Over and over we hear that Ireland’s current crisis
all began with the blanket bank guarantee given by the then Irish government in
September 2008. Wrong.
There are those who
would argue that it has its roots in capitalism, others who would argue it has
its roots in the time when currencies abandoned the gold standard etc. etc, but
all those arguments are for another time. Let’s focus on what has happened in Europe
over the last few years.
This crisis had its
roots in Maastricht 1993
when the Euro was conceived. That new currency was launched electronically on January 23rd 1999 and in January 2002 we began using notes and coins.
FUNDAMENTAL ERROR AT LAUNCH
From the time of its conception
through
the
years of its inception and right up to the present day, it has been an
incomplete currency, a monster currency. No-one ever had total control over it,
no-one has. The ECB’s very narrow remit was to control inflation and as this Frankenstein began its tour of wreck
across the economies of the countries on Europe’s edge, the ECB was blind, oblivious - inflation, you see, was low.
Prior to the euro-launch, banks and governments
from countries like Ireland, Portugal, Spain, Italy and Greece paid a premium
to borrow on the international money markets, their currencies – the punt,
escudo, peso, lira and drachma – seen as vulnerable. Membership of the Eurozone
changed all that.
In the early years of
the 2000s, the major
investment banks and financial institutions of what have come
to be known as Europe’s core countries – Germany, France, the Netherlands – had
tens of billions, hundreds of billions, to invest. In the banks and governments
of many of what have now come to be known as the peripheral countries, they
found willing borrowers. And so the flood of money into those countries
started.
FUNDAMENTAL PRINCIPLES IGNORED
1) It used to be a fundamental principle of banking that you treated the money you were lending
as though it was your own - anyone in Ireland who took out a loan or a mortgage
from any of Irish bank during the 80s and 90s, when you almost had sign in
blood, knows what I mean. During the last decade, some of the biggest banks and
some of the biggest financial institutions in Europe – indeed right across the world – lost sight of
that basic principle. They engaged in reckless lending.
For every reckless lender of course there's a reckless
borrower. In Ireland it wasn't the government doing the borrowing, it was the
banks. This is a crucial point, absolutely crucial.
In fact not alone was our government not borrowing, it
was actually paying down the national debt and at the start of 2008 it stood at
just over €40bn, while we had around €20bn in savings, in the National Pension
Reserve Fund.
2) Fundamentals of an over-heating economy, ignored: In the early years of this feeding frenzy everyone in
the banking sector, here and abroad, was profiting and, blinded by those
profits, blinded by their own greed, the banking standards began to slip.
A bubble was building, a massive bubble, but despite
all the warning signs the reckless lending and the reckless borrowing
continued. And of course, the bubble burst. When it did, when the dust had
settled, it transpired that the Irish banks – private institutions – owed tens
of billions to the private lender institutions of Europe and likewise to
private financial institutions in the rest of the world, billions they didn't
have; the hurricane that had been building off-shore for several years, a
category 1 hurricane, was about to touch land in Europe, and we were right in
the eye.
So no, the blanket bank guarantee of September 2008
wasn't the root cause of our present problem, it was merely the first attempt
by the first country in the line of fire to deal with that problem. It was
flawed, fatally flawed; it failed, but then everything that Europe itself tried
in the early years also failed, and failed miserably.
FUNDAMENTAL OF LEGAL V LEGITIMATE
There are those who argue that because the then
government signed that guarantee into law that we, as a nation, then became
responsible for all that debt. Wrong, and again I go back to fundamentals. NO
government, either democratically elected or despotic dictatorship, has carte
blanche to do whatever it wishes to do. It is a fundamental of governance that
a government can act ONLY in the best interests of its people. It can be argued
that back in September 2008 Brian Lenihan and Brian Cowen, in whatever state of
mind they happened to be, thought
they were acting in our best interests, but were they?
