There is little possibility of a wave of repossessions taking place in Ireland
Opinion: Tackling the personal debt crisis must be a political priority
In advancing such a scenario I run the risk of being accused of scaremongering, even of serving the interests of those engaging in strategic default. My purpose, however, is to seek to paint a picture of the stark and unpredictable consequences that could flow, by accident as much as design, from an enduring failure to talk about the personal debt crisis. Our banks and political system has, after all, been accused by some of failing to face the reality of the need for repossessions.
The banks’ reluctance in this respect arose in part from the legal implications of the Dunne judgment, which have since been dealt with by changing the law. There has also, however, been an understandable reluctance to tread upon the at times irrational Irish psychological attachment to property ownership and to holding on to land even after someone else has gained legal possession of it.
Long before it reaches any potential crisis point that could bring people on to the streets, the State’s enduring mortgage crisis is incurring wear and tear on our economic system and on our political system. Along with the persistence of terrifying levels of long-term unemployment, the mortgage crisis creates a potential for real political volatility. Any conclusion that the Irish democratic processes have weathered our current economic storms is premature until these two issues have been tackled seriously.
The finance committee hearings this week were useful in enabling our parliamentarians to challenge bankers publicly on how they were dealing with the mortgage crisis. Parading the bankers before Oireachtas television cameras served a useful purpose in demonstrating parliamentary accountability. The hearings also did much to remind us of the depth and scale of the mortgage problem.
The hearings could do no more than scratch the surface of the problem, however. As the number of distressed loans continues to rise – albeit, it seems, more slowly – there is still little real engagement with the tens of thousands caught in mortgage arrears difficulties and, it seems, little recognition of realities around their capacity to repay.
After next month’s budget, finding ways to accelerate solutions to the personal debt crisis will have to be the political priority.