The central bank governor said there was nothing in the system to prevent banks from imposing further payment breaks on Covid-19-affected borrowers.
After the end of September, banks will no longer offer payment intervals as corona virus restrictions take effect.
Speaking on RTE’s Brendan O’Connor program, Gabriel McLeof said that if borrowers are still struggling, they should contact the lender and have an early conversation about the challenges they face.
He said lenders need to start thinking a lot about the individual’s circumstances and how to support them.
He said there was nothing in the system to prevent banks from allowing more payment intervals, but such intervals were needed instead of system-wide breaks to meet an individual’s needs.
He said it was in the interest of the borrower and the lender.
Makhlouf said: “If borrowers are still struggling to repay their loans, they should contact their lender and discuss the challenges they face in advance.
“There is nothing in the system to stop them.”
He said the devastation caused by Kovid-19 across the country would affect the economy and the damage was very serious.
He said the early closure of the Pandemic in March, April and May was the lowest point of economic activity this year.
Makhlouf said: “If we are going to go back to a big lockdown, we are going to go back to the world we were in in April, where businesses were hit hard, job losses were hit in a big way, employees were hit hard.”
He said that apart from stopping economic activity, a complete lockdown would also affect confidence.
He said: “In addition to the complete lockdown, I think it will have a huge impact on confidence, in addition to stopping economic activity.
“People’s confidence in the future, really in the well-being of the people. I think one issue at the moment is the mental well-being of the people and I think as a society we need to think very hard about it.”
Makhlouf said that we are now gradually recovering from the initial effects of the Pandemic.
He said they would publish the latest forecast on the economy in the next ten days.
He said we had seen a recovery from where the situation was in April, but added that local lockdowns in various parts of the country were “certainly not helping”.
He said he did not think the country should look at any kind of austerity in the coming years and that the result could be avoided if the current situation was handled well.
He said it was absolutely necessary for the government to do what it is doing now in relation to borrowing, but at some point the government needs to include its own books in a “better order”.
He said: “If we focus on protecting the productive capacity of the economy, growth can be used to address this additional debt as opposed to using austerity.”
One of the biggest concerns from an economic point of view is that the loss of skills of pandemic people and the loss of closeness with the workforce can lead to the creation of “scars” such as long-term unemployment.
He said they want to avoid such repercussions and should focus on focusing on it.
If there is no pandemic, there are many businesses out there right now that would be practical.
McClouf said he sympathizes with those businesses and needs to support them.