Irish banks should follow the lead set by those in the UK and Spain by allowing a moratorium on mortgage repayments for those who now find themselves jobless, the country's largest union, Siptu, said today.
With unemployment now predicted to rise to 12 per cent, the union said that the numbers suffering from mortgage distress is also set to rise, and in order to avoid repossessions, banks should provide a break for
troubled homeowners for the duration of the unemployed period or for a maximum of two years.
According to the Siptu plan, there would be a cap on the eligible mortgage set above the average Dublin house price in the year of purchase, and at the end of the period, instead of adding the total deferred payment to the mortgage liability, the interest component should be "forgiven by the relevant bank".
The union also called for an urgent recapitalisation of the banks, but reiterated its opposition to private equity. Instead, Siptu said that recapitalisation should be achieved by a preference share issue by the Irish state, with the funds coming from the National Pension Reserve Fund.
Siptu also asserted that the public sector is being used as a "scape-goat" for the country's current economic woes, and vigorously defended its contribution to the economy.
In its economic review Siptu also called on the Economic and Social Research Institute (ESRI) to publish an immediate re-evaluation of its now "seriously out-of-kilter" medium-term employment forecasts, so as to
provide as early in 2009 as possible a "drastic but realistic revision of its medium term employment projections".
