DealBook: A Call for a Write-Down on Irish Debt

Peter Morrison/Associated PressA branch of the Bank of Ireland in Dublin.

DUBLIN — A major write-down on Greek debt appears to be inevitable. But what about Ireland?

Bailed-out Irish banks continue to pay interest to their bondholders on 75 billion euros in debt — about half the country’s gross domestic product — and despite Ireland’s improved economic performance over the past year, many here believe that these institutions should suffer the same haircut that the banks holding Greek debt are expected to absorb.

“We need to write this stuff off,” said Peter Mathews, a voluble banking and real estate consultant who was recently elected to the Irish Parliament on a robust bank-bashing platform.

Mr. Mathews estimates that if you include household and nonfinancial corporate debt, Ireland’s total debt burden is a shocking 490 percent of its G.D.P. — which, he claims, makes Ireland the most indebted country in the world.

Of course, such a figure is gross, and does not take into account the significant assets that households and corporations have.

But it is arresting nonetheless, and it is what fuels his anger at the thought of banks continuing to pay bondholders even though they were the ones that brought his country to the verge of bankruptcy.

For months now he has been pestering the government to take action on the matter and he even went so far to corral a perplexed Herman Van Rompuy, the president of the Europe Council, and make the case to him on a recent trip he made to Dublin.

“Japan has lost two decades of growth — what the hell are we going do with debt of 490 percent of G.D.P.,” Mr. Mathews said. “I have to say I am getting ready to take off my shoe just like Nikita Krushchev did.”

While his view may be a popular one in a country that reviles its bankers, there is little sign that the Irish government will run the risk of angering the European Central Bank and investors by proposing such a measure — especially now as its bond yields have nearly halved to about 7.8 percent from 14 percent this summer.

Nonetheless, Mr. Mathews says he will stay on the case.

“There are losses out there,” he said. “Let’s face up to them and get them financed by countries that can afford it, like Germany.”

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