Tuesday, 23 June 2015

THE BURNING BONDHOLDER BANDWAGON WHEELED OUT AGAIN



Last week, just as with Eamon Gilmore before the election of 2011, we had the spectacle of Labour leader Joan Burton back on the burning bondholders trail, announcing her conviction that the remaining junior bondholders in IBRC, the vulture funds, should be scorched in their bid to be paid €270m from what remains of that rotting corpse.

We had Patrick Honahan joining in the chorus, the recently resigned Central Bank Governor adding his two cents worth and advising those now dealing with what’s left of IBRC to tell those junior bondholders where to go.

And of course shouting loudest, giving both the kind of publicity of which those of us in Ballyhea who have been campaigning relentlessly against the unjust bank-debt burden for more than four years can only fantasise, our mainstream media.

TRUTH – THE FIRST CASUALTY
Those junior bondholders shouldn't get a red cent, no question about that. But do those commentators and opinion formers in our mainstream media – any of them – not know that last year, our Central Bank destroyed €1,000m, nearly four times the amount being talked about above? Do they not know that under the terms of the Michael Noonan Promissory Note ‘deal’ of Feb 2013, our Central Bank will destroy another €500m this year, that over the coming years this annual destruction will accelerate until we have destroyed the entire €31bn legacy from that self-same IBRC?

Has Joan Burton buried somewhere in the dark recesses of her brain the fact that she and her party, without even challenge to the ECB, supported Michael Noonan and Fine Gael when he transformed that IBRC highly-debatable debt ('totally' illegal, as described by Michael himself after he had done that deal) into sovereign debt, and thus transferred the burden from their own shoulders to the shoulders of the next generation and the generation after?

Does Patrick Honahan not see the supreme irony in him now playing tough with these junior bondholders when he – without even a whimper of protest to the ECB – was the one who ultimately destroyed that €1,000m of borrowed money last year?

For those of us in the Ballyhea campaign, this collusion between the Minister, the Governor and the media is mind-boggling, it truly is. They trumpet one message even as they simultaneously bury a similar story of far, far greater significance.

WHO GETS BURNED IF THE PROMISSORY NOTE BONDS ARE DESTROYED?
Nobody. And this is probably the most frustrating of all points. That €31bn is already in circulation, a drop in the ocean when one considers the Quantitative Easing programme on which the ECB has just embarked. If those bonds are destroyed, or even held in the Central Bank to die a natural death, no-one gets burned, no bondholder is made to suffer. More critically, however, the Irish people aren't made to suffer for a crime we never committed.

A FEW QUICK POINTS ON THE IBRC PROMISSORY NOTE BONDS
  • They were born in 2010 when, in the absence of any official EU mechanism to deal with insolvent banks, the then government of Fianna Fáil/Greens, the Central Bank of Ireland and the ECB colluded to bail out the failed investors in two failed Irish banks, Anglo Irish and Irish Nationwide;
  • The final bill came to nearly €31bn and it has been presented in full for payment by the Irish people;
  • The payment comes in the form of money destruction – the €31bn was created to bail out those creditors; now, because the banks were insolvent (as was well known at the time), the ECB has called in the Promissory Notes and that entire €31bn has to be taken back out of circulation;
  • We don't have that €31bn so we borrow it in the form of bonds (the Noonan Promissory Note 'deal'), which are then sold into the market per a schedule that was drawn up in Feb 2013 – it started last year, two bonds of €500m each;
  • As those bonds are sold, the money raised is destroyed;
  • We begin repaying those bonds in 2038, the final bond maturing in 2053;
  • In the meantime we pay the interest on those bonds;
  • The final cost, taking into account the total original sum of €31bn plus the interest, will depend on money market conditions but we won't see much change from €80bn, an average of around €2bn/yr for the next 40 years.
WHOSE LEGACY?
If we don't act, if we don't protest as a people, as a nation, then this doesn't become just the legacy of this government to future generations of Irish people, it becomes OUR legacy to our children.

Is that what you want? Because in the Ballyhea, in Charleville, in Ratoath, in Dublin, in Tralee, in Killarney, in Fermoy, in Clonmel, in so many other pockets of resistance around the country, we say NO!

On July 1st, to highlight the above injustice and in an attempt to bring it into the spotlight, a delegation from the Ballyhea Says No campaign is heading to the European Parliament in Brussels to meet with MEPs. We have two meetings arranged, the first with the GUE/NGL group of 52 MEPs, the second an open meeting with MEPs from all other groups, including (we hope) the four Fine Gael MEPs.

