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TODAY, Wednesday, 2 November, our Government is due to oversee the payment of a billion-dollar bond by the Bank Formerly Known as Anglo.*
There are three reasons not to pay this bond:
1. As Michael Noonan once argued – this is not our debt:
The billion-dollar bond due today is not our debt – it is debt from a bust bank to private bondholders, who knew the risks.
This is not an original argument – in fact, it was well made by Michael Noonan, in the Dáil, last December. This is what he said:
What legal or moral compulsion is on Ireland, however, to honour in full debt incurred by Irish banks when there was no State involvement in the arrangements? These loans were entered into freely by willing lenders and borrowers with absolutely no State participation. … It is obscene that liability for these loans is now being transferred to the Irish taxpayer, in many respects to the poorest of the Irish taxpayers.In the budget the Minister for Finance reduced social welfare payments, punished the blind, disabled, widows, carers and the unemployed and he taxed the poorest at work, and for what? It was so that the taxpayer can take on liability for debts the country never incurred and arose from private arrangements between private institutions. What a disaster and an obscenity.
The latest available bank data shows that Irish guaranteed bank debt has been sold on at a discount to hedge funds in the USA, the UK and Luxembourg, as well as to smaller speculative investors… The position has now become indefensible that the Irish taxpayer, even the poorest taxpayers, should be required to underpin the speculation of hedge fund investors. There must be transparent, open, negotiated burden sharing of bank debt.
All I can say is that I wholeheartedly agree.
2. It is not required by the EU/IMF agreement:
Although the requirements of the EU/IMF programme are onerous, and are imposing painful austerity on our economy, and on many people, protecting the Anglo bondholders is not amongst these requirements. There is no explicit deal under which we have committed to protect those bondholders.
According to the Minister for Finance, Michael Noonan (speaking earlier this year on RTE, and transcribed by the Nama Wine Lake blog), there has been no threat from the ECB to withdraw funding to Ireland if we burn bondholders.
However Michael Noonan did say of the ECB, “a nod is as good as a wink to a blind horse so we know what their negotiating position is.”
Is this an adequate basis on which to decide to pay a billion-dollar bond?
3. The markets will punish us for making the payment, not reward us:
The markets believe we are heading for default. They believe our debt is unsustainable. The reason they won’t lend to us is because they believe we can’t possibly pay our present debts, let alone any new ones. They think our promise to pay back the banks’ bondholders in full is unrealistic. Instead of gaining credit for paying back our debts, our efforts to do so make us less credible and more risky.
We have to set market expectations for burden sharing. It is regular business practice for senior bondholders to take haircuts when the bank they invest in goes bust. In the US in the last three years, 322 banks were wound up. In the vast majority of these cases, holders of senior debt in these banks took significant writedowns. Our problem is that we have set market expectations for a full repayment. Greece, on the other hand, set expectations for a default, and that encouraged the bondholders to come to the table and agree a haircut.
The Irish Government needs to start setting expectations that bondholders will not be repaid in full, and they need to start doing this tomorrow, by announcing that they are pausing the payment of this billion-dollar bond, pending negotiations with bondholders.
So what should the government do?
* Technically, Anglo on longer exists. Anglo Irish Bank Corporation Limited is now known as Irish Bank Resolution Corporation Limited.
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We will have another election within 12 months. I’d prefer if they just one now.
If they are unwilling to form a government and continue on with this ritualistic dance of “no you ask first” neither of them deserve to be apart of government.
I think we should bite the bullet and vote enda 200%..
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Enda , Let Me Go Ya Useless Ball-Ox
Those ‘Independents’ would do well to remember the hugely divisive policies of Fine Gael that fostered such inequality in this Country over the past 5yrs. How easily they forget?
…and lest not forget the Mandarins, the ‘Permanent’ unelected and more specifically, unaccountable Senior Civil Servants…who really run the show (as is proof right now) and they should have a lot of questions to answer for their role in this Country’s financial collapse prior to 2008…but, their decisions are privileged and protected under the law…now there’s one Parliamentary change the incoming regime should seriously consider.
What’s Enda telling that lady in the picture. “.sorry we took away your carers allowance.but we had to do it to pay back the banks.”
I thought he was saying “Gottla gear”, having decided to give up on politics and become a ventriloquist.
Yes and don’t be worrying about the death grant, sure you won’t be needing it when your dead.
Which would be ironic, Ted, since he’s been DoB’s dummy for the last five years.
No he is asking her has the man with 2 pints in he’s hand been in yet?
Kenny , F*ck Off Back Too Mayo
Ted Murray………..so funny.
Anyone else reckon Lowry backing enda Kenny in government would guarantee there would be no movement on the findings of the Moriarty tribunal for another Dail term?
The report was published 5 years ago yesterday.
The statute of limitations is up soon anyway, with mr FG having the most to lose nothing will ever be done about it.
Funny thing about all this. The longer it all goes on the more people will realise we don’t actually need any of them in Government.
The country seems to be running along just fine…its always been the civil servants that run country, the minister just signs on the line.
25% of the nations 65% who voted, only wanted him back.
Even if it was a full one fourth of the country, how is it fair that three quarters of those that didn’t opt for him as their number one party are going to be dictated to by the 25%???
