ULA Finance spokesperson to challenge Bundestag budgetary committee over European narrative on Irish crisis

Investors who bought Anglo bonds on secondary markets set to make massive profits at the tax payer’s expense

Bondholder payout equivalent to a third of all 2012 Budget cuts and austerity measures.

ULA Finance spokesperson to challenge Bundestag budgetary committee over European narrative on Irish crisis

In a statement, Richard Boyd Barrett, TD and Finance spokesperson for the United Left Alliance, condemned the handover of €1.25 billion to the ECB today which will go to wealthy speculators who had capitalised on the demise of Anglo and bought up discounted bonds in the secondary market. Most of the trading on those bonds took place in closed, proprietary bond-trading systems by professional stockbrokers. Mr. Boyd Barrett pointed out that the final recipients of today’s payment are investors who bought Irish bonds in the secondary markets at vastly reduced cost. The ULA TD emphasized that the money to make these payments is coming straight out of public services, to the detriment of the ordinary citizens.

 
Deputy Boyd Barrett will be speaking at 8.10pm in the Dail tonight during the debate on the United Left Alliance motion calling on the government not to pay over the €1.25 billion Anglo-Irish bond due for payment today, and the Anglo-Irish promissory note due to be paid in March.

After the debate Deputy Boyd Barrett will be travelling to Berlin to join the Dail Finance Committee delegation, which is due to meet the German Bundestag Budgetary Committee tomorrow morning.

Richard Boyd Barrett said: “Although we do not know who the bondholders are – because transparency provisions are lacking at EU level - we do know that many of the bonds which this payment is going to service are with investors who snatched up bank bonds at steep discounts after Anglo Irish went down. This means that the new bondholders, which in the secondary market tend to be predatory investment firms, are going to make massive profits on their investment at the expense of the Irish taxpayer.”

“It beggars belief that not only are we going to pay unsecured bondholders but we are also going to lavish them with profits that are rumoured to be anywhere between 30 and 50% - a profit they made over the course of just one year.”

“After this €1.25 billion payment, the government is dead set on making another payment of €3.1 billion in March. These figures may seem too vast to conceptualise, but imagine if, for example, we spent these billions to invest in renewable energy, job creation measures or in our health system, how much better off we would be. The €3.1 billion promissory note payment on March 31 2012 would be sufficient to fund the total cost of running Ireland’s entire primary school system for a whole year.”

“The Irish government should repudiate these debts because, quite simply, they are not our debts and the ordinary citizens of this country, and our economy cannot afford to pay them. This is a point I will also be making strongly to the Bundestag budgetary committee, who seem to be accepting a narrative that suggests, somehow, ordinary Irish, Greek or Portugese citizens are responsible for the economic crisis in this country and across the Eurozone. The reality is that this crisis results from the greed and speculation of German, French and British banks, as well as the failings of a greedy financial elite in this country.

“The scaremongering about the ECB cutting off funding to our pillar banks if we refuse to pay the bondholders is fallacious. The ECB has been desperately protecting the European banking system and therefore would not take such retaliation.”

“The other scare tactic that the government consistently peddles, is that the markets would lose confidence in Irish bonds. But since we are not in the international market, and are instead heading in a direction that will make the markets lose more confidence in this country, that justification is also bogus.”

“There is absolutely no reason why the government cannot repudiate this bond repayment instead of merrily handing out massive profits to speculators.”

Richard Boyd Barrett also said:

“The proposed payment is equivalent to one third of the cuts introduced in the 2012 Budget. If the money were kept in the country instead of being sprinkled away like confetti, we could reverse all the cuts on the child benefit, the job seeker’s benefit, the single parent family payment, the rent supplement, the mortgage interest supplement, the fuel allowance, the Back to Education schemes, the state pension, the reductions to staff in the Health service, the cuts to disability, the cuts to Community Training and the capitation grants to primary schools. We could reverse all those cuts and still have a few million euros left to spend on other essential services.”

“We believe that all debts run-up by private banks and financial institutions should be repudiated, but at the very least, the government should suspend the current payment to the bondholders of a defunct bank that seems to exist solely to enrich investors who bought them at greatly reduced cost.”