Tuesday, 31 January 2012

ECB/Anglo - The Unbearable Burden

                 A few weeks ago I was listening – as I often do – to the Vincent Browne show on TV3. Vincent is the one national broadcaster above all others who understands the fundamentals of what’s being done to Ireland by our so-called partners in the EU/ECB conglomerate. That night, as yet another government minister was parroting out the lines he had been given by the Dept. of Finance about how this government had secured a reduction in the interest rates being charged by the ECB (they hadn’t, this had come merely as a by-product of the Greek bailout), how they were working hard to secure ‘improvements’ in the terms of the payment of the Anglo Promissory Notes, Vincent damn near exploded in exasperation, and cited a cartoon of the fat man riding on the thin man’s back.

                Turns out it wasn't a cartoon at all but a sculpture by Jens Galschiøt titled 'The survival of the fattest' and here it is, with thanks to Marie Moran of UCD.

I’m sitting on the back of a man
He is sinking under the burden
I would do anything to help him
Except stepping down from his back
(Inscription on the staff of Justicia, Western Goddess of Justice, represented in the sculpture Survival of the Fattest by Jens Galschiø)

Let Leo and Sean and all the other government sheeple bleat all they like about reductions and extensions, they are merely following their shepherd's directions; not until the bank debt is removed from our shoulders will we be able to finally progress from the mire. Our government has already buckled under the pressure, we are left to stand for ourselves. We've done this before, thrown off a burdensome yoke, we can do it again.
Diarmuid O`Flynn

Thursday, 26 January 2012

Our Enda - team captain or windbag supporter?

During the pathetic attempt at a heave against him as leader of Fine Gael a couple of years ago and to deflect criticism that he lacked charisma, Enda Kenny trotted out again and again the team captain analogy, how he was building a good team of which he was just the captain and thus didn't need to be the star.

Staying with the sporting theme, I now offer a different analogy.

There's a guy who stands on the terraces, a harmless enough kind of a fella really but because he seems to have been around forever he has sort of fallen into the leadership role of his own little gang - let's call him Enda. Down on the pitch his team are in the biggest game of their lives but they're being pulverised by a bigger, stronger and far more powerful opposition. Safe in his position outside the wire, our hero is shouting abuse at the opposing players, but that abuse pales in comparison to the vitriol he is hurling at his own team. "Cowards!" he roars, "A disgrace to the parish!"

Around him, his own coterie of fellow supporters take up the cry. "Traitors!" they scream, "Ye've betrayed the jersey (green, of course), ye've betrayed the club and the people it represents, ye should all hang yere heads in shame!" In loud and very certain terms they continue to harangue and to criticise, telling those on the pitch in no uncertain terms what they should be doing and how they should be doing it.

Half-time comes and lo, the home team supporters decide they've seen enough, storm the dressing-room en masse, order the team to tog off and feck off, and ask our man from the terraces and his buddies if THEY will throw on the jerseys (still green) and take the field for the second half. Which they do.

Oh, it's a very different scenario now, isn't it? Where previously they were free to shout and abuse from the safety of the terraces, now they're shoulder to shoulder with the opposition. Enda hasn't even taken up his position before his courage leaves him. All around him the same thing is happening; none of them had realised how big these guys were, how intimidating, and soon, very soon, they all start making little whimpering sounds, conciliatory sounds, their bravura gone, their voices silenced.

The team was losing when they came on but now Enda and his boys are afraid to even compete for the ball, and it becomes a rout. "They've whispered to us that they'll REALLY hurt us if we stand up to them!" cries Inda to the baffled and disgusted supporters, ignoring their protests as goal after goal is conceded.

Soon, however, he and his new team are getting little pats on the head, little words of encouragement, but it's from the opposition. "Good lads," they say, "Well done; just do as we say, and keep doing it!"

