Holland and the bubble dilemma

the price of housing. Neither immigration, nor the survival of the euro nor the color of the government that comes out of the polls in September are as worrying to the Dutch as the situation of its real estate market. Particularly for those who bought a house thinking that they could always resell it – at least! – for their original purchase price and now they find that they have “a mortgage under water”, that is, a home mortgaged for a price original higher than the purchase price.

bankers and owners do not agree in their diagnosis on

bankers and owners do not agree in their diagnosis on

the situation of the housing market. But after four years of almost uninterrupted price fall, everyone begins to worry about the extent of their ills. Delta Lloyd Bank has been the first entity to publicly say that the Dutch property market is dangerous, after the Parliament approved some timid but contested measures to try to cool it down, but without putting it out … Here is the dilemma it faces. Holland.

Go ahead with some data to understand why various international organizations describe the Dutch real estate sector as peculiar or, directly, eccentric. The Dutch are among the richest and most saving citizens in Europe, with assets equivalent to 280% of their GDP. However, it is in the Netherlands – and not in Spain, Ireland or Portugal – where the most indebted households in Europe are located. Its debt is equivalent to 250% of its GDP, compared to 206% in Ireland, 127.8% in Spain or the modest 88.9% in Germany (Eurostat, 2010 data).

The explanation for the high indebtedness of Dutch households is found in the policy of stimulating the purchase of housing, as opposed to the rental option, launched at the end of the 1990s. That is when a state guarantee was created (NHG, for example). , Nationale Hypotheekgarantie) that is activated if the owner, due to certain circumstances (unemployment, divorce, incapacity for work …) is forced to sell his house below the original price. In that case, it is the State, ultimately, who pays the outstanding debt with the bank. If at first this protection was accepted by 30% of the buyers, now it affects 80% of the acquisitions, partly because the banks push the client to request it. An ideal system for the consumer with limited cost for public finances in times of prosperity but dangerous – it is warned now – if things go wrong.

Another rarity of the Dutch market is its mortgages. The most popular ones are free of amortization (aflossingsvrije hypotheken) and allow not to amortize capital in the 30 years that the loan usually lasts. During that time, only 50% of the requested money is paid, which encourages consumers to borrow much higher than they could otherwise afford. In parallel to the mortgage, they usually contract savings accounts linked to investment funds, with the idea that after 30 years they have accumulated sufficient funds and benefits to settle the outstanding debt with the bank (all the capital loaned).

This model has been generously encouraged by the Dutch State

This model has been generously encouraged by the Dutch State

which offers tax breaks of up to 52% (the equivalent of the type of income tax that is paid, which favors the highest rents) on the interest that is paid. And immediately: the bank discounts them in the morning, and in the afternoon the State reimburses them, hence the ease of individuals to assume high debts. The tax advantage of mortgages is in fact greater than that foreseen to stimulate savings, with a tariff reduction of 30%. These deductions explain the strange combination that is currently seen in the Netherlands, Sweden or Denmark: their households have a high rate of private savings but they are also the most indebted.

The stimulus plan worked and the percentage of property ownership went from 42% in 1980 to 55% in 2005 and 60% currently. But the side effect of this policy has been a sudden and sharp rise in prices (an average of 80% between 1996 and 2001) that came to a halt in 2008, when prices suddenly fell by 5.3%. The following year the fall moderated (-1.5%) and in 2010 they recovered slightly (1%) thanks to the stimulus measures put in place by the Government. Last year, the Netherlands closed in recession, the fall in prices was 3.8% and this year is expected to reach 5%. The Bank of the Netherlands believes that prices will continue to fall.

A situation, in short, in which many owners and potential buyers begin to see the dangerous over-indebtedness to acquire a home that may have to sell below cost. According to the Dutch Central Bureau of Statistics (CBS), 500,000 Dutch houses currently have a value lower than the purchase price (they are called “underwater mortgages”).

“The housing market is the main problem of the Dutch economy, I think it poses a risk to its financial stability,” says Lans Bovenberg, professor of economics at the University of Tilburg and co-author of a plan signed by a score of experts who In February, he urged the Government to reform the sector, with an eye on the measures adopted a few years ago in Denmark, where they faced very similar problems. “I think we are first of all a debt bubble. Banks have a large financing gap and since the credit crunch of 2007 it is more difficult to obtain funds from the market, “says Bovenberg.

