Tuesday 16 July 2019

Editorial: 'Banks have recovered - but borrowers were sacrificed'

'The bank balance may have been restored but the balance of justice will have to wait.' Stock photo
'The bank balance may have been restored but the balance of justice will have to wait.' Stock photo
Editorial

Editorial

If the banks were happy enough to ignore the groaning and straining of the debt piled on them before the crash, they were lightning quick to transfer the burden on to taxpayers.

It is more than 10 years since we went from bust to bailout to recovery, and so much has changed.

Such a meltdown was always going to produce casualties. Natural fair play might ordain a parity of pain would follow over time. But that's not how it works, apparently.

Banks have, by and large, recovered remarkably well. They were given a massive transfusion through the billions poured in to revive a financial heartbeat which had flat-lined.

The bank balance may have been restored but the balance of justice will have to wait. And wait.

Again we publish figures today showing we pay more for a mortgage here than in any other country in the eurozone except Greece. If home-loan rates are coming down across the zone, they remain stubbornly high here.

Today, Irish homeowners are paying almost double what people are charged in countries such as France and Germany.

This adds up to approximately €150 more a month than in the rest of the bloc.

Surely this is indefensible, given the European Central Bank (ECB) lending rate for banks has remained at 0pc in recent years?

But to focus purely on the high rates is to miss the human story. Those in no way culpable for the gross irresponsibility and casino capitalism which led to the banking collapse are nonetheless being sacrificed.

The young are being disproportionally hit. We have a lost generation for whom the possibility of owning a home has now disappeared. They are being educated here but making their homes abroad, where they can buy them. The struggle to get the funds together here is simply beyond them.

In previous decades, those approaching their mid-30s would be on the verge of entering the property market. Today such an expectation no longer holds.

The words of ECB president Mario Draghi, when he blamed a "quasi-monopoly" among banks here for high rates in Dublin, seem to have been ignored. Nothing has changed, other than there are more people failing to get a foot on the property ladder.

From the boom to the boost we somehow have signed off on "the people who are not allowed in" to the property market.

We have seen around the world what happens when exclusion becomes weaponised, with consequences of populism and a culture of "insiders" and "outsiders". A hallmark of social justice is being inclusive. We are now in danger of moving from a "squeezed middle" to a disappearing one. If this "progress" is how we interpret "cherishing all of our children equally", we may need to think again.

Irish Independent

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