Posted on August 26, 2009 by Spanish Property News
Celestino Corbacho, Spanish minister of employment
Bank greed is the “indisputable origin” of Spain’s property crash, according to Celestino Corbacho, Spain’s Minister of Employment.
“As the financial sector is always telling labour markets what they should be doing I am going to remind it of something; it is responsible for the real estate situation. It was the financial sector that supported and encouraged the inflation in the real estate sector, ” said Corbacho in an interview this week, going on to argue that lose lending practises and “120%” mortgages encouraged over-building during the boom, which caused the glut today.
Spain’s economic situation today would be much healthier if banks hadn’t thrown money at “short term, high profit sectors, at the expense of strategic long-term sectors,” said Corbacho, who lamented the lack of a mea culpa from the financial sector. “I would like to hear someone responsible from the financial sector come out one day and say: we made a lot of money in that period, but we were probably mistaken.”
“We wouldn’t be here if it hadn’t been for the model of financial greed we have,” said Corbacho bluntly.
Corbacho may be right to blame banks for their part in Spain’s property crash, but he had nothing to say about another group with plenty of responsibility for the mess: the government and politicians just like him.
Spanish property developer debt is 324 bln euros
The bankers did put the final nail in the coffin but the Spanish Government were killing the industry and the bankers finished the job.