Monday, 10 December 2012


 Any of you who may be tempted to believe the fiction being peddled in the last few days from the government spokespeople on the Promissory Notes of 2012, please read this extract from the report from the Comptroller and Auditor General's office on the Gross Government Debt, Item 2.11, page 20:

The level of Government bonds in issue increased in March 2012 when bonds were issued to meet a promissory note payment of €3.06 billion due to Irish Bank Resolution Corporation Limited (IBRC). The bonds issued will mature in 2025 and have an annual interest rate of 5.4%. As the market value of the bonds at the time was just over €88 per €100 nominal, the State issued bonds with a nominal value of €3.46 billion in order to meet the payment. The yield on the bonds and, therefore, the effective interest rate on the repayment of €3.06 billion, is just over 6.8%.

Contrary to the outright lies being told by various Ministers, not alone was the 2012 Promissory Note paid in full to the Central Bank of Ireland, who then destroyed the €3.1bn, it actually cost us as a nation €400,000,000 more than it needed to and we’ll be paying more interest than we needed to, right up to 2025.

Read the C&AG paragraph above; because the 'market value' of the bonds were only €88 per €100 'nominal' at the time, the State (that's us, people) issued bonds of €3.46bn to get their hands on the necessary €3.06bn to give to the Irish Bank Resolution Corporation - Anglo - which Anglo then gave to the Central Bank, which then - under orders from the ECB - destroyed that money. That's the extra €400 million in the amount borrowed.

Compounding the additional cost of what was done last March, and again referring to the above, the effective interest rate on the €3.06bn is just over 6.8%; we could have got that money from the ECB emergency fund at around 3%. So, not alone did we pay an extra €400,000,000 to get the money, we are paying an additional 3.8% per annum on the €3.06bn - that's an additional €116,000,000 per annum until 2025, when that bond is due to mature (the total annual interest on just that one bond is 6.8% of €3.06bn = €208,080,000).

That, my friends, was Michael Noonan's vaunted 'deal', that's what it cost. As stated in black-and-white above, the Promissory Note WAS paid; to give the appearance of a 'deal' however Michael went to a new and far more expensive source for the money, issued a sovereign bond that will NOT be paid by this government or even by this generation but now forms part of the growing debt legacy we will leave our children.

To give the appearance of having done a 'deal' Michael and Enda engaged in their new favourite sport, 'financial engineering'. The only 'deal', however, was on how they got the money; the P Note WAS paid, on time and in full, the €3.06bn WAS destroyed, taken out of circulation, but at much greater cost to us, the people.

Now, they're planning to do the same again. The lies, the lies, the lies, the ongoing betrayal of the people at so many levels - it is almost beyond words.

Diarmuid O'Flynn.