Tuesday 28 August 2012

THE DIRTY DOZEN w/e Sep 2nd 2012

'We affirm that it is imperative to break the vicious circle between banks and sovereigns.'

That was the opening line in the now-famous EuroZone leaders' statement after their meeting at the end of June. Two months later and back in dear old Ireland that circle is as vicious as ever.

On September 3rd - this coming Monday - Anglo Irish Bank (you can have your IBRC, a name-change won't disguise who and what they are) will pay a bond of €600,000,000.

On Monday October 1st, just four weeks later, AIB will pay a bond of €1,000,000,000.

Between times Bank of Ireland and AIB will pay a few smaller bonds, amounting to a 'mere' €14,500,000; afterwards, and per the table below, before the next 12 bonds have been paid our banks will have paid out almost an additional €2bn.

The argument will be made in the media - if they bother to cover this at all, which they probably won't - that many of these bonds are now guaranteed (the Oct 1st billion-euro bond is not). So what? 

In the first place this is still money being sucked from the Irish economy, which partially explains why our two so-called 'pillar' banks are in such dire straits.

In the second place, why were those now guaranteed bonds taken out in the first place (pardon the convoluted question)? Look at the Anglo €600,000,000 bond - it was taken out two years ago, Sep 3rd 2010, at a time when Anglo was already well and truly a zombie bank. For what? To pay bonds, that's for what, just another version of the odious Promissory Notes.

We must stop this madness. We're being warned of possible street-light turn-off, of possible ambulance shortages, because of a shortfall of €60m in the Household Charge collection; James Reilly has issued a circular in the Dept of Health alerting them to possible cuts in the HSE for next year of over €900,000,000, assuring them that 'services won't be affected'. How the hell can the already hugely disrupted services not be affected  even further by a cut as deep as this.

And meanwhile, our banks - all of which we own, bar one, Bank of Ireland, in which we have a one-sixth share - continue to pay out billions in failed bonds. The vicious circle, the vortex into which we've been thrown by the ECB - when do we start to fight our way back?

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