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Fixing personal debt crisis is 'beyond human intervention'

RESOLVING Ireland's personal debt crisis "seems to be beyond the scope of human invention", Central Bank Governor Patrick Honohan admitted yesterday.

The commentary came as the former Trinity College lecturer admitted his own salary was "too high" but stopped short of volunteering for a pay cut.

Addressing a Joint Oireachtas Committee, Prof Honohan spoke of the difficulties in finding a solution for households struggling with negative equity and huge personal debt.

"The mechanism [to resolve it] seems to be beyond the scope of human invention," he said, as he outlined the impracticality or unfairness of various mooted solutions.

"I feel quite disappointed," he said. "Six months ago, I thought we could get a solution here."

Prof Honohan also pointed out that big property developers seem to be "in a position to insulate" themselves from their debts in a way that ordinary people couldn't.


"There's going to be unfairness which I really can't see any way of completely resolving," he said.

The comments provoked a fierce reaction from some politicians, prompting Prof Honohan to stress that he was not "taking this matter lightly".

An expert group examining mortgage debt has made some progress, he pointed out, adding that he hoped a solution could still be found either from the Central Bank or another source.

Prof Honohan also gave the committee an insight into his own personal circumstances, telling them that while he had already made "an adjustment" to his salary, it "could go lower".

He declined to make a statement on what his actual salary was, but his predecessor John Hurley was paid about €369,000 a year.

Speaking after the meeting, Prof Honohan declined to be drawn on whether he was offering to take a pay cut or waiting to be asked.

"I have [already] taken a pay cut, and it [my salary] is still too high," he said. "I seem to have floated something here but I don't really want to elaborate on it."

The comments on his own package came as Prof Honohan said overall remuneration levels in Ireland needed to go down to improve competitiveness.

This process "should start at the top" he said, before referring to his own situation.

Irish Independent