Tuesday, 22 March 2011

THE PEOPLE'S PROTEST in a nutshell

Your household has fallen on hard times, the bank sees you as a bad bet and will lend you money only at a penal rate; as parents of a growing family you head for your local friendly Credit Union – the people’s bank – for help.  You explain your case - going to be in deficit for a few years but by dint of hard work and better housekeeping, will then be back in the black.  The Credit Union says ‘fine, no problem, here’s the loan you need to tide you over – oh, by the way, a few reckless friends of yours borrowed a lot of money from some foolish friends of mine and now can’t pay it back; as a condition of the loan you need you're going to have to assume this debt as well, in full - oh, and I'm going to have to charge you additional interest on that because we need to make a few bob on it ourselves also’.
Your local Credit Union would do no such thing, by the way, but if they did, would you sign up to such a deal?  Our twin Brians did, last November.
Take the above scenario and multiply it a million-fold; as a nation we ran into hard times, spent 15 billion euro more than we earned in 2010, for example.  The financial markets were beginning to charge us penal interest rates for our borrowings so in came the IMF and ECB, our friendly European Community bank.  And the ECB demanded of our Brians that as a condition of getting the loan to carry the nation across these next few difficult years, we – the Irish people – would also have to assume the private debts accumulated by our banks to the bondholders, many of whom are friends of our ECB (political investigative blogger Guido Fawkes obtained a list of the Anglo Irish foreign bondholders: German banks, French banks, German investment funds, Goldman Sachs.)
It was a disastrous decision by the previous government, taken at a time when their mandate to govern had long run out, and it was a move vehemently opposed by the opposition of the day.  Two of the major parties of that opposition are now in government, but already they have accepted the principle of this debt, are squabbling now with the ECB only over the interest rate – useless, ‘like giving an aspirin to a heart-attack patient’ is how TCD economist Constantin Gurdgiev describes it.
This additional debt is a millstone around the neck of the Irish people, will surely sink us, force us into a national default.  If that happens, then the cuts we’ve seen to date will pale into insignificance – we’re looking at pensions slashed, social welfare payments slashed, public sector pay slashed.  Don’t believe it?  Check out what happened in Latvia, in Argentina.
We MUST protest what happened last November; as a first step to rehabilitation, the sovereign debt and that private bank/bondholder debt MUST be decoupled, and that private debt dealt with separately.  This Sunday again in Ballyhea, 11.45, gather in the church car-park after second Mass, ten-minute march to the speed-limit sign and back; wherever you're from, please join us, because this concerns you – it should concern us all.