Subcontractors go on hunger strike in Spain

Agence France-Presse

The end of Spain's decade-long real estate boom has sunk hundreds of small construction firms, including many subcontractors like Romtectabi, whose owners have gone on a hunger strike to try to collect 700,000 euros ($920,000) they are owed.

Damian Catalin of Romania and his Spanish business partner Julian Martin began their protest outside the Madrid offices of construction firm Obrum, which they say owes their company the money.

"200 families in need because of Obrum," reads one of the signs placed outside of the company's offices, a reference to the 200 people employed by Romtectabi who are now out of work.

Martin had to call off his hunger strike after two days for health reasons but several Romtectabi employees have joined the protest and are refusing to eat. Many have not been paid since October or December.

"They have to pay their mortgages, for their houses, for food, they don't have any more money," said Catalin as he stood outside the Obrum office surrounded by several of his employees as a mixture of snow and rain fell from the sky.

Contacted by Agence France-Presse, Obrum refused to comment.

Fueling the boom
The low interest rates which followed Spain's accession to the eurozone in 1999 helped fuel a housing boom as Spaniards took out mortgages to buy homes for the first time or to trade up to a larger house.

But the market started to stagnate last year due to oversupply combined with rising interest rates.

The international credit crunch put mortgages out of the reach of a growing number of people, battering the sector that has been Spain's engine of economic growth.

Home sales in Spain fell by 36.4 percent during the third quarter of 2008 over the same time last year to 118,533 units, according to housing ministry data.

The slide in the real estate sector has spread to other areas, pushing Spain to the brink of recession and bringing the unemployment rate to 13.4 percent in November, the highest rate in the 27-nation European Union.

Just over three million people were unemployed at the end of December in Spain, a nation of some 46 million people, including 590,000 construction sector workers like Romtectabi's Miloud Humid, an immigrant from Morocco. He has not been paid since October and is struggling to pay a monthly mortgage of 1,200 euros and a monthly payment of 300 euros for his car.

"We have spent all of our savings. They are going to come and seize everything," he said.

Bouncing checks
Two suppliers who have also not been paid by Obrum have also joined in the protest by Romtectabi.

"They gave me checks. When I went to cash them they bounced," said Juan Manuel Palomar who says Obrum owes him 200,000 euros. He was had to let go of 20 workers and stop work on a building site.

"We are in a mouse trap," said Paul Ababei, another Obrum supplier who has tried in vain to collect 460,000 euros related to a project carried out in May and June last year.

His company Belona is now on a list of bad payers and it can not get a bank loan.

"We are ruined," he said.

Prime Minister Jose Luis Rodriguez Zapatero predicts the economy will start to improve at the end of this year when the effects of his socialist government's 11-billion-euro stimulus package, much of it earmarked for public works, start to kick in.Catalin, however, is not convinced. He accuses Zapatero of "only helping banks and construction firms" and not workers. He and his colleagues plan to take their protest to Spain's parliament.