On October 31st 1517 Martin Luther nailed his famous protest, his 95 Theses, to the door of the castle church at Wittenberg, in Germany.
At that time the Catholic Church was the major power in Europe but Luther was becoming more and more uncomfortable with its increasing abuse of that power. What pushed him over the edge and prompted him into his drastic action was the sale of ‘indulgences’, whereby rich Catholics could bypass the notion of confession and penance and simply buy their way into heaven.
All seems kind of crazy now, doesn’t it, that anybody – much less the highest authorities in the church itself – would even contemplate such an idea, yet there it was and it came from the very top.
Pope Leo X wanted to finance the renovation of St Peter's Basilica in Rome and had started selling indulgences as part of a fund-raising campaign. The Archbishop of Mainz in Germany (Albert of Mainz, no less) had bought himself into that position (I know, I know – scandalous, right?) but had borrowed heavily to do so and was now deeply in debt. The sale of indulgences was a way out; he agreed to allow it in his territory in exchange for a cut of the proceeds.
Luther was incensed, composed his 95 Theses in protest. What he wanted to do was open debate on what was happening, expose what he felt was a scandal.
In Ballyhea and in Charleville, in our weekly protest marches for the last 66 weeks we’ve been trying to expose a crime, the extortion ('The practice of obtaining something, especially money, through force or threats') of tens of billions of euro from the Irish people by the powerful ECB.
And so, in a gesture which is as relevant as it is symbolic, we’ve travelled to Germany, home of Martin Luther, and we will ‘nail’ (okay, we’ll blue-tack) our own protest to the door of one of the new churches of European society – in fact to its very cathedral, the head office of the ECB in Frankfurt. This is what it will say:
Today, June 6th 2012, nearly 500 years on from Martin Luther’s stand On October 31st 1517 when, ‘Out of love for the truth and the desire to bring it to light’ he nailed his famous protest, his 95 Theses, to the door of the castle church at Wittenberg in Germany, we’ve come from Ireland – from Ballyhea, from Charleville, from a few other areas – and we’re on a similar mission. We don’t have 95 Theses, we do have a righteous cause and we do have our own protests, our own Theses:
1. Why has the ECB never accepted blame for its own negligence in oversight since the launch of the euro?
2. The euro was an incomplete currency from creation, lacking in the kind of centralised control mechanisms enjoyed by such as the dollar, pound, yen etc.; in those circumstances the ECB should have been extra-vigilant – it wasn’t.
3. In the early and mid-2000s a tidal wave of hundreds of billions of cheap euro flooded out from the private banks at the core of Europe, in France and Germany especially, and swamped the economies of those countries on the periphery; the ECB ignored every warning sign.
4. When the bubble burst in Ireland, in 2008, our national debt stood at less than €50bn, our National Pension Reserve Fund at just under €20bn, so in effect we were less than €30bn in the red.
5. We did have a problem, a budget deficit that year of €13.1 – large, but not insurmountable if tackled with decisiveness and courage.
6. Nearly five years of austerity budgets later our national debt stands at nearly €170bn and rapidly heading for €200bn, our National Pension Reserve Fund has been raided to the tune of €17bn, stands at just over €5bn (it had grown during 2008/09/10), which means we’re in the red to the tune of about €165bn, an eight-fold increase.
7. Our budget deficit for this year will be over €14bn, which means that despite all that austerity, all that massively increased national debt, we’re STILL no further forward in that most vital area.
8. The reason we are now many times worse off than when all this began? We’ve been bailing out the bank bondholders.
9. One fateful weekend in September 2008 top representatives of the Irish banks met with top members of the government, presented them with a doomsday situation, secured a two-year blanket guarantee of all their deposits and liabilities; they did so while offering incomplete/false/misleading information, so that the then Finance Minister Brian Lenihan boasted that it would cost ‘only’ €5bn.
10. Gradually the true picture emerged and since then, to mid-April 2012 (per current Finance Minister Michael Noonan), the Irish banks have paid out over €103bn in bonds.
11. In that time, we – the Irish people – have committed €67.8bn to the Irish banks (€62.8bn per Minister Noonan again, a further €5bn through NAMA), with talk now that they will require a further €4bn in the next year or two; this in a country whose GDP at the moment is at around €160bn.
12. The bulk of that commitment has been at the behest of the ECB which has used its financial muscle – cheap funding to our Central Bank – to blackmail successive Irish governments into assuming for the Irish people a debt that is not ours.
13. Those bank bonds were private deals between consenting adults in private for-profit institutions, deals done under the prevailing fundamental rule of commerce – ‘WARNING, your investment can fall as well as rise.’
14. The lending institutions fully understood that warning but, blinded by the potential profits, heedless of the bubble building in Ireland, they plunged in anyway.