So - strong captain of a shrewdly assembled powerhouse team, or loud gutless windbag from the terraces? Would Munster be where they are if Paul O'Connell, Ronan O'Gara and THEIR team gave in to intimidation? Would Leinster if Brian O'Driscoll caved in to blackmail? Would his native Connacht have beaten Harlequins a couple of weeks ago if Enda Kenny, and not Johnny Muldoon, had been captain?

You make up your mind, but I've made up mine. That's why we're marching in Ballyhea and Charleville, that's why we've now got to reclaim those jerseys again and take the field ourselves. Not another cent to the bank bondholders, not another cent in Promissory Notes, not another cent paid by us in any new kind of levy or charge; not another inch conceded, and the ECB forced back.

Diarmuid O`Flynn


How often in our humdrum lives do we get an opportunity to become heroes? To throw ourselves in front of the bullet meant for someone else, to dive in front of the oncoming bus and fling a child to safety, or even just to make the long walk to kick the winning point from distance to win an All-Ireland title for your team, or to take the winning pressure-kick in another Heineken Cup game?

The past 15 months have seen many such moments presented to our TDs, those who supposedly represent in Dáil Eireann our best interests.

The vote in December 2010 on accepting the terms of the troika 'bailout' was a pivotal moment in Irish history. If a couple of Fianna Fáil TDs or a couple of Green Party TDs had crossed the line that motion would have been defeated, the bank bondholders would have had to pay the cost of their own mistakes. The government would have fallen, yes, but instead of sinking us all ever deeper in the mire – as they have been doing - the EU and the ECB would have been forced to face the reality of a rapidly deteriorating situation. 

Not a one of those Fianna Fáil/Green TDs had the kind of selflessness needed to take that step, however, not a single one would challenge the whip.

Over a year on and we have a new government, but the same old situation exists. Last year we paid out over €7bn in what are failed private bank bonds; this month we're set to pay a further €3bn, next month in excess of another €1bn, €19bn in total this year, €55bn over the next four years. In March, and for the next 15 years and more, we'll be taking €3.1bn from the Irish Exchequer, turning it over to our own Central Bank, who will then destroy it - the infamous 'promissory notes'.

It is crushing us, this additional burden, killing us. Is there a single government TD who will stand up now and say - 'No! Enough!'? In this time of massive national crisis, a time when heroes are needed, do we have anyone on those government benches, front or back, with the courage to sacrifice themselves for their people? Anyone?

Diarmuid O'Flynn.

Oh dem bonds, in layman's language

ELVs, Promissory Notes, senior/junior/secured/unsecured bondholders – if it’s all too much for you to get your head around, here is a summary of what’s happened to us, all in very simple straighforward language.

In the early years of the Noughties Anglo Irish Bank burst onto the Irish banking scene in a big way, began to make massive profits. In doing so, however, it was bending/breaking the most basic rules of banking. It gave out loans recklessly, not just by the hundreds of thousands but eventually by the hundreds of millions; it borrowed recklessly, not just by the tens of millions but by the tens of billions. Soon even the most established of Irish banks followed suit, and we had ourselves a property bubble.

Well, the bubble burst, as bubbles do, and when it did Anglo and the other Irish banks were left exposed, very exposed; in fact they too were burst. Also left very exposed, however, were those who had loaned the money to those Irish banks, the institutions we now know as the bank bondholders.

When the ECB, which had slept its way through the bubble years, woke up to what was happening the alarm bells went off. The bank bondholders – German and French banks especially – weren’t just exposed to the Irish banks, they were also exposed to Greece, to Portugal, to Italy, to Spain. If the Irish bank bonds weren’t paid, the whole house of cards could come tumbling down – one by one those countries would fall, would fail to pay their bonds, and one by one the big German and French banks would be in trouble, big trouble.

Oh, what to do? The ECB decided there was only one thing for it – they would hold back this tide, and the first line of defence would be the Irish banks. 

