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Monday 11 November 2019

The big debt debate

Government ministers were rebuked last night by Fine Gael backbencher John Deasy for continuing to express contradictory views on mortgage debt relief. Since economist Morgan Kelly argued that the mortgage debt crisis could be solved with €6bn, ministers have been falling over themselves to point to 'solutions'.

Fionnan Sheahan and Anita Guidera

Junior Finance Minister Brian Hayes sees problems with debt forgiveness. "It's too early to rule out anything, but the problem with debt forgiveness is twofold. Firstly, it's difficult for those people paying 100pc of their mortgages when others are getting a write-down. But secondly, there's the problem for our banks: how do you possibly create two new pillar banks when another part of your policy is based on debunking mortgages? So that's a very tricky balancing act."


Tanaiste Eamon Gilmore ruled out wide-scale debt forgiveness. "The Government is not in favour of some kind of blanket write-off of mortgage debt forgiveness, as is being suggested by some."


Transport Minister Leo Varadkar wants outstanding debts written off if a house is repossessed. "If people are having their houses repossessed, I don't think it's fair that the negative equity -- or the debts, if you like -- should follow them."


Finance Minister Michael Noonan points out that the banks have funds for write-offs. "Because we recapitalised (the banks), the capital is in the banks to allow the banks write off some of that debt."

But then he isn't telling the banks to engage in widespread debt relief.


Mr Kenny said the Government was "acutely aware" of the mortgage difficulties. "We have commissioned a report on a broad range of issues here and we will make decisions when that comes to hand."


Jobs Minister Richard Bruton points to the role of the regulators. "The Central Bank is obviously a critical player. They have to decide what are the regulatory requirements for banks in treating their capital books."

Irish Independent

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