the crisis in the Iberian country.

"The economic expansion has been interwoven with corruption", say the authors of the study, according to whom the phenomenon is only "the tip of the iceberg" of excessive urbanization and with alarming effects, for example, on the financial system and on the 'economic activity. "The last economic cycle in Spain - the research points out - based on the real estate boom and consumption ended in 2008, placing the country in the most important crisis in its recent history: record number of unemployed, deflation, decline in GDP, debt public and private skyrocketing. A bleak picture, in which some data can explain the undeniable link between the economic crisis and the real estate boom of the last ten years”.

The most obvious of these data is that the Spain, which accounts for only 10% of European GDP, has built 2000% of all houses in the European Union since 30. Not only that: most of these new homes were financed with money that came from abroad, thus making sure that the Iberian real estate crisis was then closely linked to the international financial crisis.

The study, which among other things had to draw on information taken from the press as there is no official statistics on this phenomenon in the country of Juan Carlos, then came to the conclusion that urban corruption affects above all "the municipalities where development has been conceived around the increase in real estate properties, whether they were residential, tourist or of a mixed nature". As for the parties involved, the verdict is quite bipartisan: in three quarters of the cases it was the two major parties who divided up the cake of malfeasance, the Partido Popular of the current premier Rajoy (44% of the cases) and the Partido socialista obrero español (PSOE, 31%), while the remaining share was awarded to minor or local entities.

Finally, the study by the Ministry of Education and Science asks why this havoc was committed. The explanation is the interest of a certain part of the ruling class in increasing the differential rent of a land property by urbanizing it and therefore capitalizing it. Interest that mainly involved the mayors themselves, through the phenomenon known as “caciquismo”, i.e. mayors “caciques”, typical of the beginning of the century and which had seen the first citizens become feudal lords, making autonomous and often discretionary decisions also on issues of land ownership and public land.

comments