€1,100 Per Household – 11 Times The Household Charge

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Stephen Donnelly tackles the payment today of €1.5 billion to unsecured, ‘unguaranteed’ AIB bondholders, in a statement today.

“Today, while rural schools are threatened with the loss of teachers and new figures reveal that 200,000 children in Ireland are living in poverty, €1.5 billion will be paid over to anonymous, unsecured, unguaranteed senior bondholders at AIB.

That’s €1,100 per household in the country – or 11 times the Household Charge. And the real tragedy is, this isn’t even ‘news’.

Think of the acres of coverage given to the Household Charge. And yet there’s been hardly a murmur about this €1.5 billion bond payment. Why? Because many in the media have clearly accepted that this government is going to pay back debts that we don’t owe.

This government came in on a wave of promises to negotiate hard to get write downs on this debt. They had a mandate from the people to do so. Major capitalists, like George Soros, said the bond holders should take losses. The IMF has said unsecured bondholders could take losses. But the government’s negotiating strategy, instead, has been to do whatever the ECB and the bondholders wanted.

Some believe that we are liable to pay these bonds because AIB is a state-owned bank. However, these are debts incurred by professional investors which have no sovereign guarantee and which occurred before the state took control of the bank. Therefore we have no moral obligation to pay them whatsoever.

Not only has the government not sought to negotiate with the bondholders, it has not even tried to find out who they are. The Minister for Finance, Michael Noonan, confirmed to me that they have not sought to identify the bondholders, yet in opposition not only did he demand their identity but he provided the late Brian Lenihan with the website where the bondholder information could be found.

The Government said its negotiating strategy had moved on to the promissory notes. But a substantive deal on promissory notes hasn’t happened – all we got was a one-year deferral that’s going to cost us an additional €90 million.

AIB has been recapitalised by the citizens of this country to the tune of €20.7 billion. We own 98.8% of it. Without our aid, AIB would be bust. AIB got to this point because it pursued a reckless lending strategy. Its bondholders facilitated that – they lent recklessly to AIB. And yet those bondholders have taken no losses on those bonds, and the Government – this one and the last – has consistently boasted that no bondholders would be burnt.

Whilst accepting that there are no easy decisions on this issue, and that the ECB is applying very significant pressure for Irish citizens to cover the losses of private investors, it is galling that this bond is being paid, and it is a tragedy that the media seems so reconciled to the fact that it is being paid.

It may not be feasible to renegotiate today’s bond payment, but a focus on it, and on the immorality of these anonymous, unguaranteed bondholders being paid billions at the expense of the Irish people, could at least lay the ground for some genuine, hard negotiations prior to the next bond payment due.”

36 thoughts on “€1,100 Per Household – 11 Times The Household Charge

  1. stoneruile

    The only one in the whole Dail that knows what he is talking about. This guy needs to set up a political party.

    1. trobuff

      100% Agreed – I wish I could have voted for him myself when he was running in Wicklow. Smart and practical…. I’ve got a bit of a man crush I think.

  2. Nukem Dukem

    Why isn’t it put to the people of Ireland whether we want to pay this or not? Have we given this government carte blanche to just throw our money away? Seeing as I own a tiny fraction of AIB, can I get them to pay my credit card account?

    So many questions!! caffeine rush.

    1. spucks

      an ironic comment given that his speech was essentially highlighting the media’s apathy towards this issue. do you work in the media yahorse??

    2. irlandesa

      Speeches won’t change anything, so don’t make speeches.

      Marches won’t change anything, so don’t march.

      Occupying won’t change anything, so don’t occupy.

      Shutting up and paying the money won’t change anything, so shut up and pay the money.

  3. mimbo

    completely right this is what annoys me about the morons protesting the household tax, these payments to bondholders are far more damaging and cost each of us far more yet people like richard boyd barrett and joe higgins help the government by focusing on the household tax and distracting from bigger issues pick ur fights u idiots

    1. dj jarvis

      they HAVE been banging on about the bonds – you just must not have been listening

      in fact – you cant shut them up about the banking debt !!!!
      have you been living in a cave for the last 5 years ???

    2. Instant Karma Police 'n' Thieves

      Hey mimbo, you are wrong. The household charge gives the people an opportunity to withhold funds from the Govt. That is a form of protest over payments such as these.

      It is impossible for the Govt. to say it needs the Household charge for essential services, while it gives even more money away to gamblers who gambled and lost.

  4. Brian Mahon

    Why doesn’t braodsheet go out and get this website that Noonan provided to Lenihan adn publish the list themselves?

    make a bit of a ruckus over it at least, no?

    1. Cloud

      I thought this while reading the speech too…why can’t people just find out who these anonymous bondholders are and publish their names? Broadsheet, to the Broadmobile!

      1. Brian Mahon

        How about a bit of snooping? Some of the names look familiar, axa, aviva and the like. But others are alien (to me anyway).

        How much are we paying them individually, has anyone asked who they’ve lobbied (if they’ve lobbied), does it matter which country they are based in, are the purely investment firms or some other entity?….

        To think these names have been around since 2010 and apparently our politicians ‘don’t know’ who these guys are now.

  5. cillian

    Good work stephen, will be passing it onto all my apathetic friends who voted fianna fail and with the heart of revolutionaries jumped ito politically unknown territory and voted fianna gael . . . . . . huge change, 2 letters

  6. boonag

    He didnt comment in the Dail. They are on their holidays. You should clarify the photo is a file one.

  7. Phyllis

    You couldn’t make this up….. Money money money must be funny ….in a rich mans world… All the things I could do… Lenr..the only free way forward… Brown’s gas woohoo.. Gonna solve all our problems….:-)

  8. True Kilcockian

    In fairness we have got Fianna Fail out.
    I am sure that Michael Noonan is as honest as the day is long.
    The fact that Minister Noonan met Michael Lowry after the Moriarty report was published is not significant.
    Fine Gael are the party of honesty and probity. In fact contrary to what John Bruton said there ARE angels in Fine Gael and one of them is Michael Noonan.

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