Newsdesk: Campaigners Urge patrick Honohan to 'do the right thing'
07 April 2014
Anglo: Not Our Debt Campaigners urge Patrick Honohan to ‘do the right thing’
Debt Justice Action – a coalition of community, trade union, global justice, academic and faith-based groups that hosts the Anglo: Not Our Debt Campaign – has today launched a campaign urging Irish Central Bank Governor, Patrick Honohan, to “do the right thing” and stand up to the European Central Bank.
The group is responding to pressure from the European Central Bank, communicated today through its Annual Report, that the Irish government's decision to convert the Anglo promissory notes into sovereign bonds with a longer repayment period raises “serious concerns” in relation to the monetary financing of states. The ECB further indicated that its concerns may be “somewhat” mitigated through the “disposal strategy” ie: the sale of the bonds on the international markets, which the Anglo: Not Our Debt campaign reads as pressuring the Governor of the Irish Central Bank to sell the bonds more quickly than planned.
Nessa Ni Chasaide of Debt and Development Coalition Ireland said, “the Anglo: Not Our Debt campaign is and always has been opposed to the socialization of the Anglo debt. The problem is not whether the Irish government is contravening EU law in paying for the bonds over a period of 39 years, but that this debt is the responsibility of the people of Ireland at all.“
Dr Marie Moran of the UCD School of Social Justice commented “Governor Patrick Honohan should resist ECB pressure, freeze the sale of the Anglo bonds with a view to negotiating a full write-down of this odious and illegitimate debt. The events leading to the socialisation of the Anglo debt are under criminal investigation. It was never our debt and it should not be paid.”
She continued, “The ECB is wrong to demand the sale of the bonds on the markets. It makes a bad situation even worse. This is because by trading the bonds internationally, we will once again put Ireland’s fate in the hands of the same class of creditor that caused this crisis – and who will of course put up a serious fight if they are not paid.”
The campaign points out that selling the bonds will probably cost us over € 1 billion in interest payments, not even counting the maturing debt principle, that would otherwise stay within the Irish state. By trading the debt on the private markets, the Irish Central Bank will have to pay interest to private bondholders, rather than keep the interest payments within the Irish state system.
The Anglo: Not Our Debt campaign are calling on people to contact Governor Patrick Honohan and to ask him to “do the right thing and to freeze the sale of the Anglo bonds”.
For interviews contact:
Nessa Ni Chasaide, Debt and Development Coalition Ireland, 01 6174835 or 087 7507001
Marie Moran, UCD School of Social Justice, 086 3212217
Notes to editor
The campaign launched today by the Anglo: Not Our Debt campaign urging Patrick Honohan to do the right thing can be found here: http://www.debtireland.
The ECB stated today in its Annual report that: “The liquidation of the Irish Bank Resolution Corporation (IBRC) raises serious monetary financing concerns. These concerns could be somewhat mitigated by the disposal strategy of the Central Bank of Ireland.” ECB Annual Report 2013, p. 110 http://www.ecb.europa.eu/
The Anglo: Not Our Debt campaign position on the Anglo bonds is as follows:
- This debt is the debt of gambling bankers. It represents almost half of the overall socialised banking debt being paid by people in Ireland. It is not our debt and we should not pay any of it. While the deal lengthens the payment period (to 39 years instead of the original 17 years), the converting of the promissory notes into bonds means the government believes that the Anglo debt is a legitimate debt that should be paid. It shouldn't.
- The government has now made it more difficult not to pay this debt. The promissory notes were basically an inter-agency promise between state agencies – the Irish government, Anglo (state owned) and the Irish Central Bank. They could have decided between them not to pay it, or at least negotiated hard with the ECB for agreement not to pay it. By changing the debt into bonds, the debt will now be traded internationally and we will owe it to private bondholders instead – who will of course put up a serious fight if they are not paid
- Selling the bonds will probably cost us over € 1 billion in interest payments that would otherwise stay within the Irish state. By trading the debt on the private markets, the Irish Central Bank will have to pay interest to private bondholders, rather than keep the interest payments within the state system. The bonds will carry a floating interest rate so we don’t know exactly how much they will cost us. But once they are all sold it’s likely that the annual interest bill will be over € 1.3 billion– not even counting the maturing debt principle.
For all these reasons, Ireland should not sell these bonds to private bondholders. The Governor of the Irish Central Bank, Patrick Honohan should freeze the sale of the bonds, pending a full cancellation of this illegitimate debt.
The Anglo: Not Our Debt campaign is a coalition of justice organisations. Our website is here: http://www.notourdebt.ie
