Friday, 8 August 2014


During the recent European elections a succession of Fine Gael candidates wouldn't answer the following simple question: what will happen to the €300,000,000 the Central Bank gets when it sells the first of the Promissory Note Sovereign Bonds later this year, is that money destroyed? 

In a subsequent interview on Matt Cooper's popular drivetime Today FM programme, newly elected Fine Gael MEP Brian Hayes likewise wouldn't give a straight reply to that question. 

Even in the Dáil, responding to three separate Parliamentary Questions,  Finance Minister Michael Noonan wouldn't reply. ‘The Central Bank is independent in the exercise of its functions and the management of its investment holdings is a matter for the bank itself.  Neither I nor the Department of Finance have any role in those matters’ said Minister Noonan. Slightly bemusing, considering Michael was one of the primary architects of the deal that gave birth to those notes.

On Friday July 18th, a group comprising two members of the ‘Ballyhea/Charleville Says No’ campaign group (Fiona Fitzpatrick & Diarmuid O’Flynn), two MEPs (Luke Ming Flanagan & Nessa Childers) and two Independent TDs (Stephen Donnelly and Peter Mathews) met with Central Bank Governor Patrick Honohan and asked him directly that simple question. Governor Honohan’s answer was unequivocal – yes, the millions will be destroyed, or to use his own formal description, ‘extinguished’.

That’s just the beginning. Mr Honohan also confirmed that the €350,000,000 raised from the sale last year of portion of the 2012 bond has already been ‘extinguished’, as was the entire €3.1bn borrowed to pay off the 2011 Promissory Note, as will be another €500,000,000 next year, and another the year after – every euro in fact of the entire €25,000,000,000 thus raised in the coming years.
So now we have the answer.

For even the most hardened of media commentators the details of the original Promissory Notes, never mind the details of the subsequent conversion of the Promissory Notes to Sovereign Bonds ‘deal’, is a labyrinth, a hazy maze of dates and rates, a confusion of Notes, Bonds and most of all, massive numbers. For the rest of us?

Suffice to know this: to bail out the creditors (read major European banks) of two bust Irish banks (Anglo Irish and Irish Nationwide) and thus save not just the European banking system but possibly the euro itself (a premise accepted by Mr Honohan at that meeting), during the next 40 years the Irish people will pay at least €70bn (when the 2011 & 2012 Notes are included), the bulk of which falls due in the final two decades. That’s over €15,000 for every man, woman and child in this republic.

Think of it like this: You go into your bank in the morning to be told “Here’s a loan of €250,000 to pay off a debt built up by an associate of yours, for which your solicitor signed you off as sole guarantor - I know, I know, he didn't consult with you but he is your appointed solicitor. I will now take every cent of that money and ‘extinguish it’ - you'll never get to spend a cent of it. But here also is your payment schedule. Don't worry, I've set it up to make it easy enough on yourself over the next few years; the bulk of the pain will be felt by your children and grandchildren, by which stage you and I will be long gone from the equation."

Would you accept that scenario? Multiply it by 100,000, that’s what Michael Noonan has done on our behalf, that is the legacy this generation leaves for the next. And that's just on the remaining €25bn of the Promissory Note debt. What cost the entire bank bailout?

“Since we never got to spend a cent of that money, and never will, I don’t care how low the interest rate is, I don’t care how long we’re given to pay – I'm not paying this debt!”; so said Luke Ming Flanagan to Minister Honohan.

“It’s simply ‘protection money’ to the ECB!” fumed Peter Mathews, a Chartered Accountant and former banker.

If you're okay with that, do nothing – just don't get in the way of those who are doing something. If you're not okay with it, join the Ballyhea/Charleville campaign group (we march every Sunday morning, 10.30am), join Luke and Nessa, Stephen and Peter, join all eight MEPs now fighting our cause in Europe on these Promissory Notes bonds as we take this fight to the ECB in Frankfurt, our next port of call (Sinn Fein’s Liadh Ní Ríada, Lynn Boylan, Matt Carthy, along with Derry’s Martina Anderson, with the other two Independents in Europe, Marian Harkin and Brian Crowley, all stand with us).

Far from being too late, it has never been more urgent - we must stop the sale of those bonds, or we condemn future generations to debt slavery.

@ballyhea14 (Diarmuid O'Flynn)
@fb_fitz (Fiona Fitzpatrick) 

Ballyhea bondholder bailout protest

Saturday, 26 July 2014


That was a day. It started at 8.30am, picked up in Ballyhea by Rob and Fiona Fitzpatrick; it ended when we got back to Charleville more than 12 hours later and Rob, Fiona, Siobhan (my wife) and myself sat down to discuss the day. Siobhan asked the question - what was the low point, what was the high point (only two had been allowed into the meeting, Fiona and myself)?

Where to begin.

 Rob, Fiona, Peter Mathews, Nessa Childers, Stephen Donnelly, Luke Ming Flanagan, DO'F.

We headed for Dublin via Cork (short diversion to have a few staples removed from my shoulder, result of a recent shoulder operation), final destination the Central Bank on Dame Street and a meeting with the Governor himself, Patrick Honahan.

