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Government failing to act on ECB interest rate rise – Doherty

7 July, 2011

Speaking after the announcement of the expected ECB interest rate increase Sinn Féin Finance spokesperson Pearse Doherty has accused the Government of failing to act on the long expected ECB interest rate rise and reneging on their Programme for Government commitment to assist distressed mortgage holders.

Deputy Doherty said:

“Today the ECB raised interest rates by 0.25 per cent. This will be the second rise this year with possibly more to come.

“We have known about this hike for some time. Despite this the Government has done nothing to prepare for the huge impact this will have on over 200,000 mortgage holders and many small businesses across the country.

“The Programme for Government has a clear commitment to force banks to absorb the impact of these interest rate rises in order to protect vulnerable mortgage holders and small businesses.

“I have repeatedly pressed the Minister of Finance on this matter. Again this week when I pressed Minister Noonan on this issue of whether he had directed the banks to absorb a future interest rate hike by the ECB as promised he failed to give a direct answer. The only conclusion that can be drawn from this is that he has not done so.

“It is clear that the Government is failing to act on this long expected ECB interest rate rise and are reneging on their Programme for Government commitment to assist distressed mortgage holders.

“The Government must act now to shield people from this rate hike. They must also do more to convince both the ECB and their Eurozone counterparts that this is the wrong policy for the Irish economy, for Irish businesses and for the thousands of mortgage holders at risk of falling into arrears.

“It is also the wrong policy for the Eurozone as a whole. It will deepen the debt crises, making existing debt more difficult to manage. It will also deepen the jobs crises making it more expensive to invest.

“The most immediate impact of any interest rate rise will be to push tens of thousands of mortgage holders into arrears. Since January 500 homeowners have been falling into serious mortgage distress every week. .

“The government needs to stop burying its head in the sands on this issue and start to stand up for the interests of struggling mortgage holders, businesses and the Irish economy.”

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