Local view for "http://purl.org/linkedpolitics/eu/plenary/2016-05-12-Speech-4-519-000"
| Predicate | Value (sorted: default) |
|---|---|
| rdf:type | |
| dcterms:Date | |
| dcterms:Is Part Of | |
| dcterms:Language | |
| lpv:document identification number |
"en.20160512.33.4-519-000"2
|
| lpv:hasSubsequent | |
| lpv:speaker | |
| lpv:spoken text |
"Mr President, from an Irish perspective, I think that today’s discussion on foreign currency loans is an important one. At a time when ECB rates are at historic lows since the time of the financial crisis, Irish people find themselves in the situation where Irish variable mortgage rates are significantly higher than the EU average. Some banks are charging up to 4% in Ireland, while the EU average is around 2%. It is a situation about which my Irish colleagues and I have written a cross—party letter to ECB President Mario Draghi, and we hope which will get a positive response.
But it is a discussion today that reminds me of an additional reason for concern, as an Irish public representative, related to our high interest rates. To a lot of Irish people, a foreign currency mortgage may look like a great deal. Lower interest rates, longer maturities; it seems like a great idea. An Irish person on a foreign currency mortgage could save an awful lot of money in the short term. However, this is a gamble that must be looked at from a long-term perspective. Despite early savings, there is a huge risk that one will have to pay more in the long run – potentially a lot more. For this reason, I feel there is a need to maximise the amount of information that a bank is required to provide to consumers interested in such a loan, and I call on all Member States to ensure this happens.
I think most of us here would agree that if loans are taken out in a foreign currency, the economy becomes less stable. When there is a high share of foreign currency loans in the economy, households become very sensitive to fluctuations in the exchange rate, and this significantly affects consumption and housing demand. The Central Bank responds to fluctuations in such output, and therefore more foreign currency loans will lead to stronger adjustments in short—term interest rates. This in turn makes the exchange rate, and therefore borrowers’ expenditure, even more volatile. Additionally, with deep exchange rate depreciations, we have a surge in servicing costs expressed in domestic currency, and this could bring mass defaults and lead to a systemic banking crisis. I feel this should even be a warning sign to the United Kingdom voters ahead of the Brexit referendum. If there is to be a sharp depreciation of sterling, as is predicted, should Brexit occur, United Kingdom banks would be forced to offer foreign currency loans and possibly bring increased instability to their economy at a time when they would need not need any more. In this regard, I welcome the Commission’s recognition of the problem of irresponsible lending and borrowing, including the irresponsible behaviour by market participants that blighted Europe, and my own country in particular, before the financial crisis. I commend them on the work they are doing to correct these problems.
Finally, I want to say to the Commissioner that you are doing good work and we appreciate it, and to keep it going. I call on Member States to implement fully the provisions laid out in the Mortgage Credit Directive. To European consumers I say, when it comes to currency loans, beware of the wolf in sheep’s clothing"@en1
|
| lpv:spokenAs | |
| lpv:unclassifiedMetadata | |
| lpv:videoURI |
Named graphs describing this resource:
The resource appears as object in 2 triples