We had prepared for Mr Honahan a list of questions (see below) relating to the Promissory Note sovereign bonds he now holds in his vault, bonds of over €28,000,000,000 in value (the insertion of all the zeroes is deliberate - that's what €28billion looks like).

The two big questions: 1) what happens to the billions raised from the sale of the Promissory Note bonds? 2) As a sitting member, Ireland's representative, would Mr Honahan use his influence to set up a meeting for us with the Governing Council of the ECB?

It would be our second meeting with Mr Honahan (the first took place last year) but this one was different. Accompanying us would be MEPs Luke Ming Flanagan and Nessa Childers from the European Parliament, along with TDs Stephen Donnelly and Peter Mathews from our national parliament, Stephen there representing the Technical Group.

Yet another MEP, Marian Harkin, wished to join us but was unable to do so.

Most of the groundwork for the meeting had been laid by Fiona and she had also organised a pre-Central Bank meeting with Sinn Fein MEP Lynn Boylan, who reiterated her party's support for what we in the Ballyhea/Charleville campaign group are doing, along with those in the various other centres around the country (Ratoath and Dublin getting very honourable mention here for their relentlessness).

Having been signed in, we were escorted to a boardroom in the upper floors of the Central Bank (fantastic view over the south city) where we were immediately joined by Patrick Honahan and another Central Bank official, David Cronin.

Fiona Fitzpatrick & Diarmuid O'Flynn (Ballyhea/Charleville Says No); Luke Ming Flanagan & Nessa Childers (MEPs); Stephen Donnelly & Peter Mathews (TDs); Patrick Honahan & David Cronin  (Central Bank of Ireland).

The meeting lasted for over an hour, got hot and heavy on more than a few occasions, everyone having their say bar Mr Cronin. Consequently there was too much in it to offer a blow-by-blow account so herewith, a summary (quotes from own shorthand record of the meeting).

Peter Mathews
From the perspective of all those of us in our group, as a Chartered Accountant and former banker himself no-one understands the whole Promissory Note debacle more than Peter Mathews and the pain he feels at what is happening in the name of his former profession is palpable. He sympathised with the position Mr Honahan found himself in on his appointment as Governor in 2010, likening him to the fabled little boy in Holland with his finger in the dyke, doing his best to stop the floodwaters from breeching.

There, however, his sympathy ended, and Peter made very clear his anger with how bank-debt of nearly €70bn has been forced on the Irish people. "The details of the Promissory Notes have never been properly understood by the commentators at home," he fumed, "So the true story of what has happened has never been told in Europe. It's a story of bank-debt losses. The Promissory Notes have been replaced by Promissory Note bonds and we're told that because we're now in better shape, we can pay these bonds." Peter's final question was telling - "Are we a society or are we an economy?"

Stephen Donnelly
His fellow TD, Wicklow's Stephen Donnelly, with the kind of straight-talking straight-to-the-point attitude to which we've become accustomed in his Dáil performances, had a number of questions for Mr Honahan. "Is it possible for the ECB to destroy these bonds and if not, who do we go to next?"
Well, we established that even if they don't have the ultimate decision the ECB does indeed have a major say in what happens to the bonds, in which case Stephen had a very practical suggestion - "Rather than sell them, can we not just hold the Promissory Note bonds until such time as they all mature, thus costing only the minimal interest rate we're paying on the loan at the moment, around €45m/annum?"

Luke Ming Flanagan
For Luke Ming, a face-to-face meeting with the ECB is an imperative. "I hope to meet the ECB and ask them to do what is morally right. We're being forced into a marriage with these people but it's like Ireland of the 70s, no divorce option. I'm not sure what kind of people we're being tied to; I want to meet them and know, are they worth dealing with? Their answers will define that. We need a meeting, we need assurances, we need to see if they understand that Ireland took this Promissory Note debt on board to save the European banking system. The ECB cheered us on and why wouldn't they, but the people made no profit from any of those banks – well, the debt isn't going to come our way either. I need to meet those people, I need to be able to go back to the 124,000 who voted for me and let them know what the ECB is like."

Nessa Childers
Nessa Childers outlined her fear not just for Ireland, on how the Promissory Note deal has been handled, but for Europe itself. "The European Parliament has no power over the ECB but we do meet them. I remember at our last meeting with Jean-Claude Trichet (former President of the ECB), when asked about progress he made a fingers-crossed gesture. The decision taken by Mario Draghi (current ECB President) to provide a backstop to the euro, when he said he would do whatever had to be done, has led us all into a fools' paradise. We've been pushing the debt out but are we now close to the limit?"

When Mr Honahan got to respond (the meeting was chaired and controlled by Fiona), what we heard was not in the least encouraging. He did confirm what was happening to the billions being raised through the Promissory Note bonds, what has already in fact happened to the full €3.06bn from the 2011 bond, plus to all the €350m raised from the partial sale of the 2012 bond - it has been destroyed, or to use Mr Honahan's own quaint description, it has been 'extinguished'.