The crusade continues…


Saturday, 30 May 2015

PADDY NUNAN - QUIET HERO



Many times during the last 222 weeks, since we began the Ballyhea bank-debt repudiation campaign, from inside and outside the country we have heard the Irish people denigrated, described as sheeple, as a cowed and beaten race. Always, it has annoyed me.

If I have any touchstone for Irishness it’s the Nunans and the Ryans, two families with whom my own was hugely intertwined during our formative years in Ballyhea, from childhood, through teens, to adulthood.

I think especially of the Nunans, whose farm adjoined our little quarter-acre plot, and by whom and with whom we were largely raised.

A SAFE HAVEN
To use the euphemism of the day, ours was a ‘troubled’ home (my mother eventually left, aided in her escape by the three oldest of us, in a family of ten) and Nunans, well, that was our safe haven, a house of hard work and hard workers, yes, but also a house of harmony and gentleness and laughter and love. Unspoken love, as was (and remains, unfortunately) the way in so many Irish homes, but a deep love nevertheless.

There was also a strength about the Nunans, physically, mentally and emotionally, and that too was deep and understated.

David Nunan was the patriarch, in a true union with the woman we always knew only as ‘Mrs Nunan’ (Alice Dillon her maiden name), a partnership which, over the decades, saw the 30 acres they got from the Land Commission parlayed into a farm of over 60 acres through fields claimed from the mountain (ah, picking stones!), through acquisition also of adjoining land.

David had come to Ballyhea from nearby Liscarroll, and it’s there this story starts.

A ‘SAFE HOUSE’
During the War of Independence the Nunan home, at the end of a long passage and well off the road, was what was known as a ‘safe house’, a place where IRA activists (including some of David’s older brothers, he being just a child at the time) could hide out when on the run.

One evening a couple of lorry-loads of Black-and-Tans came trundling up their long passage in search of one of the most prominent of those activists, Paddy O’Brien, a cousin of the Nunans. Failing to find Paddy, they turned instead on David’s older brother Paddy, then 19, took him outside, and shot him. 13 times. According to contemporary written testimony from his father, he was first to reach Paddy after the Tans had left, asked him if he was badly hurt, to which – he swore – Paddy replied “’Tis nothing, give me a mouthful of water.” Stoic? Courageous? You could say that.

COURAGE IN THE FACE OF DEATH
Fearing his son was near death Paddy’s father immediately called for both doctor and priest but despite all his wounds, Paddy survived, lived to the age of 73. A miracle? Yes, of sorts, and decades later he was still able to show us the scars from the exit wounds, though some of the bullets remained lodged in his body.

There was no massive fanfare at Paddy’s funeral, no 21-gun salute, yet it was Paddy Nunan, and families like his, who helped sustain that War of Independence, whose sacrifices enabled those who were doing the fighting to keep going.

PADDY NUNAN – SAME NAME, SAME COURAGE
David Nunan’s oldest son was also called Paddy, after both his uncle and his grandfather. This week, we buried Paddy and again, there was no massive fanfare but again, we buried a hero, a quiet hero.

For the last 25 years, while working his small hill farm and doing shift-work in the Kerrygold factory in Charleville, Paddy cared for his wife Margaret. He did so with a smile on his face, willingly, lovingly, ably. Late last year however he could no longer manage and very reluctantly, he allowed Margaret be taken from him and into a Nursing Home.

What we didn’t know, however, what Paddy himself didn’t know, was that he too was ill. On St Stephen’s Day last year, December 26th, he was finally persuaded to go to Cork University Hospital for tests. Motor Neurone disease. Not just a death sentence, a truly horrific death sentence.

He bore it with true strength, a strength of which most of us can only dream. In those final months, and just as he had done for his wife all those years, Paddy was supported and cared for by his own family, by his sons David (who moved back into the family home) and Micheál (who came back from France for his final days), by his daughter Helen and her husband Antonio; also by his sisters Ellen and Mary and their husbands Pat and Ray, who lived nearby, and by his brother Davy and Davy's wife Mary.
Paddy and Margaret with (left to right) David, Helen, Micheál

THE WELL RUNS DEEP
Paddy Nunan never marched with us on the Ballyhea Says No campaign. He couldn’t, because his Sunday mornings were tied up. But he was with us in spirit, gave me words of encouragement (and were they needed!) every time I met him at Ballyhea shop. His sons and daughter march with us, his brother and sister march with us, and even their young kids likewise – the Nunan connection has been there from the first week.

