Wednesday, 16 July 2014

SUMMER SUMMARY - A CRITICAL TIME



Going to be out of action for a few weeks (date with a knife tomorrow, July 17th, old war-wounds that couldn't be ignored any longer!) so a quick update on the Ballyhea campaign.

EUROPEAN ELECTIONS

The recent European elections threw up a very positive result for us, the election of three independents (Luke Ming Flanagan, Nessa Childers and Marian Harkin), now joined by Brian Crowley, all of whom have stated unequivocally that they will be working towards the alleviation of the bank-debt burden on Ireland. Already, since the election, we've been in touch with all those MEPs, have met with a few, and in the coming months we will be working with them on the bank-debt campaign.

Sinn Féin also had a very successful European campaign, returned four MEPs (Liadh Ní Riada, Matt Carthy, Lynn Boylan, Martina Anderson), and Sinn Féin too have indicated that bank-debt writedown for Ireland will be a priority. That's eight Irish MEPs now actively campaigning with and for us (the people, not just this campaign group), a quantum improvement on the previous Parliament.

PLANNED MEETINGS

On Friday week (July 25th), Central Bank governor Patrick Honahan has agreed to meet a delegation which, along with ourselves, will include representatives from those MEPs, plus representatives of the Technical Group in the Dáil.

At the moment we are also pursuing meetings with a) the ECB (accompanied again by elected representatives from both the national the European Parliaments), b) the new chair of ECON and c), representatives from all the major groupings in the new Parliament.

IT’S NOT TOO LATE – IN FACT NEVER MORE TIMELY OR URGENT

For those who believe that it's too late to address the bank-debt, that everything is done and dusted, I can't stress enough - nothing could be further from the truth. In fact it was never more immediate, never more stark, than it is now. Why? The dreaded Promissory Notes, or more accurately, the Promissory Note bonds, the instruments used by Finance Minister Michael Noonan to transfer responsibility for payment of those Promissory Note billions from this generation to the next, and to the generation after.

PROMISSORY NOTES IN A NUTSHELL

In a nutshell the situation is this: in 2010 two Irish banks - Anglo Irish and Irish Nationwide - had entered zombie stage, had €31bn in liabilities between them and only junk assets to cover those liabilities. If they went under, however, the fear was that this would start a domino effect across a number of other deeply troubled banks and would bring down not just the major banks in the so-called core European countries (Germany and France especially), but would bring down even the euro currency itself.

To avoid this very real possibility the ECB accepted from the Irish government as collateral for the €31bn issued to those two bust banks the now infamous Promissory Notes; theirs was the final say in this and in doing so, they bent (and possibly broke) their own rules.
 
Critical to note here, this money did NOT go to the Irish people, it went to bail out those two banks and by extension, to bail out their creditors. Now, however, the ECB wants its pound of flesh. 'The Central Bank of Ireland printed that extra €31bn,' goes their logic; 'The Irish government acted as guarantor; now we want that €31bn taken back out of circulation.' 

No mention of their own role in accepting the Promissory Notes; no mention of the fact this possibly saved the European banking system, if not the euro itself; no mention of the fact that all those billions went to banks, not to the people. Just this insistence that the entire burden must be borne by us, the Irish people.

Of course we don't have that €31bn (we're broke like - in fact we're over €200bn in debt already!) so, we're forced to borrow it.

THE PROMISSORY NOTE BONDS

We're doing this in the form of sovereign bonds and we're doing it in stages. This year the Central Bank will sell a bond for €500,000,000. That's almost exactly what the government expects to raise from water charges for the year; it is also the projected shortfall in the HSE budget for 2014, a shortfall that will necessitate further cuts in an already critically-stretched health service.

What will the Central Bank do with this €500,000,000 - invest in our water services, in our health service? Neither. It will destroy it, every last cent, the ECB insisting on its pound of flesh.

WORSE TO COME

As noted above however, that is merely the first step. Next year, another €500,000,000 raised by the Central Bank, another €500,000,000 destroyed, then likewise for another three years. And it gets worse.

For each of the five years after 2018, €1,000,000,000 raised by the Central Bank, then destroyed; for each of eight years after 2023, the figure increases to €2,000,000,000, raised and destroyed; finally, in 2032, €1,500,000,000, making a total of €25,000,000,000.

These are telephone numbers, I know - even beyond telephone numbers. On their own they're difficult for people to take in but even more difficult for people to absorb, the fact that all this money, all those badly-needed billions, will be destroyed.

