Our Word Is Their Bond (Updated)



Independent TD Stephen Donnelly damns Michael Noonan with the Finance Minister’s own words in the Dail earlier.

Stephen Donnelly: “Taoiseach, The Minister Noonan just asked to be quoted in context so, if I may, I would like to quote the minister on the 15th of December in this house, essentially as minister for finance in waiting.
‘Ireland’s commitments on sovereign debt and debt under guarantee must be honoured in full.  What legal or moral compulsion is there on Ireland to honour in full debt incurred by Irish banks when there was no state involvement in the arrangements? These loans were entered into freely by willing lenders and borrowers with absolutely no state participation. The interest rate charged represented the risk at the time and there was never a state liability.  It is obscene that liability for these loans is now being transferred to the Irish tax-payer.  In many respects, to the poorest of Irish tax payers.  In the budget, the minister for finance (Brian Lenihan) reduced social welfare payments, punished the blind, widows, carers and the unemployed, and he taxed the poorest at work.  And for what?  It was so that the taxpayer could take on the liability for debts the country never incurred and arose from private arrangements between private institutions.  What a disaster and an obscenity. How can the government stand over it?”
He continued “The latest available bank data shows that the Irish guaranteed bank debt has been sold on At a discount to hedge funds in the US, the UK and Luxemburg as well as to smaller speculative investors.  The position has now become indefensible that the Irish taxpayer, even the poorest tax-payers should be required to underpin the speculation of hedge fund investors.  There must be transparent, open, negotiated burden sharing of bank debt’.
That is a minister for finance that I would have been proud of. That is a minister for finance who I believe feels these things, and I believe has made a call that the lesser of two evils is to pay this money.However, the technical group at the start of this Dail called for a referendum on this. And the government understandably said “We’ve just had a referendum. It was the general election.  We therefore have a clear mandate.”
Taoiseach, I would put it to you that this is the mandate that you had.  And if you are not doing this, in fact if you are doing exactly the opposite, there is a very strong case for putting this back to the people again. The reality in office is we have heard yourself, Taoiseach and we’ve heard the minister for finance on national airwaves and on international airwaves repeatedly say “We will pay our debts. Ireland will pay its debts. We are a country that can pay its way in the world”.
I believe that every time you say that, you make it more  difficult for us to enter into voluntary arrangements, as we saw in Greece, on the senior bank debt and as we are now going to see on the sovereign debt.  So what are the arguments for paying this, accepting that none of us want to pay this money?  I have heard three arguments. Taoiseach, I heard you reference an agreement this morning with the ECB.  Now I have asked through parliamentary questions what that agreement is.  The minister in reply said he wasn’t aware of any agreement as referenced by Patrick Honohan in a television interview With Vincent Browne
So we don’t know, as parliamentarians, we don’t know what agreement there is.  The language being used is ‘a nod and a wink’.  So I would ask you to supply to the house and the people of Ireland, the details of that agreement with a cost/benefit analysis as to why you are doing what you are currently doing.
The ECB’s initial position was that it was paramount that no European senior debt and no European sovereign debt should be restructured. Those things have both happened now, so that position no longer stands. Further, I would put it to you that the ECB threat, at least the supposed threat that they would withdraw emergency liquidity assistance is not a credible threat. It would achieve exactly what the ECB says it is trying to stop, which is a collapse of the European banking system. It is also fair to say that nobody agrees with the ECB. I don’t think we agree with the ECB, the IMF has stated that it doesn’t agree with the ECB and I would suggest that It is a ridiculous argument on behalf of the ECB that Ireland not paying €715,000,000 to people who we all accept at this point are short term speculative investors would collapse the European banking system.  It’s simply not a credible position.  Taoiseach, you reference county councils this morning, but by your own admission we don’t know who these people are, so we don’t know who we are bailing out.

So, finally I would just like to say to the Taoiseach and to the minister, I absolutely accept that you are acting in what you believe are the best interests of the country.
However, I and others have received hundreds of emails saying that this is not what they want.  It is not the mandate you were elected on and I would ask you to reflect on that and at the very least come back to the parliament and potentially to the people, Lay out the pros and cons and let the people decide. Thank you.”

Thanks Tom Red
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