Tuesday, 28 April 2015

QUANTITATIVE SQUEEZING



Quantitative Easing (QE): the system whereby a central bank creates money to stimulate growth in its economy  - the media were full of it lately with the news that the ECB has just embarked on a 19-month €60bn/month €1.14tn cash-creating binge.

Quantitative Squeezing (a term coined by MEP Luke ‘Ming’ Flanagan, for whom I now work in Brussels): a system whereby a central bank destroys money, again involving the ECB but this one you won't have read about in our media. 

Even as the printing presses start rolling in the new €1.25bn HQ of the ECB in Frankfurt, in Ireland the same ECB ordains that we must do precisely the opposite – every year for the next 17 years, up to and including 2032, we will be burning hundreds of millions of euro (figuratively speaking, of course – this is all done nowadays with the push of a computer button but the effect is the same, extra debt for us all).

TO RECAP
In 2010, in collusion with the ECB and the then Irish Government, to bail out the failed creditors of two failed banks (Anglo Irish and Irish Nationwide, which subsequently became the infamous IRBC), the Central Bank of Ireland printed €31bn – that was more than our entire tax take from labour and industry combined for that year.

This was very much in line with the ECB policy of the day which held that no bank in the Eurozone would be allowed fail (and that was all the ECB had, a policy – still no structures in place to deal with failed banks, in the third year of the crisis).

This wasn't done to save those banks, which were neither solvent nor nationally systemic and which have both since been wound up (Feb 2013). It was done to prevent contagion, a domino effect across the eurozone had those two banks been allowed to fail, leading to a feared subsequent failure of the euro itself.

It was an understandable fear, an understandable measure in the circumstances even if it did mean the ECB turning a blind eye to its own rule on the use of the ELA fund (Emergency Liquidity Assistance – the clue is in the word 'liquidity'!) exclusively for solvent banks.

The measure had the desired effect, bought time for the euro and for the ECB to eventually come up with a more permanent solution, which it did with the 'whatever it takes' announcement in 2012 by new President Mario Draghi.

STING IN THE TAIL
For Ireland however the good news would end there. While publicly clapping us on the back, praising us for all we've done in the last several years, privately the ECB has been insisting that because those two banks weren't themselves able to make good on the €31bn that was given to them (a fact of which the ECB was well aware back in 2010 when it allowed those billions be created and given to those two insolvent banks), Ireland, through its Central Bank, must now destroy the entire €31bn.

And so we have the ludicrous situation whereby on the one hand the ECB is creating billions by the day, ostensibly to kick-start the EU economy, on the other it is demanding that one of the smallest, most heavily indebted (government + household + SME) and most fragile of those economies, Ireland, must destroy billions; billions we must of course borrow.

A LIVE ISSUE
Our government and our media would have us all believe that any talk of relieving the bank-debt burden is moot, that it's all a done deal – 'Move along now, nothing to see here!'

It's not. In fact, far from being a 'done deal', the process of destroying those billions – Quantitative Squeezing – is still in the early stages.

In 2011, in almost its first act after winning election, this government borrowed and destroyed €3.1bn;

In 2012, to cover the €3.1bn due to be destroyed that year, the government issued a bond, which was actually for €3.5bn (they only got 88c in the €) – last year the Central Bank sold a €500m tranche of that bond, every cent of which was then destroyed, which means they still hold €3bn from that bond;

In 2013 IBRC was finally wound up and the remaining €25bn worth of Promissory Notes was 'bought out' and the debt converted to sovereign bonds.

All those bonds must now be sold and the money thus raised – again, every cent of every billion – must be destroyed. As they are sold, the bond coupon (interest) kicks in, and we will pay that to the new bondholder for the lifetime of that bond. Then, in 2038, as the new Promissory Note bonds mature (reach the end of their term), we start paying the principle, and will continue paying until 2053, when the final bond matures.

The final cost between interest and principal, when the additional €3bn remaining from the 2012 bond is factored in? We won't have much change from €80bn, an average of €2bn/yr.

