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Spanish politicians call on government to help banks over mortgage ruling

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Spanish politicians call on government to help banks over mortgage ruling

Politicians from Spain's center-right Ciudadanos party are requesting that the country's caretaker government take action to protect banks against a potential European Court of Justice ruling that could cost the sector €25 billion, Europa Press reported Sept. 23.

The ECJ's Advocate General concluded Sept. 10 that a controversial mortgage index — Spain's Índice de Referencia de Préstamos Hipotecarios, or the Mortgage Loan Reference Index — could be considered abusive. The index was based on the average monthly rate for mortgages and published by the Bank of Spain but was higher than the Euro interbank offered rate, leading to claims of a lack of transparency and multiple cases in Spanish courts.

Although the conclusions are not binding, two members of Spain's parliament representing the Ciudadanos party, Vicente Ten Oliver and María Muñoz Vidal, said they believe that the court will rule against the banks, the report said. They estimated the cost to the sector could be €25 billion, it added.

Spain is heading for its fourth election in four years Nov. 10 after the ruling Socialist Party failed to return a majority in April and was unable to forge a coalition with other political parties, including Ciudadanos.