It was an ambush of course, a carefully set trap for
our government representatives. When they were called to Upper Merrion Square
on that fateful Sunday evening the twin Brians and their tiny coterie of
'advisers' – among them Kevin Cardiff, 2nd Secretary at the Dept. of
Finance and Patrick Neary, the laughingly-titled 'Regulator' – had no idea what
was coming. Does anyone even begin to believe that the bankers didn't know what
they were doing, that they didn't have a plan in place to get themselves out of
the bind they now found themselves in?
€5bn, that's the amount Brian Lenihan believed he was
exposing the country to when offering that guarantee; he was also led to
believe that the problem in the banks was a problem of liquidity – 'Sure Brian boy,
we're only short a few bob for the moment!' – not a problem of solvency. So, it
became law.
And by the way, Fine Gael voted in favour, as did
every party on the night bar Labour (Sinn Fein withdrew support when they got
the details of the Bill, two weeks later), who voted against not because they
didn’t favour the guarantee but because they were unhappy with the additional
powers being granted to the Finance Minister in the Bill. Ironic, isn’t it, in
light of the massive powers they’ve just voted in for all future Finance
Ministers.
Regardless, that bill became law on the basis of utterly
misleading information and even on that basis alone, should be challenged.
There is another fundamental question, however; does
the fact that something is legal make it legitimate? Because if so, then Nelson
Mandela should never have challenged apartheid, John Hume, Martin Luther King,
Daniel O’Connell, Michael Davitt, none of those should have challenged all
those laws denying civil and human rights. That bank debt did NOT become
legitimate on the basis of anything that happened in September 2008.
MIGHT IS RIGHT V RIGHT IS MIGHT
Two years later, the bank guarantee about to expire,
Lenihan now knew the problem was bigger – much bigger – than he had been led to believe.
Now also, however, there was a new kid on the block – the ECB. Lenihan wanted
to pull the plug, the ECB wanted otherwise and from now on, they would dictate.
They have been dictating ever since, bullying and
blackmailing. In November 2010, Ireland's ECB representative Patrick Honahan
having made that infamous phone-call from ECB HQ in Frankfurt to Morning
Ireland in which he cut the legs completely from under his own government, came
the Troika and the Memorandum of Understanding.
Bailout? Yes, a bailout for the banks. The ECB came in
with two ‘partners’, the IMF and the EU, but with only one aim, to ensure that
Europe's banks and financial institutions would be bailed out by us, the Irish
people.
The Memorandum of Enslavement I call it. €69.7bn,
that's the amount of bank debt that has so far been foisted on us, €15,200 for
every man, woman and child in the country, debt that was never ours, loans we
never took out, loans from which we never benefited.
MOST FUNDAMENTAL PRINCIPLE OF ALL
This is often presented to us as being too complex for
ordinary people to understand. It's not. All you need to understand is another
fundamental, the first big lesson we learn in life, the first big lesson we try
to teach our own kids, the enduring lesson by which we all then try to lead our
lives as best we can - knowing the difference between right and wrong.
Is it right that a small country in a vulnerable
condition should be bullied and blackmailed into paying loans it never took
out?
Is it right that the private failed gambles of some of
the richest, greediest, most voracious institutions in the world should be paid
by us, the people of Ireland, at the expense of our young, our old, our most
vulnerable, at the expense of us all?
Is it right that 1% of the EU population should be
forced to pay 55% of the total cost of the European bank bailouts? Because that’s
what it comes to when the funds taken from our Pension Reserve Fund and the
€5.6bn donated by NAMA to the banks are taken into account.
LAUNCH OF IRELAND SAYS NO!
In Ballyhea, two years ago, we said NO! and every week
since, with a few diversions to Dublin, to Frankfurt, to Donegal, we've
maintained that protest.
A few weeks after we started we were joined by
Charleville, by Fermoy. In the last few weeks we've been joined by many more, a
growing movement against this odious debt. We are not looking for improved
terms and conditions on debt that is not ours, we won't accept debt enslavement
for loans we never took out; we're looking for bank debt write-down, nothing
less.
Parish by parish, village by village, town by town,
city by city, county by county, let us start marching. Every Sunday, 11.30am,
let us meet in a location in the centre of our local community and march in
protest against the imposition of debt slavery, and let us march under one
banner - IRELAND SAYS NO!