After losing the parliamentary majority, the coalition between conservatives and liberals was forced to agree the budget with the opposition, which led him to admit some reforms: give tax deductions only to mortgages that also amortize capital, prohibit the financing of costs to buy the home, put a cap on the loan at 100% of its value and not at 125%, as in good times … “To buy a house, we will have to save again”, summarized a few weeks ago the newspaper Of Volkskrant .

The reaction of the Dutch public opinion has not been positive.

The reaction of the Dutch public opinion has not been positive.

In Bovenberg’s view, the reforms recently approved by the Government do not attack the root of the problem but, on the contrary, can make it worse. “They lead to a price fall too fast, because the new owners will not be able to afford houses as expensive as they are now. I am afraid that prices, instead of falling by 5 or 10% more, which would be sustainable, can fall an additional 20% “. This will make bank financing more difficult and expensive, he warns, and it can have consequences for the real economy.

Bovenberg does not believe that the state guarantee of mortgages could become a problem for public finances. “First of all, because Dutch households are very disciplined and pay their mortgages, we have one of the lowest delinquency rates in Europe. And secondly because unemployment is still quite low, 5%. ” But with a 20% drop in prices as estimated by the reform approved by the Government, he points out, this could increase unemployment and delinquency.

Edward Feitsma, counselor of the Dutch Banking Federation, makes a less severe diagnosis of the situation in the sector. “I’m not saying there are no clouds on the horizon. There is a problem of falling prices, but more gradual than in Spain, Ireland or the United States. There may be a growing number of people who will not be able to pay their mortgage in the next few years, but here there is a national system of guarantees for those cases, “he says.

The financing problems of the entities have increased, he says, hence the deleveraging is more attractive and lends less than before. What the sector did ask for, and is grateful that it was approved, was a reform of the tax deduction model, since “you have to give incentives to people to amortize capital for the duration of the mortgage and do not leave everything to the end”. The least positive part of the reform, says Feitsma, is that it affects only new buyers.

Another fact that makes some think that the fall in prices is only a temporary correction, the result of the current economic uncertainty, is that in Holland “there is still housing shortage, contrary to what happens in Spain or Ireland. Here the offer is very limited, so we do not expect a dramatic drop in prices. “

The priority of the plan launched in February by 22 prominent economists is to reform the model of deductions so that it is no longer possible to deduct the interests of a mortgage that save and encourage the amortization of capital, as Denmark did a few years ago when faced with a problem Similary. Next, they propose, measures should be taken so that banks can take advantage of the high savings rate of their clients, funds that go out of the country.

The rental market is one of the areas where economists

The rental market is one of the areas where economists

ask to act because it is currently very regulated, there are long waiting lists and little mobility, which pushes young people to buy a home before they have even saved, so they ask liberalize it more. In addition, the space in the Netherlands is a real luxury: urban laws are very strict and there are many limits to the use of land.

The owner organization Eigen Huis (Own House), for its part, rejects repeated warnings from organizations such as the OECD or the IMF about the situation of the Dutch real estate sector and its banking ramifications. “They give a distorted picture of reality,” says its director, Rob Mulder. “They are based on very simple criteria, such as household debt in relation to GDP. They should look at other things, like the high savings rate. Or that it is a very safe market thanks to the state guarantee “.

In addition, the Dutch population continues to grow, households are getting smaller, the rental market works poorly (it is highly regulated and waiting lists are saturated) and very little is currently being built, so there is more demand than supply, the representative of this owners organization. “We still need 500,000 extra houses so that each household has one property,” Mulder calculates, crossing his fingers so that the new government reverses the reforms adopted and no longer depressed a market that is already in recession.

The awakening of the predator

The awakening of the predator

It was a matter of time before Pedro Luis Gallego , known as the rapist of the elevator , acted again. And, according to the investigations, it seems that he has done it again, this time in Madrid: two rapes and two other attempts at young people of 20 years. Because it is what the so-called sexual predators do , as it was defined yesterday by the Chief of Police of Madrid, Alfonso José Fernández, a definition with which criminologists and psychologists agree.