But, there was a problem – where in all the other nations the debt was sovereign, bonds taken out by the governments, in Ireland the debt was private. Those bonds were deals done between consenting adults in private for-profit arrangements and under normal commercial practice the bondholders would now suffer a hit, a haircut. They had been blinded by the possible rewards, they hadn’t properly assessed the risk, hadnt done appropriate due diligence (in many instances deliberately evading their own more assiduous regulator by setting up a little office in Dublin to close the deal, under the far softer Irish regulator); under another basic rule of banking – WARNING: YOUR INVESTMENT MAY FALL AS WELL AS RISE – they were now faced with the consequences of their failed investment. It didn’t happen – they were bailed out.

The ECB, now the European Canute Bank, stepped in, and to protect those big German and French banks placed a dam across this rising tide of bad debt. WE are that dam, we, the people of Ireland, have been blackmailed, bullied and betrayed. The ECB has used its financial muscle to blackmail a weak government of a weakened member state into making public what is a private debt; the EU – the twin-headed monster Merkozy especially - has used its political muscle to bully a weak government of a weakened member state into accepting this deal; our own governments, this one and the last, has betrayed its own people and bowed to the demands of the ECB and the EU.

IF we had never been burdened with this bank debt the probability is that we would never have needed intervention from the IMF or anyone else. We had a budget deficit, we had problems with massive waste in our public spending (too many politicians for starters, and obscenely overpaid), but we also had massive savings in our National Pension Plan. Without that additional bank-debt burden we would already be growing our way out of this mess; with it, we are crushed.

Our governent must end these payments now, immediately. Playing with the terms of repayment – interest rates or duration – is not the answer. It’s like the cartoon of the big fat man on the small thin man’s back – ‘I’ll do everything I can to lighten your load, but I’m not getting off!’

The ECB were the ones with the problem if those bank bonds weren’t repaid; the ECB should have taken over those bonds themselves, should have built a mechanism (we know how good they are at ‘financial engineering’) whereby they assumed responsibility for payment. Imposing them on the people of Ireland was wrong from the start, and wrong at every level conceivable.

If our government won’t act, then for the sake of ourselves, for the sake of comign generations, it’s up to us. Act. Follow our lead in Ballyhea and Charleville – march, protest.

Diarmuid O'Flynn.

Tuesday, 17 January 2012

The Anglo Promissory Notes explained


There’s been much talk lately about promissory notes, the Anglo promissory notes particularly. Having been involved in Ballyhea in protesting the bank bondholder bailout for 45 weeks (and counting), I felt it my duty to do some research on this topic. Here is the result, in layman’s terms and with massive thanks to the Namawinelake blog.

A few years ago when this vat of worms was first opened up, it quickly became apparent that Anglo was insolvent, in other words its assets were worth less than its liabilities. Banks aren't allowed to be insolvent so Anglo needed more cash, and in a hurry or it would go under. The then Minister for Finance, the late Brian Lenihan, wrote a €30bn IOU and gave it to Anglo, who in turn took it to the Central Bank and asked to exchange it for cash. Did Brian ask your permission, my permission, before he landed us all with this massive debt? Did he even ask the permission of his government colleagues, did he – as required by our Constitution - ask permission of the Dáil? Did he hell. Anyway, off the rails as this request was the Central Bank nevertheless said yes, handed over the money.

Under the terms of the agreement, the interest payable on this €30bn ‘advance’ by the Central Bank was 6% p/a. Minister Lenihan committed the Irish state (that’s us) to paying €3bn a year to Anglo, who would then pass on that money to the Central Bank, these payments to continue til the original €30bn plus the interest was paid off in full. So no, it won’t be done in ten years (10 x €3bn), rather it will take at least 15 (if you're not into sums look away now: March 2011, 30bn + 6% = 31.8bn, less 3bn = 28.8bn; + 6%n = 30.5bn on March 2012, less 3bn = 27.5bn; + 6% = 29.2bn on March 2013, less 3bn, etc. etc.).

Anglo got it and uses a huge portion of it to pay off its bondholders - €2.3bn in the next few weeks alone (see bondwatchireland.blogspot for full details)

The Central Bank destroys it – burns it, shreds it, any way you want it, but it’s simply destroyed.