QUANTITAVIE SQUEEZING SCHEDULE

YEAR                                     BOND VALUE                                     TOTAL
2014/15/16/17/18                   €500m/yr                                              €2.5bn
2019/20/21/22/23                   €1,000m/yr                                           €5.0bn
2024/25/26/27/28/29/30/31    €2,000m/yr                                           €16.0bn
2032                                       €1,500m                                                €1.5bn
                                               SUB-TOTAL:                                        €25bn
                                               Remaining 2012 bond                           €3bn
                                               AMOUNT SOLD/DESTROYED       €28bn

BALLYHEA SAYS NO
Since Mar 6th 2011 – more than four years – this particular injustice is part of what we in the Ballyhea Says No To Bondholder Bailout campaign have been marching against, Sunday after Sunday for 217 weeks (and counting). End the sale of those bonds now, let the ECB assume full responsibility for them, and you lift that massive burden from the shoulders of several generations of Irish people; allow the Central Bank of Ireland recreate the €4.1bn that has already been destroyed (which would now be in line anyway with the new 'creative' thinking of the ECB) and you give a massive boost to the current generation.

With just a little goodwill from the ECB, if our own government would only see the light, all of this is now very, very possible.

Wednesday, 18 February 2015

BALLYHEA SAYS NO 4th ANNIVERSARY: MARCH 1st 2015



First post for a while on this blog but it's been a hectic few months on a number of fronts, not least the very welcome distractions of the massive Anti-Water-Charge campaign, and the victory of Syriza in the Greek elections.

On a personal level, I've changed occupations, am no longer with the Irish Examiner but now, as an Accredited Parliamentary Assistant to Luke 'Ming' Flanagan in the European Parliament, work full-time on the bank-debt issue while also paying close attention to TTIP, FTT and a few other issues.

TTIP
TTIP is a proposed treaty euphemistically titled Transatlantic Trade & Investment Partnership that would have devastating consequences for working conditions, for food safety, for environmental standards, not to mention the huge potential for job losses across Europe as the race to the bottom continues.

FTT 
FTT is the proposed Financial Transaction Tax, a relatively tiny tax on only the most toxic dealings in the various financial services centres. It has the potential to raise tens of billions annually and so far 11 EU countries have signed up – Ireland, with Minister Noonan protecting the interests of the IFSC at the cost of the people, has not.

FISHING
Another priority here is having Ireland's net contribution (sorry!) to the EU central funds adjusted to reflect the value of the fish taken from our waters.

There are other issues but above all is the bank-debt.

BALLYHEA SAYS KNOW
On March 6th 2011 a few of us first took to the road in Ballyhea (there is no street, as such, just the main Cork/Limerick road). Every week since then - and joined by Charleville a few months later - we've marched.
The originals - Niall O'Flynn also marched, took this picture

Sunday March 1st we will be entering our fifth year of continuous weekly protest. As with all previous anniversary dates this will not be a celebration. It is, however, a significant day and we would like to mark it as such.

During those last four years we have consistently stated:

  • The bank debt is odious debt, should have been repudiated; this week Ashoka Mody, former mission chief of the IMF delegation element of the Troika to Ireland, was on national radio and stated, unequivocally – 'There was a burden of debt that could legitimately be declared as an odious debt.' 
  • The new FG/Lab coalition government was in a very strong position after their huge mandate of 2011, should have confronted the EU and its various institutions on that bank debt, should have confronted the ECB especially on the €31bn of Promissory Notes, the most odious element of all the bank-debt; in that same radio interview, the same Ashoka Mody confirmed this view, stated – 'Ireland had its opportunity. They came in on a mandate very similar to the current government of Greece, they came in on a promise to do similar things. But as had become customary in Europe – including in Greece (under the old governments) – from the moment the new government was formed it felt an obligation to 'grow up' and 'growing up' in European terminology meant doing what Berlin and Brussels think is the right thing to do.  Ireland fell in with that culture. Ireland had its opportunity, not just for itself but for Europe; in accepting the premise that Brussels and Berlin determine economic policy in every country, Ireland perpetuated a culture that this current Greek government is trying to break.'