“Gallego, 59, responds to that profile, that of a psychopath who is difficult to stop because he does not recover. As much as you work with him in prison, you can not, “say sources in penitentiary institutions, who immediately clarify that this does not happen with all rapists,” far from it. They are the most extreme, isolated cases, on which it is very difficult to act, “they insist. The problem, they admit, is the trail of victims that they leave on the road.

In her case, young women, between 17 and 24 years old, whom she has left permanently marked and to whom she has destroyed her life.





A forced freedom without the possibility of controlling or monitoring the steps of the aggressor

A forced freedom without the possibility of controlling or monitoring the steps of the aggressor

These murderers and rapists are difficult to control even for the police. Yesterday, Fernandez admitted that they had not been able to control Pedro Luis Gallego after his release from prison in 2013 for the murder of two young men and 18 rapes. Doing it was illegal.

“We have millions of data and files, but in this case it is a person who had been released and who could not apply any extraordinary measure,” said the Chief of Police of Madrid. Because when one is serving a sentence, the debt with society is over and, therefore, what is related to that crime (in this case, the numerous crimes) is extinguished. They can not even check DNA, they say.

Now the sexual predator has awakened. Although the correct thing, point out psychiatrists and criminologists, would be to say that as much has been drowsy, waiting for the opportunity arose to attack again. In the years prior to the release from prison, reports prepared by experts warned that the rapist of the elevator was not rehabilitated. Or put another way, these professionals warned that, once released, the risk of re-raping was very high. “We could say that in profiles as exceptional as this rapist, the certainty of recidivism is absolute,” says Eduard Vieta, head of the psychology and psychiatry service at the Hospital Clínic in Barcelona.

Specialists propose more therapy after release from jail, instead of long sentences

Specialists propose more therapy after release from jail, instead of long sentences

And why has not it been possible to prevent Gallego from raping again? Is the question. A question that costs to find an answer. Ignacio González Vega, spokesperson for Judges for Democracy, points out that in cases like this rapist justice could not do anything more than what he has done. “Pedro Luis Gallego served his sentence and once he was released he became a citizen with the same rights and duties as the rest of society.” There was not the possibility of watching him or controlling his movements, nor forcing him to continue any treatment or therapy.

This rapist was one of the serial sexual aggressors who in 2013 benefited from the repeal of the Parot doctrine (a rule that allowed lengthen the sentences to this type of prisoners so dangerous and that in the case of Gallego had kept him in prison until 2022) knocked down by the Court of Human Rights in Strasbourg. Could the last victims of this rapist now claim any responsibility to that European court or to the judges who released Gallego? Ignacio considers that this requirement “would have no meaning, nor possibility of prospering”. The judges have limited themselves, in this case, “to apply the norm set by the legislators,” adds Ignacio.

Santiago Redondo, Professor of Criminology at the University of Barcelona, ​​agrees with this judge that from the legal point of view nothing could be done to prevent the release of this rapist. But one thing is the law and another, Redondo points out, “look for alternatives in other areas so that this type of case does not happen again”.

The rights of these prisoners are sometimes valued more than the protection of future victims

The rights of these prisoners are sometimes valued more than the protection of future victims

The criminologist is committed to the creation of a reintegration criminology service “that would take care of the accompaniment of these prisoners, with a high risk of recidivism, once they are free.” He admits that many of them would refuse that option, “but the success of the professionals would go through knowing how to convince them of the need for that advice that would also serve to control them”.

Eduard Vieta advocates, for his part, for a decided legislative change. “In cases of rapists or serial killers that are practically irrecoverable, a good formula could be the application of shorter sentences and long periods of surveillance and control obtained freedom, instead of long sentences and no control when released from prison.” This psychiatrist emphasizes that you should never forget, when talking about the rights of a criminal who has already served his sentence, that there is “another supreme good such as protecting future victims when there is certainty that the prisoner will reoffend. once I’m on the street. “

The arrest of Pedro Luis Gallego has reopened the debate of the permanent reviewable prison. If it had been possible to apply, in this case that rapist would continue with all security imprisoned. It is a norm that also includes supervised freedom, which allows the control of these offenders in freedom. Although that surveillance has an expiration date.

