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When a central bank raises interest rates, the decision doesn't land equally on everyone. It travels through the financial system — through banks, mortgage contracts, bond markets — before it reaches ordinary households. During the ECB's 2022–23 tightening cycle, an Irish household with a tracker mortgage saw their monthly repayment rise by over €600. A German household with a fixed-rate mortgage paid around €35 more. Both live under the same central bank and the same rate decision.

Irish households don't just pay more than German ones during ECB tightening cycles — their disproportionate payment is part of what makes it possible for German households to pay less. Because Ireland's mortgage architecture transmits ECB rate rises so directly into household spending, Irish households do more demand-destruction work per basis point of rate rise. The ECB reaches its inflation target without having to raise rates as high as it would if everyone transmitted as slowly as Germany. The reward is shared across the union, but the cost was not.

This structural subsidy — from high-transmission to low-transmission economies — was never negotiated, never disclosed, and cannot be resolved by market forces or by any single national central bank. The covered bond infrastructure that would reduce Ireland's exposure barely exists and would take decades to build. The outstanding stock of tracker and variable mortgages will remain exposed until the 2040s regardless of what policy is adopted today. Addressing this requires institutional action at the scale of the problem — which is eurozone-wide.