Ministers Michael Noonan and Brendan Howlin were both fast out of the box to attack Mr Mody's assertions and both used the same line – why didn't the IMF representative take that line at the time? The answer of course is simple – just as Yanis Varoufakis and his team are doing now on behalf of Greece and its people, it was YOUR job, Mr Noonan, you and your team, to negotiate as hard as was possible for Ireland and YOUR people. Mr Mody – in case it may have slipped your memory – was on the other side of that table. To use a sporting analogy, it would be like Paul O'Connell stating after last week's win that France hadn't maximized their opportunities and French coach Philippe Saint-André complaining that Paul shouldn't have played as hard as he did.

THE PROPAGANDA
Our own media has largely ignored our protest and for those four years most  have indulged in government spin – 'This was the best that could have been achieved, Kenny/Noonan/Gilmore etc did a fine job in difficult circumstances, the bank-debt is a dead issue, it's all done and dusted, Ireland has shown the rest of Europe the way ahead and sure aren't we all grand now again.'

Nonsense, all of it. The 'achievements' of which this government most often likes to boast were all won by others or are due to external circumstances. 

  • The 'burning' of junior bondholders was already well in train from the previous regime;
  • The reduction in interest rate was on the back of the second Greek deal which had NOTHING to do with Ireland or its negotiators, when even the hawks of the EU/ECB could no longer justify the massive profit it was making from the misery of both Greece and Ireland;
  • The current low interest rates are because of the statement in late 2012 by ECB President Mario Draghi that he would do 'whatever it takes' to backstop the euro, reinforced by the recent announcement of at least €1.1tn of a Quantitative Easing programme;
  • A huge chunk of the reduction in unemployment numbers – apart altogether from the massaging of the numbers with those in government schemes and in part-time/low-grade employment – is due to emigration, the hundreds of thousands who have been forced out of Ireland;
  • Ah, there's more,so much more, enough to fill pages, but ye get the drift.


THE DAWNING
There is though a growing awareness within the media, within the people generally, that we've all been hoodwinked. Even within the government's own ranks, on the Promissory Note bonds now being held by the Central Bank, one TD – Labour's Dominic Hannigan – came out a couple of weeks ago on the Vincent Browne show on TV3 (one of the media heroes of this period) and suggested that rather than selling them into the markets, the Central Bank should hold onto the bonds til they mature, or that perhaps the ECB could just take them over and assume that debt for themselves, thus saving future generations up to €80bn of debt.

Apologies for the long-winded post but the reason for it is this – I want people to see that it is NOT too late, that in fact it is never too late to do the right thing. And the right thing now for you to do is to join us in this campaign. You could start by coming to Charleville on March 1st (10.30am, the Library Plaza in the centre of town) and marching with us on this significant day; you can continue by joining this campaign.

Ireland is still one of the best places in the world in which to live and work (if you're lucky enough to have a job). It has everything going for it – fish-filled rivers, lakes and seas, year-round growth in some of the best land on the planet, natural assets above and below ground, wondrous landscapes that continue to amaze millions of tourists from around the globe. Above all it has its people.

Just as the Greeks will rise when they get their new deal, just as the Spanish will rise, so will we. But first we get this unjust burden off our backs.

Regards, Diarmuid O'Flynn.

Saturday, 7 February 2015

SHOULDER TO SHOULDER WITH SYRIZA AND GREECE



This week in a European Parliament corridor I bumped into Manolis Glezos, the poll-topping Syriza MEP from Greece. 

Manolis is 93, a veteran of the Greek resistance against the Nazis in the Second World War, was twice sentenced to death – you can read about him in these two links. Following a short conversation, Manolis has agreed to join us some Sunday on the weekly Ballyhea protest march.

I ask ye, please go to those articles and read, learn, understand where exactly the likes of Manolis and his modern-day successors, Alexis Tsipras and Yanis Varoufakis are coming from. They don’t just , have history on their side, they have right, they have justice.

Then think of those politicians doing what they were elected to do – what they promised to do – and bringing Greece’s fight to Europe, but being lectured by Enda Kenny on how they SHOULD be behaving. And ask yourself – who would you want representing you right now?

