ECB interest hike devastating to families – Doherty
Speaking today after the ECB announced that it is to increase its interest rate to 1.25%, Sinn Féin Spokesperson on Finance Pearse Doherty said that this increase will come as devastating news to families who are already struggling to pay bills.
Deputy Doherty said:
“In the grips of a grave financial crisis that has hit each and every person in the State, which has resulted in reduced spending power and an increased debt burden, today's announcement comes as a devastating blow.
“Families who are already overburdened trying to cope with mortgage payments and other bills will be worse affected by this decision.
“With over 40,000 people in mortgage arrears for in excess of 3 months, today's decision will result in more mortgages and more people coming under pressure. But there is nothing forthcoming. Although today’s interest hike by the ECB was flagged 4 weeks ago, this Government has no plans to deal with this personal debt crisis.
“Under the adverse conditions of the stress tests it was estimated that the four banks would lose €9.5 billion on residential mortgages in the next 3 years.
“Many people have already had to cope with interest rate increases, as banks are charging their customers higher interest rates than they are paying on the financial markets.
“Today's "one size fits all" move by the ECB is not going to help the Irish crisis. While it may benefit the larger European states, this is not the course of action best suited for Ireland at this time.
"This will cause a chain reaction. Mortgages will become more expensive, more people will default and cause greater losses to banks who will react by penalising all their customers. This cycle needs to be broken.”