Thursday, February 7, 2013

Ireland: Bankers shift debt on to backs of Irish workers and poor.

Joan Collins TD

Promissory note deal is a three card trick.

Joan Collins

Now you see it, now you don’t. Nobody should be fooled by the government spin on the deal negotiated with the ECB on the debts run up by Anglo Irish and Irish Nationwide. Not a cent of the almost €35 billion poured into these two insolvent banks has been written down. This deal seals the fact that these debts have been fully socialised, that is transferred as a burden onto the Irish people.

The government is claiming they have now closed Anglo and Nationwide. These banks closed for business years ago. They were being wound down under a special vehicle for that purpose, IRBC. This winding down will continue under NAMA and go on for several more years. The bondholders who have yet to be paid will be paid. Meanwhile some 850 bank workers are laid off overnight, most of them on moderate pay.

This is stroke politics at its worst. The debt will still be paid, but not by this government. The stroke means the government will not have to fork up €3.1 billion this March or in 2015 or 2016, if the government lasts that long. However there will be a €1 billion interest bill each year and whatever government is in power in 2038 will have to start paying off the principal.

We can now be certain that there will be no write down on the other €30 billion put into AIB, BOI, EBS and Irish Life and Permanent. A €64 billion bank bail-out has been placed squarely but certainly not fairly on the shoulders of the Irish people, and in particular on those who can least afford it.

€20.7 billion of that has come directly from the Pension Reserve Fund.  This is money that could have been used for job creation and infrastructural programmes to combat unemployment. Instead we have over 430,000 on the dole and emigration back to post famine levels. A further €12 billion for this bail-out came directly from the exchequer, almost half of the billions taken out of the economy through austerity in the last five years, targeting cruel cuts at the most disadvantaged.

This is a deal negotiated by the elite in Ireland with the elite in the EU, and solely in the interest of those elites..It will keep the markets (loan sharks and speculators) happy.  Despite their whinging Fianna Fail voted with the government in the ‘debate’ in the early hours of Thursday morning. Labour can be really proud of themselves. They have been part of the a huge transfer of wealth from the poorest to the richest.

Joan Collins is a member of the Irish Parliament, the People Before Profit TD for Dublin South Central.
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