Independents that also stated on record pre-election that they were not going to support him – are now going post-election to support him.
…Talk about more u-turns and double-crossing already – and the government isn’t even formed yet!
They again, are starting as they mean to go on – as usual. So what’s really changed in their antics? Bugger all!
If FG get to come back, there will be no stable government for definite in Ireland.
A lot of people are not going to forget at the next soon possible election, who already looks like they are willing to u-turn on their very own words stated previous.
The independents do this, they are not only ruining the ir own chances next time – they are bring down the rest of any independents that might have some decency in them, by they willing to stick to their previous stated words!
It comes as NO surprise that the Green party might be mixed up in this shenanigans.
They were ran out of office before – look like they will have to be ran out of office again?
Clearly they have learned nothing.
People who don’t vote aren’t allowed a say
What about doing what is in the best interest of the country and not in their best interests ? Either they can form a working government or not.
I voted very simply I do not want Enda Kenny as Taoiseach and I’m am in the AOBE camp and otherwise being poor or disabled you will be crucified by FG and just look st the Tories this week is where Fine Gael got their election manifesto from scew the poor and handicapped
Clearly you are unaware of how the system works.
Very simply, you have no right to vote for a Taoiseach, nor anyone else outside of your constituency. Votes are then pooled to produce the most representative parliament on the face of this earth. Just because it hasn’t worked out how you wanted is no reflection on the system
Your logic is implausible bottom line any vote for FG was a vote for Kenny
Controlling opposition as well as government is the elephant in the room.. FG /FF want to control both as they always have. Conceding opposition to SF is the reason FF will allow FG minority charade until collapse. Self service as always.. The electorate are ever the wiser to these trough seekers and next election might see even bigger losses for the established parties..
Excellent point.
Denis naughton was on radio today and was asked would he push for the emergency department to be reopened in roscommon (which was what he left fg over)and he said no he said rural broadband was the major issue.that just proves his stand was a blatant act of self preservation dreadful characters we elect.
Once FG always FG he only left because Enda didn’t promote him that’s just politics
yes indeed Tim he seen the way he would have looked after promising the retention of the A&E and played the martyr.
Please not another 5 years of these parasites, it’ll be carte blanche on the country
Apparently theres a few elephants in Tallaght too
Sweet Jesus, they still haven’t sorted this out? FFS.
Opposite cheeks of the same arse basically….
Some photo, “a shift’s a shift”
From “Pig in the Kitchen”
to “Horse in the Lift”
to “Elephant in the Room”
….. any snakes LEFT in the grass?
FF and FG get together or call an election. Enough bull about minority governments.
If only it was funny 100 years on since the Rising and there is no proper Government the Irish cannot agree.
Ireland is just full of overpaid little fat , greedy thick unqualified gombeen people filling cronies and their own pockets who claim to be working in the public interest.
Back scratchers the lot of them.
Ireland has done nothing of note in that hundred year. When you travel round the world and see the progress some countries make in give years you see his Ireland lags behind. We can’t make a decision now without checking to see what the EU says or what happens in other countries. We don’t see any trends. We have crap at the top.Cronies and lackies everywhere.
Tommy Broughan isn’t Independent he nominated himself as “Independents 4 change” registered political party.
So Tommy can get an extra 38,000 as leader……..like Eamon Ryan. Ffs
Enda, before you do any deal have a listen to what the 13,000 on the “Unfair Car Tax Law” petition are saying.
Doubtful you will last long unless Reform of your Regressive Taxes is on the list.
https://www.change.org/p/unfair-car-tax-law/c
Fg is obviously not wanted by the majority of people, so anyone supporting them in any way will suffer in future election, so just call GE now.people are suffering on trollies, on the streets, poverty.
Enda looks like he’s trying to hide a boner there.
How, with an 80 year old???
I know, I wouldn’t be able to hide mine either!
Garbage
Looks like he’s trying to snog that old lady, shame on you enda
Fine Gael is still wooing those ‘Endapendants’ – but there’s an ‘elephant in the room’
please God tell me Mary Harney is not back????
We also would have accepted “enda-phant” in the room
Phanting all the way???
As a citizen never had such a blessed period free from listening to those predictably boring elected politicians.The country running as well (or as badly) without you lot Enda
I’m a little confused about issue by issue support. Does that mean if say socdem doesn’t get their way on an issue then the government colapses? or if an Endapendant doesn’t agree then it’s cause a general election? Or that each issue will take months to be decided on with loads of amendments and rewrites? Im genuinely confused by it. Also if FG manage to get in with a minority party who’s to say they won’t just give their new Endapendants lackies (how quickly I reached for the L word) 2 fingers and do what they want. If that happens people will have short memories and no sympathy for any TD who walked into that situation.
Funny that they dont show the picture of Enda with the very old lady , him sitting there with her in her home wrapped up in his fancy warm coat & scarf & this poor old dear , sitting at home in her p.j’s dressing gown an extra coat , hat on her head just to try keep warm!
ENDA IS PUCKERING UP RIGHTLY NOW LOL.
Whatever comes out of this the next government is doomed. It will be in the hands of people who will have their own agendas.
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