For Redondo, another formula would be to establish, in the most extreme cases, follow-ups of up to five years once the sentence is served. Different studies show that after that period, once obtained the freedom, very few delinquents return to reoffend.

Greece and the euro partners are already negotiating a 15-hour commitment


Greece and the euro partners are already negotiating a 15-hour commitment

Brussels, Jul 13 (EFECOM) .- Greece and the other 18 euro partners are already negotiating a 15-hour commitment that will allow the parties to start negotiations for a third billion dollar rescue in favor of Athens.

The Heads of State and Government of the Eurozone, together with the presidents of the European Commission, Jean-Claude Juncker, and the European Council, Donald Tusk, have explored from Sunday at 14.30 GMT the way to reach an agreement acceptable to all.

“All the conditions are practically accepted by the Greek Government,” diplomatic sources said, in relation to the document agreed by the Eurozone’s economy and finance ministers (Eurogroup) during the weekend, and in which there were some fringes that are those who try to close the leaders.

That agreement could be reached in the coming hours and for him, Athens would accept some of the measures that he previously rejected, including some of approval and implementation as immediate as next Wednesday, to begin negotiating this third rescue, until 2018 and encrypted around to 86,000 million euros.

To achieve the complex agreement, the leaders have met with Greece and each other, in different formats, with several pauses to recap on the aspects in which it has been progressing.

Athens would now assume the participation of the International Monetary Fund (IMF), but not with a new loan, but with the support of experts, and would renounce reaching an agreement for a withdrawal, while the eurozone for its part eliminates any kind of reference to an exit of Greece from the euro, according to several sources consulted.

Greece still sees two issues to be resolved, the first of which is the aforementioned IMF participation in a new program starting in 2016, whose concession partners want to condition the institution’s financial participation, a “prerequisite” that Athens rejects, pointed sources of the Hellenic Executive.

The second is the creation of a trust fund to which Greek public assets would be transferred to privatize them and achieve up to 50,000 million euros in the long term to reduce Greek debt.

Greece rejects this idea driven by Germany, according to sources of the Hellenic Executive.

In addition, community sources indicated that the institutions that formed the troika believe that for these assets could not be achieved more than 7,000 million euros.

European and diplomatic sources confirmed that the heads of state and government of the euro area, meeting in Brussels since Sunday, finalize the details of a document by which Greece is committed to taking a series of measures until Wednesday and thus recover the trust of the partners.

If this parliamentary approval is fulfilled, the partners would be willing to give the necessary mandate to open negotiations for the granting of that third bailout.

The priority actions that Greece would have to carry out include five points, of which “four will be definitively voted for Wednesday, including adjustments in VAT, pensions and the independence of the Helena Elstat statistical office,” sources indicated. Community

The Greek Prime Minister, Alexis Tsipras, has indicated to his partners that he could not have any of the demands in time like the Civil Procedure Law list.

In addition to these points, the Eurozone demands Greece “additional commitments beyond, given that the situation has worsened”, with measures such as the revision of labor legislation, including the delicate collective dismissals.

For Tsipras it is key that this meeting ends with some kind of consensus that allows sending a signal to the European Central Bank (ECB), ahead of the meeting of its Board of Governors this Monday and to which the Bank of Greece has requested an increase of the roof of the liquidity lines that are the main source of power of the banking Helena, subjected to a corralito for two weeks.

According to the sources, the leaders are not going to ask the ECB for anything, given that the agency is independent, but other community sources indicated that the perspective of a program and the opening of negotiations, if “could have an effect” on the decision of Frankfurt.

“The ECB will have to judge according to how this goes, to what extent it has a capacity within its mandate to be able to widen a liquidity that is practically exhausted, not even 60 euros a day are guaranteed,” diplomatic sources said.

With regard to short-term financing, the possibility has been mentioned of taking advantage of the benefits of 8 online guaranteed installment loans for bad credit gadcapital.com.

The possibility of recourse to the remaining funding of the European Financial Stability Fund (EFSF), which had a capacity of up to 60,000 million euros and which has 13,000 million that can be activated by the decision of the Ministers of Economy and Finance, is not ruled out. of the EU by qualified majority.

The ministers celebrate their regular monthly appointment on the 14th, and a new Eurogroup also already planned, will start at 13.00 GMT.COM