Syriza are not spoiling for a fight, they are not the ones being stupidly stubborn; rather they are pointing out the glaringly obvious, that the austerity measures forced on their country by the Troika have failed drastically, have proved counter-productive, are driving Greece into the Dark Ages and need to be radically altered. This should start with TRUE debt write-down as opposed to the ‘extend and pretend’ measures adopted to date.

If ever there was a time for solidarity with Greece, this is it. The weekly Ballyhea Says No protest march tomorrow (Sunday, February 8th) will offer just that. If you want to bring a sign supporting Syriza and Greece, do so, please.

Shoulder to shoulder with Manolis Glezos, a modern Greek legend

Wednesday, 31 December 2014

BALLYHEA SAYS NO WEEK 200 - SPEECH


STILLE NACHT – Christmas 1914
I'm reminded today of a song written by a good friend of mine, Cormac MacConnell, about an incident that happened 100 years ago, Christmas Day 1914, in what would come to be known as the First World War.

From a section of the miles of trenches that faced each other in the mud and blood of The Western Front came a voice, a German voice, singing Stille Nacht – Silent Night – and from that song came one of the most poignant moments of that terrible war, a ceasefire declared by the soldiers themselves.

One by one, tentatively at first but then in greater numbers, the soldiers emerged from the trenches and as they approached each other, bearing what little they had as gifts, they could have been approaching a mirror.

Because what they saw was themselves, the same people, the same miners, farmers, factory-workers coming from the same families with the same stories of subjugation, the same struggle for basic rights in their own countries, and not in fact the butchers and animals each had been led to believe of the other through their respective war propaganda machines.

A day later they were back to slaughtering each other with bomb, bullet, bayonet, and the High Command of both armies made sure such a meeting of minds wouldn’t happen again. And it didn’t.

100 YEARS LATER, WHAT HAVE WE LEARNED?
Well there is another world war going, a global war, more and more of the world’s assets and wealth being concentrated in the hands of a few. Think about recent events in this country.

The imposition of the Property Tax;
The imposition of the Water Charge;
The Universal Social Charge;
The pillaging of billions from our National Pension Reserve Funds AND from people’s own private pension funds;
The imposition of the bank debt;
The myriad misery-inducing cuts to public services;
The gradual erosion of hard-won employment rights – on and on and on;
All adding up to the impoverishment of a nation and its people;
All adding up to decades of debt-slavery.
None of this is accidental, all of this is being facilitated by legislators

LAW AS A WEAPON OF MASS DESTRUCTION
There is a different weapon being used in this global war. No longer is it bomb, bullet, bayonet; now it’s the law being used against us. Law is what enables this transfer of assets and wealth to the few at an accelerating rate, law is what disables our ability to fight back, our right to fight back, and as those laws are enacted, laws that enslave us to debt, we’re then told ‘YOU MUST OBEY - IT’S THE LAW! THIS IS A DEMOCRACY!’

But of course it’s not democracy, not here, not in the EU, not in the USA; in fact in most so-called democratic countries across the world now what we actually have is a mockery of democracy.

THE GREED GODS
Greed is what rules in the world today, greed fed by money and profit. The Markets, the Too Big To Fail banks and global corporations, they are the ones in charge, they are the ones dictating policy to governments who then use their position to make the laws enforcing those diktats on the people.

It’s all too easily done of course. All you have to do is capture the key decision-makers, the primary legislators, and the rest – the secondary legislators, the back-benchers if you like – simply follow on, whipped into line.

Even the capture of the primary legislators is all too easy. There are two main methods – corruption and fear. Either the primary legislators are bought off – campaign contributions, benefit in kind, post-politics prime board positions, or simply cash – or they are terrified into agreement by threatened dire consequences if they don’t to as instructed.

The secondary legislators? We’ve seen for ourselves the circus our Dáil has become, the Laurel and Hardy act of Jerry Buttimer and Jim Daly when we in the Ballyhea campaign had a Private Member’s Bill introduced by the Technical Group in November 2013 for the government to just ask the ECB to allow the destruction of the Promissory Notes bonds. In what has become all-too-familiar from the government benches, Messrs Buttimer and Daly totally ignored the actual motion itself, proceeded to expound on matters that weren’t at all being proposed, then went on to use the privilege of the chamber to denigrate us, tittering away at their own juvenile jokes.  

