Monday 12 December 2011

The Dirty Dozen w/e Dec 18th 2011

At what stage do we start to make the connection between the fact that EBS has such a high mortgage interest rate and its need to pay back its fast-maturing bank bonds? Five bonds for an aggregate of €51m on Dec 16th alone (details below), any wonder they're gouging already under-pressure Irish homeowners?

At what stage do we start to make the connection that with €55bn in bonds maturing over the next four years, the Irish banks are in no position to lend money to ANYONE in this economy now, or at any time in the forseeable future? And where do ye think that €55bn will come from - from bank profits? Even in the best of times that scale of profiteering would have been pretty ambitious, but now? So, ye think we're gone past 'injecting' funds into the banks?

At what stage do we make the connection between the billions the ECB is loaning to our Central Bank and the billions our banks are paying out on those failed bonds?

At what stage do we start to question the logic of taking on a €72bn debt, which with interest will easily surpass the €100bn mark, JUST TO ALLOW US make those short-term borrowings from that same ECB?

We were going to struggle anyway to make ends meet on our annual budget but the bank bond debt burden is crushing us. When will we zone in on the very specific questions above, and STAY on those questions until we get the relief that is long overdue?


  1. Forgive me if I missed it, but...

    At what stage, are you going to address the difference between equity capital, bonds and deposits ?

    Specifically, why should a deposit of €100 million be protected, but a bond should be "burned" ?

  2. Apologies Fergus for not getting back to you sooner, all this is done part-time.

    In answer to your query, at NO stage will I address the difference between equity capital, bonds and deposits; this campaign is about the difference between right and wrong, and it IS that fundamental.

    In a series of for-profit commercial ventures between consenting adults in private financial institution, the original bank bondholders took a gamble that failed; for that failure, for their poor judgement, they should have paid. Instead, in a perversion of the normal course of capitalism, the ECB blackmailed a weak government (ours) into paying those failed private bonds, in full and with double interest (the 'coupon' to the original bondholders, the interest on the new loans we'll have to take out). That action is wrong, all wrong; we are right to protest.

    Beyond that there are all kinds of subsidary arguments, including of course the legitimacy of the original blanket bank guarantee, given under false circumstances; there is also the primacy argument, who could gets paid what first in a haircut scenario, under which would comes your question.

    I'm not concerned with any of that. For me, it's just these damned bonds, and the fact that without ever even being asked, we have been saddled with this burden.