The story doesn't even end there: As each of the bonds are sold, we start paying the interest to the new bondholder, and we pay it annually for the lifetime of that bond. Then, when the bond 'matures' (and the first chicken comes home to roost in 2038), we have to pay the principal, the full original sum of each individual bond, again a total of €25,000,000,000 - again a figure and a concept almost impossible for people to grasp.

CRISIS POINT – A CALL TO ARMS

But that is the plan, that is the vaunted Noonan Promissory Note 'deal', that's how 'gone' those Notes are. The debt remained, in its entirety; the billions are still destroyed, in their entirety; all he has done is this – rather than challenge the ECB on the legitimacy or even the morality of the debt itself, he shifted the payment burden from this generation to the next, and the generation after. Would you, as an individual, do that to your kids, and to their kids?

It can be stopped. It can be stopped now. It can be stopped without cost. It can be stopped without consequence (that money is already in circulation; taking it out of circulation now will have no effect in Europe, it WILL have an effect here).

That's why this campaign is now so critical, that's why there has never been such urgency. The sale of those bonds must be stopped and for this, we need a coming together – of the media, of our politicians local, national and European, of our stars of stage, screen, music and sport, of our people in every organisation at home and abroad. Because this affects us all.

Regards, Diarmuid O'Flynn.


Thursday, 10 July 2014

THE MINISTER AND HIS MINSTREL BOY



The following is a transcription from an interview conducted by Pat Kenny with Finance Minister Michael Noonan on RTE radio on February 8th 2013, a couple of days after Minister Noonan’s lauded Promissory Notes ‘deal’.

Pat Kenny: What changed, why did the ECB then change its mind about the whole principle of this which I think was described –  Phillip Boucher Hayes reported from Frankfurt or he was talking to people from Frankfurt, they described it as 'barely legal'.

Michael Noonan: Well I don't think that's right, you see the legal people would say that the existing Promissory Note arrangement was totally contrary to, ah...

PK: Was illegal?

MN: Totally, you know, so any –  I mean my argument all the time was...

PK: So it's an improvement in its legality?

MN: Yeah, I mean some of the bank people were saying to me 'Look, what you're saying is illegal'; I used to say to them 'It's an awful lot more legal than what you agreed three years ago!'

At this point they both had a little laugh, the Minister and his Minstrel Boy; that laugh was at our expense.

      A question that simply screams out from the above exchange:

  • When Michael Noonan admitted the original Promissory Notes arrangement was totally illegal, why didn’t Pat Kenny – the highest-paid broadcaster on RTE – not ask Minister Noonan why he hadn’t challenged that legality in court before transforming those Notes into sovereign bonds, effectively condemning generations of Irish people to 40 years of debt slavery? Hell, why didn’t Michael Noonan challenge the ECB, why didn’t he even ask the ECB for debt writeoff?

When the narrative of this entire sorry period in our history finally comes to be written, that little exchange above will loom large. To ease the budgetary pressure on his own government for the remainder of its tenure, Michael Noonan took a debt he believed totally illegal and rather than face down the ECB, shifted the entire debt burden, plus interest, to the shoulders of his own nation’s children and their children. And was lauded and applauded for it by those such as Pat Kenny above.

In Ballyhea and in Charleville, in Ratoath and a few other places around the country, we continue to protest, we continue to campaign, Sunday after Sunday. We can still reverse this. Join us, write your own piece of history.

Regards,
Diarmuid O’Flynn.

Tuesday, 24 June 2014

TWO YEARS ON FROM ENDA KENNY'S 'SEISMIC SHIFT'



 LETTER TO OUR EDITORS
Ballyhea
Co Cork
June 25th 2014
Dear Sir/Madam;

'Lions led by donkeys'; nearly a century on, that's how the British infantry (including tens of thousands of Irish) and its officer corps are remembered from the First World War.

I wonder, a century from now how will we and the current Irish political leadership be remembered?

Cast your mind back two years ago, to June 28th 2012 and yet another Eurozone summit meeting, the short statement issued at its conclusion on the separation of bank debt from sovereign debt, which included the following: 'The Eurogroup will examine the situation of the Irish financial sector with the view of further improving the sustainability of the well-performing adjustment programme.'
 
