New bankruptcy law is the only lifeline for people drowning in debt

GOVERNMENT indifference to defaulting debtors is abundantly clear. The composition of the Working Group on Mortgage Arrears excluded external expertise, comprising only civil servants and bankers.

Insiders, primarily concerned with bank survival, concluded in the Keane report foremost priority was to ensure mortgagors discharged their debt obligations. Fear of non-compliance with debt repayments spreading to those who could pay dictated that debt forgiveness was unacceptable. They answered a question nobody asked. Who inserted “blanket “into the unsustainable debt debate?

Obfuscation, denial and delay are core official tactics deployed to reject meaningful assistance for those trapped in unsustainable situations. These problems will not go away. Layers of debts make this recession different to those of the 1930s, 1950s and 1980s. Ireland is more indebted cumulatively at every level, than any other state in the advanced world. Our sovereign debt represents 137% of GNP. Household debt amounts to 147% of GNP. Personal and corporate debt is greatest at 210% of GNP. Even with miraculous economic recovery and exponential growth, repayment on all these loans will suck years of cash out of 1.8m workers and 1.6m households. Combined total of debt at 494% of GNP contrasts with Greece at 273%.