15. When the Irish banks failed those bonds failed with them; under that fundamental rule of commerce, of capitalism, those bondholders should then have taken their hit, their haircut.
16. Enter the ECB, and its blackmail policy as applied to Ireland.
17. The ECB feared contagion if the Irish banks didn’t pay their bondholders, the risk of collapse to the big banks at Europe’s core in Germany and France – who had huge exposure to massive loans made to all the at-risk countries – and thence to the euro itself.
18. Since these were ECB fears, then the ECB itself should have assumed the responsibility for those bonds, and it had the capacity to do so.
19. Instead, the ECB has forced that responsibility on to Ireland, which – as evidenced in the numbers above – does NOT have the capacity to carry it.
20. So we ask, by what right do you do this to us? To echo Martin Luther’s Thesis 86, ‘Why does the pope, whose wealth today is greater than the wealth of the richest Crassus, build the basilica of St. Peter with the money of poor believers rather than with his own money?’, we ask Why does the ECB, whose wealth today is greater than the wealth of the richest Crassus, pay the bank bondholders with the money of poor believers rather than with its own money?
21. What are the ethical, moral, legal or even logical grounds for what you are doing to Ireland?
22. You have spoken often and loudly of the ‘moral hazard’ effect if Ireland doesn’t pay for the recklessness of its bankers; what of the ‘moral hazard’ effect on the bondholders, whose own recklessness doesn’t just go unpunished but is actually fully rewarded?
23. How do you explain your unprecedented interference in the course of commerce, your corruption of the one of the basic laws of capitalism, that of profit-and-loss?
24. Before there can be any borrower, reckless or otherwise, there has to be a lender; why is it that under your edicts those who so recklessly loaned hundreds of billions not just into Ireland but also into Greece, Italy, Spain, Portugal, are themselves the last and the least to suffer?
25. In 2010 you ‘allowed’ the Irish Central Bank print an additional €30.7bn to enable two zombie banks pay failed bonds, the infamous Promissory Notes as collateral; not a cent of that €30.7bn went to the Irish people, why should we now be made liable for even a cent of it?
26. Since this crisis began your management of it has abysmal; despite all your measures, all your meetings, not alone has it never gotten even a whit better, it has gone from bad to worse to catastrophic.
27. We call on you to admit to your own mistakes, to your own negligence from day one of the creation of the euro right up to the present moment.
28. We call on you to rethink everything you're doing, not just to change course but to reverse course and start again.
29. We call on you to write off the Promissory Notes in their entirety, to write off the bank debt you have already forced on us, the Irish people, and to do with those banks what you should have done from day one – assume responsibility for them yourselves.
30. This started life as the European Coal and Steel Community (ECSC), became the European Economic Community (EEC), then the EU.
31. In a genuine community the strong help the weak; in this community you – the strong – have taken advantage of the weakness and vulnerability of one of the smallest countries in the EU and forced debt on us that is not ours.
32. Over the years we’ve had the addition of the European Parliament, the European Commission, the Council of the European Union, the European Council, the Court of Justice of the European Union, and the European Central Bank, layer on layer of administration.
33. The most significant of those, however, has been the formation of your own institution, the ECB, in 1998.
34. Since 1998 the ECB has been growing ever more powerful, to the stage where it is now beginning to dictate even to the elected representatives in Europe.
35. The proposed ESM treaty, as written, gives even more powers to the bankers and financiers, powers unprecedented in any democracy anywhere, ever – problem unprecedented in any kind of jurisdiction, even in the likes of the USSR or North Korea.
36. The proposed ESM treaty as written not only puts anyone who ever works for it beyond the law, it puts any document it ever writes, any decision it ever makes, any building it ever occupies, beyond even investigation – total immunity for itself and anyone associated with it.
37. This will enable it to do whatever it pleases with absolute impunity and with total immunity.
38. The original aims and values of the European project have been lost, we are now fast heading for a new superpower – the EUB, European Union of Bankers.
39. All the diagnoses made by the ECB of this crisis have been wrong, all the prescriptions have failed – in fact they’ve made the situation worse.
40. It’s time to stop, it’s time to reconsider this whole project, it’s time the ECB were brought to account.
Just as the Catholic Church was a dominant power in Europe 500 years ago, the ECB has become a dominant force today. Omnipotence, however, doesn’t mean they’re always right, doesn’t mean they should not be challenged. In time, and just as the Catholic Church came to see that what it was doing then was wrong, so people will see that what the ECB is doing now to Ireland and to other sovereign peoples across Europe is wrong.
And so, our challenge.
Signed this day, June 6th 2012:
Fiona Buckley Fitzpatrick
Cathleen Quealey Moloney
Donncha Ó Briain
Diarmaid Ó Cadhla