We’re paying the interest to Anglo, which we 100% own; Anglo in turn pays interest to the Central Bank on the €30bn loan, and the Central Bank gives the profit it makes (when talking of banks, I can't say ‘earns’) each year to the government, including the interest it charges Anglo (round and round the houses they go - are ye beginning to see how all this can eventually confuse even those who are charged with regulating it?).

Exactly – what is the big deal, and why is the government making such a song-and-dance over that when most of that interest finds its way back to government coffers anyway?

The big deal is that every year we’re going to have to borrow every penny of those billions, with more interest, and real interest this time, to pay back those promissory notes.

The ECB’s stamp is all over this, quite literally, down to setting the interest rate. By law, a bank is required to have at least as much in real assets as it has in liabilities (the multiplier depends on the country); on its own the IOU given by Brian Lenihan wasn’t real, no guarantee that the promises made in the note would ever be kept. The ECB had to give its approval but more, it also had to give the Irish Central Bank permission to print that €30bn and give it – in total and up front – to Anglo. This though was against the ECB’s own policy; they didn’t want to print new money because – they believe - it will cause prices to rise and their main objective is to keep price rises to about 2% per year. But they had an even bigger concern – their own major banks in Germany and France, those to whom Anglo and all the other Irish troubled banks owed many of those billions. So, they allowed Ireland to temporarily print money to fund Anglo's losses, but with this massive sting in the tail - as the money is repaid it is destroyed, so that at the end of the repayment of the promissory note there is no extra cash, no new money will have been created.

Refuse to pay another bond, refuse to pay another promissory note, look for repayment from the ECB of the money they’ve already forced us to pay through their blackmail policy.

Diarmuid O'Flynn.

Friday, 13 January 2012

The Choice

January 13th 2012

Over the next four years, because of the cuts to frontline staff in the HSE, people will suffer unnecessarily, people will die unnecessarily (there will be more than one); over the next four years, we will pay €55bn in bank bonds.

This is a choice that’s been made by our own coalition governments, both this one and the last. It’s the choice that was made unanimously by every single member of the Fianna Fáil and Green Party parties in the last government, opposed unanimously by every single member of the Fine Gael and Labour parties then in opposition; it’s the choice that’s been made again now by every single member of those same Fine Gael and Labour parties, in government.

The suffering has long begun, the weakest first hit and hardest hit, the most vulnerable, those with the smallest voices; it’s coming to the rest of us. “The money just isn’t there” is the song sung with one voice by the choristers from the government parties; in the next six weeks we will pay €4bn in bank bonds, in the coming year we’ll pay €19bn, in the next four years it’s €55bn (see http://bondwatchireland.blogspot.com for details).

People suffer, people will die; we may not know for certain who, when, where, but we CAN be certain – when you cut that much money from hospitals and care centres, when you reduce care staff, people WILL suffer unnecessarily, people WILL die unnecessarily.

It’s a matter of choice. This week the troika members are in town patting our Ministers on the head – Kenny, Gilmore, Noonan, Howlin – and telling them what great boys they’ve been to continue paying these bank bonds in the face of massive pressure; around the country the noose is tightening as more and more families face their own massive pressures.

When the inevitable begins to happen and people start to die, will our governing party TDs – front bench and back bench - continue to be happy with the choice they’ve made? Will every single TD continue to offer his/her back and succumb to the whip, will they continue to support this choice or will they make a choice of their own?

“Hard decisions have to be made”, that’s become another leading line from the common chorus (ye’ve noticed, surely, that they’re all on the one hymn-sheet?). Those bank bonds were for-profit commercial arrangements between consenting adults in private financial institutions that ultimately failed; under the normal rules of commerce, under the currency of capitalism, those bank bondholders should have suffered their own loss, should have suffered the cost of their own folly – what decision has to be made there?

