In the course of debates with the Fine Gael candidates during the recent election the same two points were raised again and again by all three of Seán Kelly, Deirdre Clune and Simon Harris (Phil Prendergast of Labour didn’t bring it up), two points that both Fine Gael and Labour spokespeople also brought up again and again over the last year and more.
Both fall well short of the full truth.
‘THE PROMISSORY NOTES ARE GONE’
In February last year, and in his own words of explanation to the Dáil recently, Michael Noonan ‘exchanged’ the Promissory Notes for Sovereign Bonds. Only the actual notes – the paper on which was written that debt – was destroyed; the remaining €25bn debt on the Promissory Notes remained exactly as it was, in full. So yes, the notes themselves are gone; the debt they were covering is still there, every cent.
‘WE SAVED THE COUNTRY €20bn’
If you buy an item reduced from €30 to €10 you have saved yourself €20; if you buy that same €30 item for €10 but have the remaining €20 paid over the next three years with interest, such that it will now cost an additional €60, that is NOT a saving, it’s deferred payment.
In essence that is what happened in the Noonan Promissory Notes deal. As explained above we have exactly the same debt; under the old arrangement the bulk of that would be paid over the next ten years; under the Noonan deal those payments for the next ten years are reduced but they are then loaded on for the following 30 years.
In total, over the 40-yr lifetime of the Noonan deal, the €25bn becomes an estimated €72bn, some of which reverts to ourselves (complicated story…) but around €60bn goes to private investors. Possibly even many of the same people whom we are forced to bail out when Anglo Irish Bank and Irish Nationwide were issued with the original €31bn.
THE QUESTION FINE GAEL REFUSED TO ANSWER
None of the three candidates would answer this simple, straight-forward question – what happens to the money when the first of those Noonan sovereign bonds is sold in the next few months, all €500,000,000 of it? What happens to the €500,000,000 similarly raised next year, and the year after and the year after and the year after? What happens to all €25,000,000,000 thus raised in the coming years?
The answer: It will be burned. A near bankrupt country borrowing billions that were used to bail out two bust banks, then burning those billions - it's an obscenity.
Fianna Fáil/Greens/PDs broke this country; Fine Gael/Labour are breaking its people.
I'm now out of the picture nationally; I just hope our various journalists in print/radio/TV continue to ask this question, and no longer allow those Fine Gael and Labour spokespeople away with what they know is simply untrue.
Regards, Diarmuid O'Flynn.