What’s €1bn here or there? Nothing, it would appear, in this state. October 1, 2012Posted by WorldbyStorm in Economy, Irish Politics.
Given the day that is in it I think it’s worth pulling some comments made earlier this morning and afternoon on the CLR on the €1bn handed over by AIB to unsecured bondholders. I don’t often express it this way but this is genuinely sickening. And as the IT notes, ‘The repayment will bring to more than €18 billion the amount that banks have repaid to bondholders this year.’
As noted in the SBP yesterday:
The Irish government’s borrowing requirement to run the state in 2010 was €20 billion. Following EU/IMF intervention, recent and future austerity budgets had to be put in place to reduce this bill. Bondwatch spokesman Diarmuid Flynn questioned the need for these repayments, given the burden of borrowing the country still carries.
“This coming Monday, to absolutely no fanfare, AIB will pay an unsecured unguaranteed bond of €1 billion, our [taxpayers'] €1 billion. It will be the 18th billion euro our banks will have paid this year, with two billion still to pay, and another €17 billion next year, but who’s counting anymore?”
But dmfod puts it into a broader context on this thread:
The Comptroller and Auditor General’s report shows the current deficit was €25bn in 2011 and that more than €15bn of this went on debt service, promissory note payments, NAMA, recapitalising the banks and bailing out Quinn Insurance.
That is €15bn of wasted expenditure (minus a small amount of debt service that would have happened anyway for capital investment projects & other necessary social expenditure) directly related to the banking/property collapse http://www.audgen.gov.ie/documents/annualreports/2011/report/en/Chapter1.pdf
The report also shows that this is the highest deficit since the crisis began, which completely contradicts the recovery narrative continually being pushed by the government and mainstream media.
This should be frontpage news on every media outlet but of course it is not. Instead the Irish Times’ editorial on the report zeroes in on €35m in welfare overpayments rather than the €15bn chucked at the banks. The bias is so blatant and extreme, it’s almost farcical.
And CMK adds to that with two other comments.
My understanding is that an unsecured bondholder has no claim over an asset as security for the bond. Their claim is purely ‘moral’. Though it says something about this government and the European Central Bank that the moral claims of bondholders have priority over the moral claims of Irish citizens not to be subjected to austerity. Cuts to child benefit are now being mooted, to save an estimated 200 million. So, the government intends that a household with say two kids will next year will lose 80 euro from child benefit, and pay at least 400 euro in property tax and cough up whatever levies and other indirect taxes are introduced in the budget. All the while paying out billions to bondholders who, at the very least, should be told to wait until we’re back on our feet before getting paid or who should be offered 50 million or a kick in the arse. Not a dickiebird in the media about this, from what I can see.
I’ve totted up the amount paid so far this year to unsecured bondholders (i.e. the transfer of monies, borrowed by the state to be paid through taxes for the next several generations, to private financial institutions)and it exceeds 7 billion. That’s apart from the other classes of bondholders. That’s twice the 3.6 billion 2013 budget cuts and extra taxes being forecast. And it’s all happening in the open but the media choosing to ignore, deliberately, steadfastly and resolutely. This transfer of resources, probably unprecedented in human history, is a non-issue. Yet the 36 million in social welfare over payments last year is a pressing scandal that can only be resolved by pushing the destitute off the dole and into extreme dire poverty.
Google ‘bondwatchireland’ and you, too, can keep up with the merry go round which will continue for the next few years. When you hear a politician or journalist say that ‘the money is just not there’ remember that many used to regard Stalin’s 1936 constitution for the USSR as the most democratic ever written. I have to say I’m beside myself about this today and nothing epitomses the the degree to which we are a micro-managed democracy that these transfers take place with zero debate. Enraging and sad at the same time. Enraging for obvious reasons and sad because people here will have their anger focused on public sector workers, teachers, students, immigrants, emigrants, the unemployed, trade unionists, socialist, republicans, single mothers – everyone except those who are actually pillaging this country day in day out with Orwellian levels of complicity by the media.