VIEWPOINT: BY PHILIP McFADDEN, DONEGAL ACTION AGAINST AUSTERITY
At the EU Leaders Summit in Brussels on 22nd November 2012, the Taoiseach said that there would be no bank debt relief for Ireland before the end of the year.
Yet again Enda Kenny proves himself to be an incompetent negotiator. The ‘elephant in the room’ is the bondholders, and under this odious debt Ireland is drowning!
In the years subsequent to the introduction of the euro, Irish banks and building societies, finding themselves with access to cheaper money, began to borrow by the billion.
Those billions were loaned out by the major European banks and financial institutions and were in turn used by the Irish banks and building societies to fuel a property bubble that became more inflated with every passing year until eventually, in late 2007/early 2008, the bubble burst.
In such circumstances what would normally happen is that the lender banks would take a hit or a ‘haircut’ – as it is known as in the banking industry – and move on to the next investment opportunity. This is how capitalism works. An intrinsic element of the business they’re in is making money from money.
Not on this occasion. At the behest of the ECB/EU, what had been a system founded in risk/reward, profit-and-loss became simply profit-and-reward.
In September 2008 our government was coerced by a legion of representatives from the Irish banks into blindly providing a ‘blanket bank guarantee’ (Brian Lenihan and Brian Cowen, then Finance Minister and Taoiseach respectively were told the total exposure was ‘only’ €5bn). Then, as that was expiring, it was the ECB strong-arming both Cowen’s government and then the Enda Kenny-led government that succeeded them into continuing to transfer that bank debt to public shoulders.
Until now that bank bailout has cost the Irish people €69.6bn in direct input to the banks (NAMA’s €5.5bn contribution included). This is not the full story.
Indirectly also we are continuing to bail out our banks and their failed bondholders. In 2012 the bonds paid by our banks amounted to a total of over €20bn; in 2013 it will be another €17bn; in the four years 2012/13/14/15, it will amount to over €55bn, money being bled on a weekly basis from a dying economy.
Part of that comes from the bailout money but part of it we’re also paying, on an on-going basis, through the newly imposed bank charges, through the high interest rates, as we own every bank except Bank of Ireland, in which we have a large share.
Meanwhile normal commerce is almost entirely suspended in Ireland, the banks we have so expensively ‘saved’ because – we were told over and over we needed a ‘functioning banking system’, are functioning only if you’re a bondholder.
This was private debt – every cent of it. We, the Irish people, didn’t borrow it, had no liability for it. It was not our debt then; it’s not our debt now and will never justly be our debt. It was imposed on us without us ever having been consulted.
We need to retrieve that money starting with the Promissory Notes –they should be destroyed. We must also stop paying the bank bonds – secured or not. The ECB must be informed that we’re not paying them a penny of any money we had to borrow to bail out our banks’
Some would argue that we can’t do that as we now have a legal obligation to pay all of that money – which begs the question ‘where were they when all that odious debt was being imposed on us?’
And if something can be imposed, then equally it can be ‘un-imposed’.
The people are sick of this austerity and will not tolerate it anymore. The poor and the working poor have to bring Fine Gail/Labour to account. We have to react before it’s too late. Protest, write letters or e-mail your local government representatives. We, the people of Ireland, have to confront the Fine Geal/Labour government representatives. We should not forget that a Fianna Fail/Green government caused this mess.
We have to get radical, we have to get vocal, we have to protest for our rights.
By paying the bondholders we are destroying the HSE, home help service and child benefit. As a result of paying the bondholders our rural schools are being closed down, our rural Garda stations are being closed down and our rural libraries are being closed down. Paying the bondholders will lead to the centralization of the Coast Guard service which will jeopardise the lives of our already demoralized fishermen.
We do not need Germany and France to tell us we are a ‘special case’. This is patronizing and shallow rhetoric. We don’t need ‘improved terms and conditions’. This is odious debt which will be passed on to several future generations – annual reparations for a private war between private banks. We need a debt ‘write off’ and we need it NOW.
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