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Welcome to Ireland, where mortgage payments are apparently optional

Among the many nasty side-effects of the European debt crisis, bigotry’s return to pleasant conversation may be the least-commented upon, and the nastiest.

Granted, few actually say Germans are power-hungry, scatologically-obsessed skinflints. And it’s only usually hinted broadly that Spaniards are hot-blooded, undisciplined spendthrifts; and Greeks shiftless tax-dodgers. Those people, you know?

Likewise, Ireland’s debt-fueled housing boom and banking bust—which eventually dragged the entire country under—is often dressed in ethnic livery. The Irish went on a bender and they’re dealing with the hangover. They’re guilty, have confessed their sins and willing to years of painful austerity budgets as penance.

That last bit, the submission to painful remedies demanded by foreign authorities, has earned Ireland something of a starring role in the ongoing European morality play: that of “the good debtor.” (“Greece has a role model and the role model is Ireland,” Jean-Claude Trichet, former chief of the European Central Bank, famously said back in March 2010.)

But this overlooks a few uncomfortable details. Ireland’s homeowners are the European and perhaps the world champions in not repaying mortgages. The country’s national debt has increased fourfold in about as many years. Its banking system is being kept afloat by borrowing from Europe. And while a change in the law may soon force the banks to start cleaning up their balance sheets, nobody is quite sure how bad a mess they will find there when they do.

Welcome to Ireland, where the hangover is in fact just beginning.

Rest here…

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