Likewise the Ryan connection, and so many other families like the Nunans and the Ryans in the weeks between that first march, back on March 6th 2011, and this Sunday’s march in Ballyhea, week 222. Some are ever-presents, some dip in and out, some can simply no longer afford the time, and some have – understandably – simply lost hope.

I haven’t.

THE SPIRIT OF A NATION
The heart and soul of this country, generation after generation, is represented by people like Paddy Nunan. The likes of Enda Kenny, Michael Noonan and Joan Burton of the Fine Gael/Labour coalition, the likes of Bertie Ahern and Fianna Fáil before them, can sell off for a song national assets like Aer Lingus, like Irish Water, like our gas and mineral reserves; guys like Denis O’Brien can wheel and deal and revel in their millions and billions, use them to spin and dictate as they will. But the Kennys and Noonans of this world can never sell that heart or steal that soul, the O’Briens of this world can never have it. Why? Because it’s not theirs to buy, to sell or even to steal.

HISTORY REPEATS
We will win this war. I believe in the Irish people, the old Irish people from the traditional families, the new Irish people who have embraced us and made this country their home. I believe in their strength, in their goodness, in their courage. We see it in people like Catherine Murphy in the last few weeks as she disdains all threats in her efforts to shine a light on a lot of shady happenings over the past decade and more – a true representative of the people. But we see it also in the growing numbers who are facing down this government on issues like the water charges, on the silencing of an already largely subjugated media by powerful interests.

A century ago, just below the surface, an eruption was brewing. History does repeat and now, we are again on the cusp. 

We are strong, stronger than most of us realise, stronger than most of THEM realise. We must act.

There is no longer even a pretence of democracy in this country; there is only dictatorship, legislation being rammed through the Dáil and rammed down the throats of the people, while a cowed and captured media sits silently by.

The people, though, are rising.

Tomorrow, Sunday May 31st, Ballyhea church car-park at 10.30am, week 222 of our campaign and as it was for the last four years plus, the spirit of Paddy Nunan will be with us. You're welcome to join us.


Tuesday, 28 April 2015

QUANTITATIVE SQUEEZING



Quantitative Easing (QE): the system whereby a central bank creates money to stimulate growth in its economy  - the media were full of it lately with the news that the ECB has just embarked on a 19-month €60bn/month €1.14tn cash-creating binge.

Quantitative Squeezing (a term coined by MEP Luke ‘Ming’ Flanagan, for whom I now work in Brussels): a system whereby a central bank destroys money, again involving the ECB but this one you won't have read about in our media. 

Even as the printing presses start rolling in the new €1.25bn HQ of the ECB in Frankfurt, in Ireland the same ECB ordains that we must do precisely the opposite – every year for the next 17 years, up to and including 2032, we will be burning hundreds of millions of euro (figuratively speaking, of course – this is all done nowadays with the push of a computer button but the effect is the same, extra debt for us all).

TO RECAP
In 2010, in collusion with the ECB and the then Irish Government, to bail out the failed creditors of two failed banks (Anglo Irish and Irish Nationwide, which subsequently became the infamous IRBC), the Central Bank of Ireland printed €31bn – that was more than our entire tax take from labour and industry combined for that year.

This was very much in line with the ECB policy of the day which held that no bank in the Eurozone would be allowed fail (and that was all the ECB had, a policy – still no structures in place to deal with failed banks, in the third year of the crisis).

This wasn't done to save those banks, which were neither solvent nor nationally systemic and which have both since been wound up (Feb 2013). It was done to prevent contagion, a domino effect across the eurozone had those two banks been allowed to fail, leading to a feared subsequent failure of the euro itself.

It was an understandable fear, an understandable measure in the circumstances even if it did mean the ECB turning a blind eye to its own rule on the use of the ELA fund (Emergency Liquidity Assistance – the clue is in the word 'liquidity'!) exclusively for solvent banks.

The measure had the desired effect, bought time for the euro and for the ECB to eventually come up with a more permanent solution, which it did with the 'whatever it takes' announcement in 2012 by new President Mario Draghi.

STING IN THE TAIL
For Ireland however the good news would end there. While publicly clapping us on the back, praising us for all we've done in the last several years, privately the ECB has been insisting that because those two banks weren't themselves able to make good on the €31bn that was given to them (a fact of which the ECB was well aware back in 2010 when it allowed those billions be created and given to those two insolvent banks), Ireland, through its Central Bank, must now destroy the entire €31bn.

