The time to hesitate is through
Of course January 16th won't really be the most depressing day of the year, or even of the month (maybe it will be in the UK, but given that this is the country that spawned The Only Way is Essex it would seem that they are playing by a whole different set of rules for national melancholy), for on January 25th the government is due to handover €1.25 billion to unsecured Anglo Irish Bank bondholders. In fact over the course of 2012 alone Michael Taft estimates that the state will pay Anglo bondholders €6.3 billion (of which €2.6 Billion is to unsecured bondholders), in addition to nearly €3.1 billion to cover the promissory notes issued to Anglo to allow them pay of other creditors, meaning that this year alone Anglo will cost the Irish taxpayer over €9 billion.
Burning down The Man
Burning Man, August 2008
Which would be horrifying enough if you didn't notice that the tax take for 2011 was only €34 billion, missing its projected target by almost €900 million despite the draconian changes to the Universal Service Charge and the pension levy. Of note in the year end report from the Revenue Commissioners was the fall in revenue from VAT, due to a slowdown in consumer spending. It would appear that when times are tough, people buy less, so its a good thing that no one went and radically increased the prices of almost all retail transactions earlier this week.
So payments arising from Anglo alone this year would account for over 25% of our entire national tax take for 2011, and this is before the bondpayments for AIB, BOI and the others have all been factored in.
And the worst part of it all is the high level of payments that we will be making to unsecured bondholders, ie those holders of bonds that were issued without being tied to any form of collateral, and thus who we have no legal obligation to pay back. However a quick perusal of the list of Anglo bondholders will show that a significant number of them are German banks, which is all the information you need to make sense of the European Central Bank's order to the late Brian Lenihan that no Irish bank would be allowed to fail, delivered mere hours before he issued the universal bank guarantee.
German banks bought Anglo bonds, and when Anglo collapsed the Irish government was forced by the ECB to borrow money to pay back these German banks. And where does this borrowed money come from? Why from German banks of course.
No don't get me wrong here, the Irish financial collapse was a beast entirely of our own making, but there can be no denying that the vultures of the ECB and the German and other European banks on behalf of which it operates have been pretty quick off the mark to swoop in and ruthlessly pick clean our carcass.
There really is only one course of action that can morally be taken in all this, and that is to burn the unsecured bondholders. If I buy shares in a company and the stock price collapses, I cannot then ask for my money back. If I place a bet on a horse and the horse comes last, I cannot then ask for my money back. Why should unsecured bondholders be treated any different? Investemnt is a gamble, every ad for investment firms is obliged to say so, "the value of your investment can go down as well as up, past performance is not a guarantee of future success". Every bond buyer knew what they were getting into, why should the lives of Irish women and men be sacrificed to pay the gambling debts of the banks, foreign and domestic?
On the 6th of December, the first of two extraordinary Budget days, the Government announced cuts of €475m to Social Protection, €543m in Health and €52.9m in Overseas Aid, on top of "savings" of €132.3m in the Education budget, a total of just over €1.2 billion in cuts. On January 25th the same Government will hand over €1.25 billion to unsecured Anglo bondholders that we have no moral or legal obligation to pay.
Mark the 25th of January in your calendar, if the Government follows through on its plan to place the shareholders of foreign banks above the citizens of Ireland, then it is a day that every Irish man, woman and child should take to the streets.