On the question of the possible destruction of the remaining bonds as opposed to the 'extinguishing' of the billions associated with them and the subsequent burdening of the next several generations of Irish people with that debt, not an inch from the Central Bank Governor.

"Everything I'm doing has been about protecting the Irish taxpayer from the consequences of the blanket bank guarantee," he said; "The Promissory Notes came from that. The Central Bank is bound by strict laws; within those laws I'm doing everything I can to protect the Irish taxpayer."

On Stephen Donnelly's suggestion that if he won't destroy the bonds, he could at least just hold them, let them die a natural death rather than sell them and then destroy the money, burden future generations with the subsequent debt - no dice. "I know this line will fail; already we're right up against the line of what is legal, the ECB speaking of monetary financing."

None of this came as any great shock to any of us on our side of the table. Along with Finance Minister Michael Noonan, Patrick Honahan was one of the main architects of the Promissory Note 'deal'. I'm not going to use this forum to castigate the man – in the first instance, he can’t defend himself. Suffice to say, Patrick believes he’s doing a great job; I don’t.

For Patrick, there appears to be no objection to the idea of a nation – even his own nation – being forced to shoulder a debt incurred to save not the two Irish banks involved but their creditors across the globe, to save the European banking system, perhaps even to save the euro itself (suggestions which he appeared to accept). Whether or not it's right? Not relevant.

We moved on to the major reason we were there, to ask Mr Honahan if he'd use his influence to set up a meeting between this representative group and the ECB Governing Council.

Again, no. "I'm not inclined to do that" he said, point blank; "I feel I can achieve more for Ireland by not arranging that meeting, but I won't stand in your way."

Fiona was having none of it. "I don't believe in not asking the question and that's why we want to meet the ECB, to do just that. Look at the people in this room, the mandate they have; look at those who are not here but who are backing what we're doing; look at the result of the recent elections; it is now the will of the people of Ireland that the ECB must be challenged on these Promissory Note bonds. I'm asking if you'll do the will of the people and facilitate that meeting. You said you were Ireland's representative on that ECB board so I'm asking again, will you facilitate that meeting?"

Again, Patrick wasn't for moving. "I'm not sure I want to push for a set of meetings that won't go anywhere, I don’t want to use up whatever remaining credit I have on that. I think I've achieved quite a lot and I can achieve more. I don't want to (set up that meeting)."

Many times already the meeting had become heated – this was another flashpoint. Peter Mathews had a bit of advice for Patrick, along the lines suggested earlier by Stephen Donnelly. "If you really want to concentrate their minds, tell them you're not going to sell the bonds, that you're thinking of controlling these bonds yourself. This is like being asked to pay 'protection money'."

Luke Ming was incensed. "Do you take any notice of election results, of the will of the people? We're not getting any benefit from this capital, from those bonds – I don't care how little interest we're asked to pay, or what terms we're being offered. If you can arrange this meeting, surely this can only help your cause? Prior to the last election it could be argued there was no objection in Ireland to what was being done – after the results of those elections that is obviously no longer the case. In my constituency there are two independents (himself and Marian Harkin), in Dublin there is Nessa, in Ireland South now there's Brian Crowley, while Sinn Fein have an MEP in every constituency, all against the Promissory Note debt. That election was the most recent taking of the temperature of the Irish electorate; it should tell Europe, we're about to pop. Play your card – us!"

Eventually, reluctantly, definitely against his own better judgement, Mr Honahan agreed, but it was a grudging agreement. "They're (Europe) sick and tired of the Irish bank-debt story," he claimed, "I'm happy to write a letter to the ECB board but won't be pushing for the meeting."

So, getting back to the opening paragraph, the low point, the high point.

That the money raised from the bonds was being destroyed I already knew, so that came as no surprise; that Mr Honahan would also not be keen to have our new group – no matter how many people were now represented – meet the ECB, again, no surprise. For me though, the low point was the confirmation by Mr Honahan that in all of what has been done to the Irish people in this entire bank-debt imposition, the fundamental human law of right over wrong simply doesn't apply.

The high point? After the meeting, during interviews in front of the Central Bank we met Conor McGregor, the soon-to-be world champion in the fast-growing sport of mixed martial arts cage-fighting and a true son of Dublin.

Conor's motto, adopted on behalf of several other up-and-coming Irish fighters, is 'We're not here to take part, we're here to take over!'

Would that the man with whom we'd been talking for the previous hour-plus had even a scintilla of that attitude. I trust though that he is a man of his word and will put through that request. Along with this new alliance, I really want to sit in front of that ECB board and ask them to justify what they're doing to Ireland.

Those bonds must NOT be sold, those billions must NOT be 'extinguished', that debt-burden must NOT be imposed on successive Irish generations, debt-slaves to Europe for the next 40 years and beyond.

NB: The above is my own opinion, neither formed nor endorsed by anyone else who attended the meeting.

Diarmuid O'Flynn.

Wednesday, 16 July 2014


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.


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.


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.


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.


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.


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.


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.


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.