Covid and insolvencies: the Spanish situation
Covid is once again putting the entire globe to the test. Without making distinctions, some more, some less, is suffering from this extremely critical situation. In previous guides, we have dealt with the mortgage issue as a topic. And above all, how it was possible for many underwriters of lease agreements to defer payments.
Well, however, it seems that, despite the directives and actions implemented by the government, the problems still persist in some countries today. A striking example at this juncture is that represented by Spain. The only nation of its kind for undisputed beauty and culture, Spain has achieved another record. No doubt not happily. It has been classified as one of the European nations most affected by the pandemic emergency. And it is precisely here that we at Realigro, after a few months from the support measures adopted by the Spanish government, want to analyze the situation. What will Spanish real estate look like now? Will the policies aimed at supporting the most affected groups have had the desired results? To answer this question, we have decided to create this small column, dedicated precisely to this topic. So if you are curious to know more, we can start!
Unfortunately, one of the most popular words in Spain in the last period, starting with the pandemic emergency is 'insolvency'. But let's take a step back. In the previous months, Spain, similarly to other European countries and not like Germany, took measures to relieve families and businesses that had payment obligations, as underwriters of leases. The Spanish government has therefore decided to defer payments and, in the most extreme cases, to suspend them.
Currently, however, the situation does not seem to have improved, considering that there is talk of a real default with frightening figures. About 2,500 million euros is the total of euros to be repaid, with the due interest, as the result of mortgages and loans aimed at supporting and maintaining lease contracts. But there is more. If we analyze the more general economic situation, including in this macro area also the rental market and the various real estate sales, we arrive at a total of over 100,000 million euros already reported in September. We remind you that the period of time within which it was possible to fulfill public contracts was six months. The one for private contracts is twelve. Except, of course, for extreme situations. According to industry media reports, a real peak of insolvencies is expected in the coming months. A rather tragic conclusion of this 2020, if we also add a health system that is now in collapse.
It should also be remembered that in the period of the end of November, the deadlines for the payment of many contracts will expire. Therefore, there are fears that an unprecedented economic recession could be reached. It is not necessary to overlook yet another worrying fact. Thousands and thousands of Spaniards are currently in an ERTE situation. The Spanish layoffs. Many fear that they may pass from this deadlock to a total block, especially as regards self-employed workers who will have to lower the shutters of their activities.
How will this situation end? You will find out only by staying up to date here!
Well, however, it seems that, despite the directives and actions implemented by the government, the problems still persist in some countries today. A striking example at this juncture is that represented by Spain. The only nation of its kind for undisputed beauty and culture, Spain has achieved another record. No doubt not happily. It has been classified as one of the European nations most affected by the pandemic emergency. And it is precisely here that we at Realigro, after a few months from the support measures adopted by the Spanish government, want to analyze the situation. What will Spanish real estate look like now? Will the policies aimed at supporting the most affected groups have had the desired results? To answer this question, we have decided to create this small column, dedicated precisely to this topic. So if you are curious to know more, we can start!
Unfortunately, one of the most popular words in Spain in the last period, starting with the pandemic emergency is 'insolvency'. But let's take a step back. In the previous months, Spain, similarly to other European countries and not like Germany, took measures to relieve families and businesses that had payment obligations, as underwriters of leases. The Spanish government has therefore decided to defer payments and, in the most extreme cases, to suspend them.
Currently, however, the situation does not seem to have improved, considering that there is talk of a real default with frightening figures. About 2,500 million euros is the total of euros to be repaid, with the due interest, as the result of mortgages and loans aimed at supporting and maintaining lease contracts. But there is more. If we analyze the more general economic situation, including in this macro area also the rental market and the various real estate sales, we arrive at a total of over 100,000 million euros already reported in September. We remind you that the period of time within which it was possible to fulfill public contracts was six months. The one for private contracts is twelve. Except, of course, for extreme situations. According to industry media reports, a real peak of insolvencies is expected in the coming months. A rather tragic conclusion of this 2020, if we also add a health system that is now in collapse.
It should also be remembered that in the period of the end of November, the deadlines for the payment of many contracts will expire. Therefore, there are fears that an unprecedented economic recession could be reached. It is not necessary to overlook yet another worrying fact. Thousands and thousands of Spaniards are currently in an ERTE situation. The Spanish layoffs. Many fear that they may pass from this deadlock to a total block, especially as regards self-employed workers who will have to lower the shutters of their activities.
How will this situation end? You will find out only by staying up to date here!