Remember Enda Kenny's 'seismic shift' boast – ‘I’m a hard grafter and, as some of them found out, they shouldn’t tangle with me too often’? Remember Eamon Gilmore's 'game-changer' bombast?
Two years on, what has shifted, what has changed?

For starters, we've had Michael Noonan's acclaimed Promissory Notes deal, Notes Michael himself described in an RTE interview as ‘illegal, totally' but which now sees that €25bn of disputed debt transformed to sovereign bonds. 

The first of those bonds are sold this year, €500,000,000, that money then destroyed by the Irish Central Bank; €500,000,000 a year in fact for the next five years, borrowed and burned, then €1,000,000,000 a year for the following five years, €2,000,000,000 a year for eight years and finally, in 2032, the last bond, €1,500,000,000. 

A total of €25,000,000,000 that had been used at the behest of the EC/ECB to bail out two bust banks, now borrowed by this broke and broken country and burned at the behest of that same EC/ECB, all set up by a compliant, obeisant Kenny/Gilmore government without even a murmur of protest. They didn't even ask, never mind confront.

Then there's the vaunted ESM from which we were to receive the billions refund of the 'legacy' bank-debt arising from the June 2012 statement - what has actually happened there? Well the fund has been established and Ireland has already contributed a €1bn share to that, which of course we also had to borrow and on which we are now paying interest. What have we received? How much 'legacy' debt relief? Not a single cent.

The actual legacy of this government, the legacy this generation leaves to those who will follow us, is debt piled on debt, 40 years of debt-slavery to our new European masters, all uncontested.

In Ballyhea and Charleville we have been campaigning since March 6th 2011 against this debt imposition, this sovereign surrender. This Sunday in Charleville at 10.30am, week 174, we're joined by three of our recently elected MEPs, Luke Ming Flanagan, Nessa Childers and Marian Harkin. New leaders, same cause; lions needed.

Regards, Diarmuid O'Flynn.

Thursday, 29 May 2014

TWO BIG LIES ON THE PROMISSORY NOTE DEAL



In the course of debates with the Fine Gael candidates during the recent election the same two points were raised again and again by all three of Seán Kelly, Deirdre Clune and Simon Harris (Phil Prendergast of Labour didn’t bring it up), two points that both Fine Gael and Labour spokespeople also brought up again and again over the last year and more. 

Both fall well short of the full truth.

‘THE PROMISSORY NOTES ARE GONE’
In February last year, and in his own words of explanation to the Dáil recently, Michael Noonan ‘exchanged’ the Promissory Notes for Sovereign Bonds. Only the actual notes – the paper on which was written that debt – was destroyed; the remaining €25bn debt on the Promissory Notes remained exactly as it was, in full. So yes, the notes themselves are gone; the debt they were covering is still there, every cent.

‘WE SAVED THE COUNTRY €20bn’
If you buy an item reduced from €30 to €10 you have saved yourself €20; if you buy that same €30 item for €10 but have the remaining €20 paid over the next three years with interest, such that it will now cost an additional €60, that is NOT a saving, it’s deferred payment. 

In essence that is what happened in the Noonan Promissory Notes deal. As explained above we have exactly the same debt; under the old arrangement the bulk of that would be paid over the next ten years; under the Noonan deal those payments for the next ten years are reduced but they are then loaded on for the following 30 years.

In total, over the 40-yr lifetime of the Noonan deal, the €25bn becomes an estimated €72bn, some of which reverts to ourselves (complicated story…) but around €60bn goes to private investors. Possibly even many of the same people whom we are forced to bail out when Anglo Irish Bank and Irish Nationwide were issued with the original €31bn.

THE QUESTION FINE GAEL REFUSED TO ANSWER
None of the three candidates would answer this simple, straight-forward question – what happens to the money when the first of those Noonan sovereign bonds is sold in the next few months, all €500,000,000 of it? What happens to the €500,000,000 similarly raised next year, and the year after and the year after and the year after? What happens to all €25,000,000,000 thus raised in the coming years?

The answer: It will be burned.  A near bankrupt country borrowing billions that were used to bail out two bust banks, then burning those billions - it's an obscenity.

Fianna Fáil/Greens/PDs broke this country; Fine Gael/Labour are breaking its people.

I'm now out of the picture nationally; I just hope our various journalists in print/radio/TV continue to ask this question, and no longer allow those Fine Gael and Labour spokespeople away with what they know is simply untrue.

Regards, Diarmuid O'Flynn.