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!