The ONLY hard decision our government has to make is this – face down the ECB. The ONLY hard decision our back-bench government TDs have to make is this – face down their own front bench. Choice – make your own.
Diarmuid O'Flynn.

Tuesday, 10 January 2012

The Wild Irish Poet - The Fight For Ireland

The Fight for Ireland.
The Fight for Life.
The fight for our right to an ordinary decent life.
So Ireland is paying out 700 million today.
Or should I say The government which does not represent this country in any way shape or form.
We today remain leaderless.
We remain cast adrift in a European sea of greed and corruption.
These people talk about percentages and Euro Zone and Bailouts and conditions and balancing the banks.
They don’t talk about people and hospitals and emigration and employment and survival.
If a Government is not for the people then it is merely a vassal for vested dark despicable interests.
And thus is the world until we as the Irish people defy this gross inequality we are being made to endure.
Until we rise from every chair and every living room.
There is no difference today in colour or religion or class or creed or wage.
Whether you be a plumber or an actor or jobless or from Dalkee or Mayo or Cork.
We need to align with the entire country.
We need to stand up to greed and despicable inequality.
Somewhere in Ireland someone is contemplating suicide.
Somewhere in Ireland there is a hungry baby without his food and a Mother weeping.
Somewhere is a man being told he has no work.
Somewhere in a traffic jam a man is having a heart attack and no hospital to be brought to, to save his life.
Somewhere in Ireland a man is counting money and smiling.
Somewhere in some distant European country men with no souls make decisions by the pen that ruin another generation here.
Somewhere a cowardly TD in Dublin carries his filthy deeds like a weight but ignores the destruction in his own heart.

Are we men? Are we truly brave?
I do not believe in the heart the people here are cowards.
I do believe we are looking for hope. A way to see a better life.
As it stands we have no future.
All that remains is for us to become one.
For our ideas and differences to merge.
Underneath the shame, the sadness and the fear I think our country men and women have a power and a poetic strength.
I think that we are noble.
We must claim this nobility.
We must crush the fear in our waking souls.
We have not come this far, through this much, in so many terrible centuries to be vanquished by men of the pen and the shirt and tie and the greasy crunchers of numbers.
They will eat themselves, those who choose to keep us in a corner taking all that is rightfully ours.
We only have to acknowledge each other.
We are brothers and sisters.
We must rise above our bickering and look above.
Look at the people who are truly destroying our lives.
But also take a look in the mirror.
Maybe many feel ' What can one man or woman do?'
I have bills, I have responsibilities.
Yes you do. But you also have those same responsibilities to the people who have not yet been born here.
To the older generation who sit in the cold with no heat.
To the boy standing on the shore about to leave with his suit case and a broken heart.
We are the many.
We are the few .
We are the one.

I am proud to be Irish .
But we must act on that pride.
We must rise up peacefully but with the force of our poetic hearts.
We might be broke as a nation.
But we are not broke in our souls, as a people.
We are an idea that is celebrated around the world.
We are beloved.
We need to show that love to the person next to you.
We need to release our self-pity and turn it into compassion.
We need to help each other.
With each act of love kindness and power we as individuals will bind the vines of the millions of Irish together and form an indestructible rope of people power.
Let us here be the example to the world now.
Let us show each other and the globe that the Irish have a will.
That the spirit that lies deep inside the soil of this earth is ready to be ignited and a fire that is our hope will light across this country.
We did NOT come through Famine and oppression and loss and death for nothing.
I think now of those who have so little.
I think now of the ghosts of our past.
The nameless graves that await our rising.
The ones who never had a chance to become what they should have.
I for one will not give up my dreams of an ordinary beautiful life because of the endless greed of others.
I hope we can join together.
I hope we can turn this winter of fear into a dawn of a new life.
I hope we can light a flame that will never be extinguished.
I hope we can make the future generations proud of us.
We are beautiful.
We have an amazing people.
The time for fear is over.
We the many, the few and the one.
Peace to you all.
Wild Irish Poet