Is Spain selling out European strategic interests by wooing foreign investors with residence permits?

Spain's measures against the country's real estate crisis are getting ever more desperate. Now the government hopes to lure foreign investors with promising residence permits. However, critics strongly condemn the plan.

The initiative is primarily aimed at Russian and Chinese investors who would otherwise need a European Union visa.

The houses are on the Spanish coast, around big cities, or out in the countryside. They stand in various states of completion after first going up during the boom years. Today, they are a symbol of the country's deep crisis.

In 2006 alone, some 900,000 apartments were built in Spain. Back then, real estate agents and construction companies cashed in on the boom, people were eager to buy, and prices for houses and apartments went through the roof. After all, banks were handing out cheap credit. Even people who didn't have any capital of their own, and essentially couldn't afford to shop for real estate, got credit from the banks. Most buyers simply assumed that prices would continue to rise. But then the bubble burst. It's estimated that around 1 million apartments are empty. Since the beginning of the crisis, prices are estimated to have dropped by more than 30 percent.

Spanish Prime Minister Mariano Rajoy believes "the building sector has to get ahead again. The buildings have to be sold - and at proper prices."

Juan Rosell, president of the CEOE trade association, welcomes the plan, saying, "We've got to look into everything that could increase the real estate business."

However, the CO union sees things from the point of view of class politics. The government would make access for wealthy foreigners easy while curtailing the rights of foreign workers.
The opposition isn't sold on the plan, either. Marisol Perez Dominguez, immigration spokeswoman for the socialist PSOE party, accuses the government of linking residence permits with economic interests.

"Instead, they should stem the tide of immigration so we won't have more and more empty apartments while more and more people are on the street," she says.

Immigrant organizations have also criticized the idea.

Note EU-Digest: the European Parliament should look into this. If other cash strapped EU countries start allowing this the EU could eventually find itself being controlled by foreign interests. Instead non EU investors could be provided with national residency papers instead of a EU wide residency status.

Read more: Spain woos foreign investors with residence permits | Europe | DW.DE | 24.11.2012