BALLYHEA SAYS NO – UNFINISHED BUSINESS

On Sunday Sept 3^rd the Ballyhea Says No campaign takes the road once again, our focus now on the Promissory Notes of 2009/10 when €31bn was gifted by our Central Bank to two insolvent institutions, Anglo Irish Bank (€25.5bn) and INBS (€5.5bn).

The quid quo pro for the creation of those billions, which all three of the Central Bank, the government and the ECB must have known (or should have known) would never be repaid by either Anglo or INBS (both of which were subsequently wound up), is that the Central Bank of Ireland must take that €31bn back out of circulation. 

I'm asking people now to please, please, read the following few paragraphs, then read them again if the enormity of what’s happening doesn’t sink in the first time. Because it’s critical that you understand that as part of the Anglo Irish Bank bailout legacy, our Central Bank is right now destroying borrowed billions, and doing so at an accelerating rate.

In 2014 the Central Bank destroyed €1bn;

In 2015 the Central Bank destroyed €2bn;

In 2016 the Central Bank destroyed €3bn;

In 2017 (to date, according to Fianna Fáil Finance spokesperson Michael McGrath) the Central Bank has destroyed €2.5bn, on track to destroy €4bn.

That’s €8.5bn destroyed by the Central Bank of Ireland in the last three years, with almost another €20bn still to go.

Just pause and think about that for a moment.

A billion euro is one thousand million euro; since 2014, at a time when our country has been crying out for investment in housing, in health, in infrastructure for water and transport, our Central Bank has destroyed eight thousand five hundred million euro, every cent of which was borrowed, every cent of which will have to repaid at some stage in the future, on every cent of which we are now paying interest.

THE CURRENT SITUATION

Over the past several years the NTMA has been building up something of a war chest – prudent, given that borrowing costs are now so low. However, rather than using those billions to invest in all those badly needed services, they’ve been redeeming the Promissory Note bonds from the Central Bank of Ireland, and they’ve been doing it a rate far faster than the new schedule calls for. The NTMA gives the Central Bank of Ireland the borrowed billions, the Central Bank of Ireland then destroys them, the ECB is satisfied. That is worth repeating and even stressing – the Central Bank of Ireland is destroying those borrowed billions.

Why is all this ignored by our national media? Where is the outrage, the criticism?

JUSTICE FOR IRELAND

The Ballyhea Says No campaign isn’t about finding fault for this entire Promissory Notes debacle, it’s about finding justice for Ireland.

When the banking crisis hit the eurozone the fledgling currency was ill-equipped to deal with the fall-out, not a single support structure in place. Ireland shares responsibility with all the others in the eurozone for those design failures – we were party to it. But the eurozone shares a responsibility with Ireland for the cost of that failure.

In the absence of a Banking Resolution Mechanism (now in place), the Promissory Notes were an emergency measure – almost a panic measure – to relieve a situation that threatened to bring down the entire eurozone banking system. The fear was that if one bank failed it would lead to a domino effect. In itself this was fair enough; that Ireland is now forced to carry the full Promissory Note cost of that euro design failure is not.

CALL TO ARMS!

And so, we’re back, unfinished business, on the road in Ballyhea on Sunday Sept 3^rd at 10.30am, and on the first Sunday of every month thereafter until we finally get bank-debt justice for Ireland. And because this is an injustice to us all, we’re looking for support, across-the-board support, from all political parties and Independents, from all media, from all of Ireland. 

We will also have a new slogan - Ballyhea Says Know!

FOR THOSE WHO LIKE DETAIL – THE PROMISSORY NOTES NUTS AND BOLTS

The way it happens is as follows:

Under the original schedule of destruction for the €31bn, the government had to destroy €3.1bn every year (March 31^st the deadline). It happened in 2011 shortly after the new Fine Gael/Labour coalition government had been elected, under the radar, but of course it was totally unsustainable.

In 2012 (€3.1bn) and 2013 (€25bn), under instructions from then Finance Minister Michael Noonan, the NTMA (National Treasury Management Agency, the institution charged with borrowing on behalf of the state) issued sovereign bonds to buy out the remaining Promissory Notes, all of which were immediately acquired by our Central Bank.

So far, this was just a paper exercise. One state institution – NTMA – issued bonds which were held by another state institution, the Central Bank of Ireland. The NTMA was paying interest on those bonds to the Central Bank of Ireland which in turn was returned to the state exchequer – a circular arrangement, no cost to the state.

As long as the CBI held those bonds this would be the case but of course this wouldn’t satisfy the ECB, who wanted to see that €31bn taken out of circulation. Along with the creation of those new Promissory Note bonds, a new schedule of destruction was also created. Rather than €3.1bn a year, the Central Bank of Ireland would sell those bonds at an initial rate of €500m a year for eight years, then gradually increase the rate until the entire €31bn was gone.