Thursday, February 7, 2013

The IBRC Bill turns bad banking debt into soveriegn debt

Late on Wednesday evening February 6th the Irish government rushed to introduce emergency legislation into the Oireachtas to liquidate Anglo-Irish Bank, now called the Irish Bank Resolution Corporation.

This was part of a package of moves by the government which it claims will allow it to avoid paying the annual €3.1 billion Promissory Note.

Sinn Féin voted against the Bill.

In my contribution to the debate I said:

This Bill will turn bad banking debt into sovereign debt - Adams

Sinn Féin President Gerry Adams TD speaking in the debate on February 6th on the liquidation of Anglo-Irish Bank said:

Here we are at 1.30 a.m. and we have not been told anything by the Government about this issue. The most revealing part of the Minister's contribution was the following statement:

‘I would have preferred to be introducing this Bill in tandem with a finalised agreement with the European Central Bank. However, I understand the European Central Bank will continue to consider the proposals made by the Governor of the Central Bank of Ireland, with the agreement of the Government, tomorrow.’

 Why can the Dáil and the people not be told what these proposals are?

Why can this Bill not be brought forward in tandem with that finalised agreement tomorrow?

Instead, we are presented with legislation in a vacuum. We did not even receive it until 10.30 p.m., our finance spokespersons did not receive proper briefings and the European Central Bank has made no statement.

The Bill is but one half of a package and the Dáil is being denied the right to see the other half.

We cannot even table amendments to the Bill.

This is the Government that promised to operate in a different way. Deputies are denied the right to speak on this issue.

This is not the way in which the Dáil should be doing business. It smacks of the type of stroke politics that Fianna Fáil pulled in its time and that Fine Gael and Labour rightly condemned.

The actual liquidation of Anglo Irish Bank, as opposed to the nonsense we are discussing tonight, should have been done when the bank first collapsed.

That is what Sinn Féin argued for.

This toxic bank and its connections with speculators, developers and corrupt politicians, the "golden circle", brought this State to its knees.

Instead of closing the bank down, Fianna Fáil bailed it out and poured billions of euro in taxpayers' money into it.

Labour came along with Fine Gael and did exactly the same.

Instead of liquidating the Irish Bank Resolution Corporation the Government wants to compound this mistake by turning bad banking debt into sovereign Government bonds, in effect, a Government promissory note.

It wants to wind the bank down, but it does not want to wind down its debt.

The Government wants the citizens to fall for this and for the Bill to be passed in two hours.

This comes after nearly two years of negotiations that the Taoiseach continuously claimed were too intense, detailed and technical for ordinary mortals and decent Deputies to understand.

Suddenly, the Bill now has to be rushed through. This is a mark of the Government.

The Dáil has never seen the fabled technical paper on the promissory note that, according to the Taoiseach, the Minister has been working on for 18 months. Where is it?

What of the Government's claim in June that there would be a deal on legacy debt by October? Where is it?

This is no way to deal with the Dáil.

 There is a certain benign arrogance about the way the Government treats the Oireachtas and the State's citizens, including the workers of IBRC.

No amount of crocodile tears will undo the fact that, without notice and through the media, the workers were informed that their jobs were finished.

This is no way to deal with any kind of legislation, certainly not legislation as important as the Bill before us.

To our cost, the State's citizens have learned that rushed legislation is bad legislation.

Let us remind ourselves that the Government's proposal is a U-turn on the claims following the European Council meeting in June that there would be a deal on legacy debt by October.

That month has come and gone, as has 2012, yet there is still no deal on legacy debt.

Neither is there a separation, an idea to which the Government was converted after rubbishing Sinn Féin's championing of the need to separate banking debt from sovereign debt.

On the contrary and even on a cursory reading, the Bill will turn bad banking debt into sovereign debt.

The Bill reads: "And whereas the winding up of the IBRC is necessary to resolve the debt of the IBRC to the Central Bank of Ireland".

No one should be surprised. This Government promised that it would not give another red cent to bad banks.

Then, in one of its first acts as a Government, it paid €3.1 billion to Anglo Irish Bank. Despite our best wishes and us willing the Government to do well, this is no game-changer or seismic shift.

The critical issue was never whether there would be a deal; it was what type of deal would be done.

Sinn Féin has long advocated a deal that would remove the toxic banking debt from the shoulders of Irish citizens.

That is not what is being proposed. This is not a write-down.

The Government never asked for a write-down.

 It never negotiated for one and it did not seek one.

The overall stock of the debt remains the same.

 With interest, it might be larger.

 The Government might be winding up Anglo Irish Bank as an institution but not its debt.

Sinn Féin does not accept that restructuring or paying the debt over a longer timeframe is a credible deal for the taxpayer.

The fact is, as the Minister said in opposition, the promissory note should not be paid. It should not be paid for the simple reason we cannot afford to pay it.

It is not our debt.

The Government’s approach will tie this bad debt to citizens for decades to come – our children and grandchildren will have to pay billions.

We are handing a legacy debt to them and we have no idea what the economic and political circumstances will be when the bonds mature.

That is wrong.

We should not place on the shoulders of children not yet born a legacy which might well damage their future.

That is not good government. It is not good strategic, visionary government.

It is short-term, short-sighted opportunism.

It is matched only by the Government’s flawed negotiating approach.

The Government needed to tell the ECB and the EU that enough is enough.

Instead, it told the ECB and the EU that it would honour the debt, that the Government would not have the word “defaulter” written on our foreheads, and it gave up its best negotiating hand at the outset.

The Government finds it easier to be tougher on citizens than it does on our partners in the European Union.

It has cut respite care and child benefit, the back to work clothing and footwear allowance and it has taxed maternity benefit.

A family home tax is being introduced and septic tank charges have been imposed. It is easy for the Government to be tough on the small people.

There will be no relief in what the Government is doing because it is tied to austerity.

There will be no relief from the relentless austerity citizens have endured to bail out bankers.

Every billion of the bad debt that is paid is a cut to the health budget, an increase in PRSI, a new property tax, more over-crowded classrooms, more workers out of jobs, more families struggling to make ends meet, more Garda stations being closed and more nurses emigrating.

A credible deal is one that will bring relief to citizens.

There have been six austerity budgets, which have taken €28 billion out of the economy.

Sinn Féin has long argued for the end of the IBRC. What we simply cannot support is turning the bad debts of this bankrupt bank into sovereign debt.

It is not our debt.

It does not belong to the people of this State and it never was.

Fianna Fáil saddled us with it in the first place.

Sinn Féin cannot and will not support the Government in doing this.

The Government should not proceed with the Bill. It should bring forward the entire package, finish its deal with the ECB.

The Minister should not miss the point I make.

We can all be smart alecs but Members should listen to what I say.

The Minister should introduce the entire package and deal with people as mature citizens who should be empowered by Government, not denied their rights.

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