Gilmore concerned by interest hike

THIS GOVERNMENT is “very much on the side of the mortgage holder” and families under increased pressure from increasing interest rates, the Tánaiste has insisted in the Dáil.

Expressing the Government’s concern about the European Central Bank’s 0.25 per cent interest rate increase, Eamon Gilmore said the Government was acutely aware of the difficulties for many families and householders and “that is why we have committed to examining a number of proposals to deal with the difficulties facing mortgage holders”.

He told Sinn Féin deputy leader Mary Lou McDonald these included a possible increase in mortgage interest relief, a moratorium for householders facing repossession, the fast-tracking of personal bankruptcy reform for such people, and cutting costs “in the institutions that provide mortgages to see to what extent they can absorb the impact of interest rate increases”.

Ms McDonald had accused the Government of “falling asleep at the wheel”, with no promise in the legislative programme for dealing with the “pressing matter” of mortgage difficulties.

She said 10 per cent of the almost 800,000 holders of private residential mortgages were in distress with their loans and “a large proportion are in substantial arrears and others have restructured their loans”. The 0.25 per cent increase would mean a €40 rise in repayments a month on a €300,000 mortgage.

The Government “moved very quickly to bail out the bankers” but “where is the legislation to protect mortgage holders who are struggling and in distress?”

Mr Gilmore insisted the Government was “up much earlier than Deputy McDonald on this issue”. Its commitment to a range of measures for people in mortgage distress was addressed in the programme for government.

It was “acutely aware” of the difficulties in meeting mortgage payments, “very much mindful of the fact that something in the order of 44,000 households are in mortgage arrears” and of the extra burden of a rate increase.

Ms McDonald said none of the promises the Tánaiste made during the election and in the programme for government “has found its way into the legislative programme”.

Mr Gilmore told her that “not every measure taken by the Government to address the very real problems that people are experiencing requires legislation” and if a decision required legislation the Government could add it to the legislative programme.

Earlier the Tánaiste agreed with former minister for finance Brian Lenihan that the decision by Portugal to seek EU-IMF aid “is of very considerable relevance to our situation. It underlines the extent to which the problem has a European dimension.”

Mr Lenihan said the Portuguese deal would confirm that a reduced interest rate would be charged to “reflect a more sustainable figure as well as the major changes in the support programme since last year”.

He also said while it might not be legally required, other EU states voted on the packages. He suggested having a vote on the Portuguese proposals “to strengthen the Government’s hand for the purposes of the negotiations”.

Mr Gilmore said the interest rate “we are stuck with” was negotiated by Fianna Fáil.