And so we have the ludicrous situation whereby on the one hand the ECB is creating billions by the day, ostensibly to kick-start the EU economy, on the other it is demanding that one of the smallest, most heavily indebted (government + household + SME) and most fragile of those economies, Ireland, must destroy billions; billions we must of course borrow.

A LIVE ISSUE
Our government and our media would have us all believe that any talk of relieving the bank-debt burden is moot, that it's all a done deal – 'Move along now, nothing to see here!'

It's not. In fact, far from being a 'done deal', the process of destroying those billions – Quantitative Squeezing – is still in the early stages.

In 2011, in almost its first act after winning election, this government borrowed and destroyed €3.1bn;

In 2012, to cover the €3.1bn due to be destroyed that year, the government issued a bond, which was actually for €3.5bn (they only got 88c in the €) – last year the Central Bank sold a €500m tranche of that bond, every cent of which was then destroyed, which means they still hold €3bn from that bond;

In 2013 IBRC was finally wound up and the remaining €25bn worth of Promissory Notes was 'bought out' and the debt converted to sovereign bonds.

All those bonds must now be sold and the money thus raised – again, every cent of every billion – must be destroyed. As they are sold, the bond coupon (interest) kicks in, and we will pay that to the new bondholder for the lifetime of that bond. Then, in 2038, as the new Promissory Note bonds mature (reach the end of their term), we start paying the principle, and will continue paying until 2053, when the final bond matures.

The final cost between interest and principal, when the additional €3bn remaining from the 2012 bond is factored in? We won't have much change from €80bn, an average of €2bn/yr.

QUANTITAVIE SQUEEZING SCHEDULE

YEAR                                     BOND VALUE                                     TOTAL
2014/15/16/17/18                   €500m/yr                                              €2.5bn
2019/20/21/22/23                   €1,000m/yr                                           €5.0bn
2024/25/26/27/28/29/30/31    €2,000m/yr                                           €16.0bn
2032                                       €1,500m                                                €1.5bn
                                               SUB-TOTAL:                                        €25bn
                                               Remaining 2012 bond                           €3bn
                                               AMOUNT SOLD/DESTROYED       €28bn

BALLYHEA SAYS NO
Since Mar 6th 2011 – more than four years – this particular injustice is part of what we in the Ballyhea Says No To Bondholder Bailout campaign have been marching against, Sunday after Sunday for 217 weeks (and counting). End the sale of those bonds now, let the ECB assume full responsibility for them, and you lift that massive burden from the shoulders of several generations of Irish people; allow the Central Bank of Ireland recreate the €4.1bn that has already been destroyed (which would now be in line anyway with the new 'creative' thinking of the ECB) and you give a massive boost to the current generation.

With just a little goodwill from the ECB, if our own government would only see the light, all of this is now very, very possible.

Wednesday, 18 February 2015

BALLYHEA SAYS NO 4th ANNIVERSARY: MARCH 1st 2015



First post for a while on this blog but it's been a hectic few months on a number of fronts, not least the very welcome distractions of the massive Anti-Water-Charge campaign, and the victory of Syriza in the Greek elections.

On a personal level, I've changed occupations, am no longer with the Irish Examiner but now, as an Accredited Parliamentary Assistant to Luke 'Ming' Flanagan in the European Parliament, work full-time on the bank-debt issue while also paying close attention to TTIP, FTT and a few other issues.

TTIP
TTIP is a proposed treaty euphemistically titled Transatlantic Trade & Investment Partnership that would have devastating consequences for working conditions, for food safety, for environmental standards, not to mention the huge potential for job losses across Europe as the race to the bottom continues.

FTT 
FTT is the proposed Financial Transaction Tax, a relatively tiny tax on only the most toxic dealings in the various financial services centres. It has the potential to raise tens of billions annually and so far 11 EU countries have signed up – Ireland, with Minister Noonan protecting the interests of the IFSC at the cost of the people, has not.

FISHING
Another priority here is having Ireland's net contribution (sorry!) to the EU central funds adjusted to reflect the value of the fish taken from our waters.

There are other issues but above all is the bank-debt.

BALLYHEA SAYS KNOW
On March 6th 2011 a few of us first took to the road in Ballyhea (there is no street, as such, just the main Cork/Limerick road). Every week since then - and joined by Charleville a few months later - we've marched.
The originals - Niall O'Flynn also marched, took this picture

Sunday March 1st we will be entering our fifth year of continuous weekly protest. As with all previous anniversary dates this will not be a celebration. It is, however, a significant day and we would like to mark it as such.

