Irish Roman Catholic priests in the country’s second-biggest diocese took pay cuts of about 10 percent after church investments in bank stocks dropped as much as 7 million euros ($10 million). The Killaloe diocese, which covers parts of the midlands and west of Ireland, cut salaries by between 8 and 12 percent, after shares fell and bank dividends were eliminated, Willy Walsh, the Bishop of Killaloe, said in an interview with Ireland’s RTE radio today.
Ireland’s ISEF Index of financial stocks has fallen more than 90 percent from its February 2007 peak, as the banking system last year came close to collapse after real-estate prices tumbled and credit markets froze.
The government has nationalized Anglo Irish Bank Corp., and pumped 7 billion euros into Bank of Ireland Plc and Allied Irish Banks Plc to help save the lenders as bad debts surged.
“All of us thought that bank shares were a safe as possible place to put money,” Walsh said. “Obviously in hindsight, they weren’t.”
Legacies Lost
Priests in Killaloe earn between 20,000 euros and 25,000 euros a year, the Irish Times reported today, citing Walsh.
A spokeswoman for the Catholic church in Ireland said it doesn’t keep data on priests’ earnings and that payments are a matter for individual dioceses.
Around 120 priests work in the diocese, which covers most of County Clare and parts of Tipperary, Offaly, Laois, and Limerick.
There are 58 parishes in the diocese, with a population of about 122,000, according to its Web site.
Walsh said he wasn’t disputing reports that the church’s investments declined in value by as much as 7 million euros, adding the capital had come from legacies left to the diocese.
Before the stock market decline, the diocese’s shares were worth about 9 million euros, the Times said. They are now worth about 2 million euros, it said.
In Northern Ireland, religious orders have also been hit by the global financial crisis. In November, the Belfast-based Presbyterian Mutual Society, a church-backed lender, went into administration after a run on its deposits, owing its 9,500 members 309 million pounds ($506 million).
Presbyterian Mutual wasn’t covered by last year’s U.K. bank guarantee plan, which sparked an “unprecedented” run on the lender, according to administrator Arthur Boyd & Co.
“This is causing real distress for people, especially those who have deposited their life savings with the society,” Stephen Lynas, a spokesman for the Presbyterian Church of Ireland, said by phone today.
The church’s annual meeting in Belfast was picketed by savers last month.
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Source (Bloomberg)
SV (ED)