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* Bank debt deal puts Ireland on course to exit bailout
* Agreement means little to young families deep in debt
* Progress on long-term unemployment, problem mortgage slow
By Padraic Halpin and Stephen Mangan
BORRIS-IN-OSSORY, Ireland, Feb 14 (Reuters) - A hard-won bank debt deal has been hailed by the Irish government as an historic step towards recovery, but from the unemployment-scourged ghost estates of the midlands, the feted rebound feels more like a mirage.
The long-awaited deal, struck with the European Central Bank last week following talks that had preoccupied the nation for nearly two years, sliced billions off Dublin's funding needs and saw its borrowing costs fall to pre-crisis lows.
But for Moyagh Brophy, the agreement allowing Ireland far longer to repay a costly bank rescue adds up to very little when she can only speak to her husband via Skype each night after he joined a growing line of emigrants.
"What difference does it make? People are emigrating and the rest of us struggle by. The country's a mess," Brophy said.
"It means nothing. It's mortgages that people like me care about. The banks need to be sorted out, they're responsible. People like me and my husband are paying for their mistakes."
The mother-of-two is part of a large cohort of Irish society left drowning in debt after buying family homes in the middle of the last decade, just before an enormous property bubble burst, bringing the now bailed-out economy crashing down with it.
Brophy, a native of Ashbourne, one of many Dublin satellite towns packed with modern housing estates where property values have more than halved since 2008, lost her job just before the birth of her first son five years ago.
Her husband, an engineer, lost his own job three years later before moving to London, part of a flow of over 7,000 people a month leaving to work abroad.
Finance minister Michael Noonan pledged that voters like the Brophys will benefit from less severe austerity budgets as a result of the deal that has won praise from investors, European leaders and ratings agencies.
It added to the significant momentum Ireland has built up thanks to a likely second consecutive year of economic growth - a rarity in the euro zone - model adherence to its bailout goals and a gradual but no less impressive return to bond markets.
However the disconnect between the international headlines and the reality is palpable and Noonan needs the economy to grow at greater speed to fulfil his promise. Even if it does, the impact will be minimal after five years of relentless austerity.
The Brophys' is the story of many young Irish families simply unfortunate to have bought a home at the wrong time, one in six of whom are unable to fully meet mortgage payments. Many were among the tens of thousands who marched in six cities on Saturday to protest against austerity.
"There is a huge, huge reality gap. The average household pocket will not be adversely or positively affected by this deal. I'd like to be wrong but I don't think I will be," said Stephen Kinsella, an economics lecturer University of Limerick.
"The debt deal is great but the two most important things for the average punter are excessive household indebtedness and unemployment, and the government's focus on this simply hasn't had the effect that it wants and that's a huge pity because the social cost and economic cost is very high."
"EVERYONE IS STRUGGLING"
Unemployment, stuck above 14 percent for almost 2-1/2 years, would stand at 20 percent had Ireland not become reacquainted with a long and painful history of emigration, the IMF, one of the country's bailout lenders, estimated last year.
Long term unemployment becomes a bigger issue as every month passes with almost 200,000 people, or nine percent of the labour force, out of work for more than a year. Some 20,000 of them have been without a job for over four years.
Included in that category are Rhoda Brogan, 38, and husband John, a 50-year-old lorry driver who lost his job five years ago. The pair live with six-year-old daughter, Saoirse, in one of Ireland's many "ghost estates," unfinished developments that act as a haunting legacy of the Celtic Tiger's property boom.
In the Brogan's estate in the one-road midlands town of Borris-in-Ossory, just six of the 26 houses are occupied. Those left vacant are missing windows, doors hang off hinges and loose wiring hangs from gutters and porches.
The two show houses, which tempted the couple to pay 215,000 euros in 2008 for a home that is now worth just 60,000 euros, are mere shells after looters gutted them for radiators, carpets and any other fixtures of any significant value.
It is little surprise then that they too find little comfort in a bank debt deal that puts the country on course to emerge from the strictures of its 85-billion-euro bailout later this year but offers nothing tangible for those struggling the most.
"I don't know what difference the deal will make to the ordinary person. Everybody is struggling and everyone is counting every last penny. Even to keep the light on and the heating on is a struggle," Rhoda Brogan said.
"I really don't know what's going to happen because this can't continue. Something is going to break."