Monday, 2 December 2013


There is some confusion out there on what exactly last week's Motion to the Dáil was about in relation to the remaining Promissory Note bonds now about to be sold off by the Irish Central Bank, confusion especially among those who spoke on the government side, every one of whom went off on 'we are great!' tangents, not one of whom actually addressed the Motion itself.

The following motion was moved by Deputy Joan Collins on Tuesday, 26 November 2013:“That Dáil Éireann: calls on the Government: — to immediately lobby the European Central Bank for a one-off exemption from the rules of monetary financing, to allow the Central Bank of Ireland to destroy the €25 billion in sovereign bonds issued in February of this year, in lieu of the remaining promissory notes, plus the €3.06 billion bond also being held by the Central Bank of Ireland in payment for the 2012 promissory note; and — to cease any and all interest payments currently being made on those bonds.”

  • The Motion was not seeking unilateral default; it was merely putting it to this government that we should at least ask the ECB to allow the Central Bank destroy the €28.1bn in Promissory Note bonds;
  • The Motion was not about the budget deficit over the last four years, the money borrowed to pay the nurses/teachers/guards, the Gov's alternative Troika when they want to defend their actions; not one cent of the Promissory Notes €31bn went towards 'closing our deficit', the gap between what we were taking in and what we were spending;
  • The Promissory Notes billions didn’t ease any burden on the Irish people – the opposite is the case, it has added considerably to that burden;
  • The Promissory Notes billions was money printed to bail out banks, bankers, bondholders, international institutional investors, the Eurozone, the Euro itself;
  • Contrary to government claims, the Promissory Note debt is still intact, every cent of the €25bn that still remained in February of this year to be borrowed and burned, is still there (plus the €3.1bn bond issued to pay the 2012 Promissory Note), will still be borrowed, will still be burned; the actual notes are destroyed, replaced by sovereign bonds – the debt remains, in full;
  • The major difference made by Michael Noonan’s February deal is this: where the bulk of the repayments had been over the next ten years, continuing then at a reduced rate for another ten years, now they’ve been spread over 40 with the bulk of that burden being borne by the next generation and the generation after - in simple terms, we are leaving a debt-legacy to our kids, forcing them into debt-slavery to the EU/ECB;
  • We are already paying interest on the Promissory Notes debt, upwards of €300m/annum when the interest on the €6bn Prom Notes already paid is added to the interest we’re now paying to Europe on the €25bn that now sits in the Central Bank (this isn’t to mention the additional €1bn we’re losing on interest on the €20bn taken from the Pension Reserve Fund – another story for another day!);
  • Making reasonable assumptions on the Euribor rate, economist Karl Whelan has calculated the interest on the €25bn Promissory Notes bonds (this does NOT include the €6bn in Promissory Notes bonds already paid) will ultimately total €47bn; this must then be added to the €25bn principal sum, giving an overall cost of €72bn (possible that €15bn of that reverts to ourselves through the Central Bank - I have to confirm this);
  • A question no-one has asked – what if those bonds, when they’re being sold on to the markets, are sold at less than par (as happened with the 2012 bond, which would have cost €3.46bn), how much extra will this then cost us? Even more pertinent, what if those bonds end up in the hands of the very same instititional ‘investors’ that benefited from the original Promissory Notes? How obscene is that, that they profit twice?
  • Ultimately this was an ECB decision to solve a European problem;
  • Destroying those bonds now would have only a positive impact on the markets; those bonds haven't yet been sold so no bondholder is burned and it has the net effect of reducing Ireland's long-term debt burden;
  • In their excuses as to why they won’t ask for debt writeoff the government quotes EU/ECB Articles, Rules and Regulations; these are the very same Articles, Rules and Regulations the EU/ECB itself bent and twisted to allow the €31bn be printed in the first place and that debt imposed on us, so why is our government so strong in fighting us on behalf of the EU/ECB, so weak in fighting the EU/ECB on behalf of its own people?
  • Finally, THIS IS NOT OUR DEBT, never was legitimately, never will be legitimately. It's up to us to keep this to the fore.

The EU/ECB would love to see this issue buried; we now know however that no-one would more like to see us disappear than our own Government. Having done their dirty deal in February, it would be such an embarrassment to them now were we to get a writeoff on that debt. And THAT is why they won't even ask, not because they fear being told 'No', but because they fear being told 'Yes'.