THERE must be a contrarian gene in the Honohan family. Last week, Ed rocked the Four Courts when he launched a broadside on Ireland’s debt and bankruptcy laws. He courted media publicity.
Last November, brother Patrick rocked the Fianna Fail/ Green coalition when he let the cat out of the bag about the EU/IMF taking over the nation’s finances.
On both occasions, the Government would have preferred if the Honohans had kept their own counsel. Neither was for muzzling. Let us salute the Honohans as unlikely heroes of the people.
They are both highly influential civil servants. Ed is Master of the High Court. Patrick is Governor of the Central Bank, two positions not normally associated with high-wire media appearances.
The last government was furious with Patrick for his show of independence when he rang RTE’s Morning Ireland to demand a platform to tell Irish people the truth.
Ed caused a similar furore last week when he raised the spectre of debt forgiveness for people with crippling debt. Ministers surfaced fast to dismiss the Master’s most radical suggestion as a non-runner.
Maybe, but both men were speaking with uncontestable authority. Patrick is the most pivotal figure in Ireland’s financial crisis. Every word he utters carries weight.
Ed has his finger on the pulse of Ireland’s personal-debt problem. As Master of the High Court, he sees the turnover and social consequences of debt disputes.
While neither brother is media-shy, they are not self-publicists, but sometimes the media is the most effective means of forcing action. Especially if you are a frustrated contrarian civil servant confronted by a gross injustice.
The Master was horrified by what he sees in his daily routine. He hears many of the initial applications from the banks pursuing borrowers for unpaid debts. His chosen language in response to what he has seen was arresting.
From his unique perch in the High Court, Ed Honohan accused the banks of driving borrowers to suicide. Lethal language, but convincing nonetheless.
Ed was particularly incensed by the banks’ habit of pursuing hopeless debtors “to the bitter end” so that bankers could write off the debt for tax purposes. So an accountancy exercise for the banks can be the cause of a borrower’s suicide. Perhaps the banks had an explanation?
Apart from a blanket denial, their defence was lamentable. The Irish Bankers Federation emerged accusing Ed of being both ” inflammatory ” and “too emotive”.
Presumably the Master’s response to the bankers’ charge is a confident “guilty as charged, your Honour”.
When borrowers are being forced to commit suicide, it is indefensible to rubbish their misery, painting discussion of it as “too emotive”. When people are ending their own lives because of debt it is high time to be inflammatory. Yes, let us pour petrol on the problem. The more the better. Ed has provided the petrol.
And he has lit a bit of a bushfire. The fire has spread quickly, although the Government is trying to fight the flames.
A debate about personal debt has already taken off, with cabinet ministers frantically promising early reform of the bankruptcy laws and overdue changes in the personal insolvency regime.
On Thursday, Tanaiste Eamon Gilmore gave a rapid commitment that the Government would act urgently to alleviate the plight of those with mortgage arrears. Put the sudden burst of activity down to Ed. Not bad for a civil servant.
Not before its time, either.
Most telling of Ed’s revelations was that he had come to the conclusion that the banks expected to win all the personal-debt cases. It was as if the banks see the courts as mere vehicles to persecute their bankrupt clients.
Bankers have become used to winning. Ireland’s attitude to debt and bankruptcy is ante-deluvian. We are indoctrinated into branding debtors as bad and creditors as the wronged parties in personal-debt disputes.
We need to reverse our prejudices. Bankruptcy still carries a stigma. It remains light years longer than our neighbours in the UK and US before bankruptcy can be discharged. Of course, bankruptcy can sometimes be a reflection of recklessness, but in other cases it should be worn as a badge of honour.
In Ireland, entrepreneurs with bottle to burn can go bankrupt, only to be thrown onto the business bonfire because of one misjudged project. We should forgive them, recognise their talents and allow them to start again almost immediately. Many have rare flair and have huge potential to provide jobs.
Ed is calling for a bit of “burden sharing”, a phrase not unknown to his Central Banker brother operating in a higher sphere. Just as there is a responsibility upon the French and German banks who lent so recklessly to Anglo and AIB to take a hit, there is an onus on those Irish retail banks who shovelled out money to victims of the mortgage frenzy. Both parties in a mortgage contract are to blame. Both should be accountable. Both should pay their share.
Why should the banks, who misjudged the value of so many mortgaged properties, not share the burden with those now condemned into negative equity? The bankers got it wrong too. Perhaps they should be forced to accept equity — instead of debt — in the mortgaged house when the borrower falls into arrears.
The alternative is a continuation of the current hell hole of piling on more debt, followed by repossessions. And the final tragedy, according to Ed’s credible version, is possible suicide.
Did anyone ever hear of a banker committing suicide?