We saw the circus to even greater effect on the night of the Promissory Notes ‘deal’, when Minister Michael Noonan landed future generations with debt they never incurred but debt we and they will be paying for the next 40 years, the drunken cavorting in the Dáil chamber as the people were sold out.

And we saw it again in the last few weeks in what – laughably – was presented as the Water Charge ‘debate’.

GOVERNMENT PROPAGANDA, MEDIA PRESSTITUTES
As for the propaganda war, it’s endemic, not just all around us but in among us.
In Europe we have German pitted against Greek, Irish pitted against German and so on – nationalism again being whipped up, raising its poisonous head.
We have white pitted against black against yellow against brown;
We have left and all its –isms turned on itself, then pitted against right;
We have Catholic pitted against Protestant against Jew against Muslim against Hindu;
We have native pitted against immigrant;
We have employed against unemployed;
We have private sector against public sector;
We even have man pitted against woman.

But if we turn and look at each other here today, if we look beneath the skin, as was the case 100 years ago on the Western Front all we still see is our own reflection. Because regardless of height, weight, colour, creed, gender, religion, we are all members of the same race – the human race.

We don’t all look the same, we don’t all think the same, we don’t all act the same but under the skin runs the same red blood, beats the same human heart.

WE ARE HUMAN BEINGS, ALL OF US.

But there are those few who would dehumanise us,
Those who would have us as mere chattel,
As worker bees slaving in their hives
And then at the other end,
As mindless consumers
Succumbing to the endless advertising from all their media outlets,
Promoting infinite growth in what is a finite world.
Who are they?
They are the same greedy few who 100 years ago sent those same men from nations right across Europe into those trenches to die in their millions;
They are the controllers.
Theirs today is still the propaganda of division and of  hate,
of fascism and of rampant nationalism;
They are the ones who would now again have us at each other’s throats.
THEY are the enemy.

So what do we do?

We unite. And we fight. We park all our petty differences – because petty they all are – and we fight. We fight to get those legislators who made those laws to change those laws. And if they don’t, we fight to change the legislators. 

In a true democracy, law reflects the will of the people; it is for the people, by the people. It is our will. In our own history though we know how law can be abused, how law HAS been abused not just to bypass the will of the people, but to subjugate. In our own history too however, we never gave up the fight to overturn those laws.

PEACEFUL CAMPAIGN
This time though, it’s got to be peaceful; just as those now still doing the oppressing have become more subtle in their actions, so too must we become more subtle in our campaign.

Go back to the propaganda machine we’re facing: 

We all saw how the government and its spinners portrayed the protests of the last few months, the demonising, the talk of sinister elements, the scare-mongering about the threat of violence, the deployment of the militarised elements of the Gardaí. We’ve seen also how the Gardaí have been deployed in the water meter protests, the attempt to drive a wedge between us.

But think back to 1914, to that Christmas. The gun fodder back then, the foot-soldiers – were they the sons of those who were ordering and directing that war? Were they hell.

Now ask yourself about the rank-and-file Gardaí – whose sons and daughters are they, whose brothers and sisters, whose fathers and mothers, whose cousins and friends? Are they the enemy?
So no, we don’t need violence on our streets, we don’t need destruction of property in our towns and cities. 

But we do need destruction;
Destruction of the kind of laws and policies that have led us to this,
Destruction of the kind of governance that has led us to this,
Demolition of this mockery of democracy. 

For that, we’re going to need be strong, we’re going to need to be steadfast, and we’re going to need to be stubborn. 

In this group, after 200 weeks on the march, I think we’ve already proved – we meet all those criteria.

THREE CHANTS TO FINISH –
BURN THE BONDS, NOT THE BILLIONS
BURN THE BONDS, NOT THE BILLIONS
BURN THE BONDS, NOT THE BILLIONS