Michael McGrath (Cork South Central, Fianna Fail)

The problem is that there is no competition in the mortgage market, in effect. The banks do not want to give out mortgages. The Minister has read some of the statistics in this regard. Guaranteed banks are charging in excess of 5% in interest on their mortgage books. That is the real issue. It warrants a policy intervention. The Minister will be aware of a report that was published by the European Commission in June. The Commission studied interest rate restrictions in the EU. Its report gave Ireland the lowest rating for effective policy interventions on the issue of interest rates. Many eurozone countries have intervened in various ways. Some of them have set a maximum rate that is linked to the average annual percentage rate that is being charged in the market. Germany has a different system. Various interventions are widespread throughout Europe and the developed world. In light of the rates that have been mentioned by the Minister, there is a need for a policy intervention to ensure the rates being charged by the guaranteed banks are more realistic and do not result in more people slipping into mortgage arrears.

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