During those last four years we have consistently stated:

  • The bank debt is odious debt, should have been repudiated; this week Ashoka Mody, former mission chief of the IMF delegation element of the Troika to Ireland, was on national radio and stated, unequivocally – 'There was a burden of debt that could legitimately be declared as an odious debt.' 
  • The new FG/Lab coalition government was in a very strong position after their huge mandate of 2011, should have confronted the EU and its various institutions on that bank debt, should have confronted the ECB especially on the €31bn of Promissory Notes, the most odious element of all the bank-debt; in that same radio interview, the same Ashoka Mody confirmed this view, stated – 'Ireland had its opportunity. They came in on a mandate very similar to the current government of Greece, they came in on a promise to do similar things. But as had become customary in Europe – including in Greece (under the old governments) – from the moment the new government was formed it felt an obligation to 'grow up' and 'growing up' in European terminology meant doing what Berlin and Brussels think is the right thing to do.  Ireland fell in with that culture. Ireland had its opportunity, not just for itself but for Europe; in accepting the premise that Brussels and Berlin determine economic policy in every country, Ireland perpetuated a culture that this current Greek government is trying to break.'

Ministers Michael Noonan and Brendan Howlin were both fast out of the box to attack Mr Mody's assertions and both used the same line – why didn't the IMF representative take that line at the time? The answer of course is simple – just as Yanis Varoufakis and his team are doing now on behalf of Greece and its people, it was YOUR job, Mr Noonan, you and your team, to negotiate as hard as was possible for Ireland and YOUR people. Mr Mody – in case it may have slipped your memory – was on the other side of that table. To use a sporting analogy, it would be like Paul O'Connell stating after last week's win that France hadn't maximized their opportunities and French coach Philippe Saint-André complaining that Paul shouldn't have played as hard as he did.

THE PROPAGANDA
Our own media has largely ignored our protest and for those four years most  have indulged in government spin – 'This was the best that could have been achieved, Kenny/Noonan/Gilmore etc did a fine job in difficult circumstances, the bank-debt is a dead issue, it's all done and dusted, Ireland has shown the rest of Europe the way ahead and sure aren't we all grand now again.'

Nonsense, all of it. The 'achievements' of which this government most often likes to boast were all won by others or are due to external circumstances. 

  • The 'burning' of junior bondholders was already well in train from the previous regime;
  • The reduction in interest rate was on the back of the second Greek deal which had NOTHING to do with Ireland or its negotiators, when even the hawks of the EU/ECB could no longer justify the massive profit it was making from the misery of both Greece and Ireland;
  • The current low interest rates are because of the statement in late 2012 by ECB President Mario Draghi that he would do 'whatever it takes' to backstop the euro, reinforced by the recent announcement of at least €1.1tn of a Quantitative Easing programme;
  • A huge chunk of the reduction in unemployment numbers – apart altogether from the massaging of the numbers with those in government schemes and in part-time/low-grade employment – is due to emigration, the hundreds of thousands who have been forced out of Ireland;
  • Ah, there's more,so much more, enough to fill pages, but ye get the drift.


THE DAWNING
There is though a growing awareness within the media, within the people generally, that we've all been hoodwinked. Even within the government's own ranks, on the Promissory Note bonds now being held by the Central Bank, one TD – Labour's Dominic Hannigan – came out a couple of weeks ago on the Vincent Browne show on TV3 (one of the media heroes of this period) and suggested that rather than selling them into the markets, the Central Bank should hold onto the bonds til they mature, or that perhaps the ECB could just take them over and assume that debt for themselves, thus saving future generations up to €80bn of debt.

Apologies for the long-winded post but the reason for it is this – I want people to see that it is NOT too late, that in fact it is never too late to do the right thing. And the right thing now for you to do is to join us in this campaign. You could start by coming to Charleville on March 1st (10.30am, the Library Plaza in the centre of town) and marching with us on this significant day; you can continue by joining this campaign.

Ireland is still one of the best places in the world in which to live and work (if you're lucky enough to have a job). It has everything going for it – fish-filled rivers, lakes and seas, year-round growth in some of the best land on the planet, natural assets above and below ground, wondrous landscapes that continue to amaze millions of tourists from around the globe. Above all it has its people.

Just as the Greeks will rise when they get their new deal, just as the Spanish will rise, so will we. But first we get this unjust burden off our backs.

Regards, Diarmuid O'Flynn.