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Posts tagged ‘Michael Noonan’

IRELAND HAS JUST DESTROYED €500M – WHO CARES

By Diarmuid O’Flynn

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When Michael Noonan announced his Promissory Notes ‘deal’ in February of last year it was hailed by our media as a triumph. ‘Promissory Notes destroyed!’ screamed the headlines; ‘€20bn saved over the next ten years!’

Big news indeed, but what our media didn’t tell us was even bigger.

1) The Promissory Notes were indeed destroyed, the little bits of paper the ECB had accepted at their convenience to bail out the European big-bank creditors of two bust Irish banks, Anglo and Irish Nationwide; the Promissory Notes debt wasn’t, not a cent of it.

2) On the €20bn ‘saved’ over the next ten years – absolutely not true. If you buy an item that’s been reduced from €40 to €20, you have saved €20; if you alter a debt schedule so that you pay €20bn less in the next ten years but pay €60bn over the following 30 years, that is not ‘saving’ €20bn.

THE REAL NOONAN DEAL

What Michael Noonan did was this; to take the pressure off his budget for the remaining years of this government from 2012 onwards (because had had actually pulled this same stunt for the 2012 Promissory Note – a practice run, if you like), he restructured the Promissory Notes payment schedule such that the burden of payment would be shifted from this generation to the next, and to the next. No more no less. 

It was betrayal, not just on a national level but on a human level – what parent, rather than challenging ‘totally’ illegal debt (Michael Noonan’s own description of the Promissory Notes), debt he had previously eloquently and forcefully rejected and simply to make life easier for themselves, passes the burden of payment to their own children and grandchildren? Under the terms of this deal, that is what Michael Noonan has done but not just on his own behalf – on behalf of us all. Thanks to Michael Noonan, that is the legacy of this generation of Irish people to the next.

BURNING BILLIONS

There was something else we weren’t told, either by Michael Noonan or by our media, something of even greater import.

The money raised from the sale of the new Promissory Notes bonds, all €28bn of it (including the €3bn from the 2012 bond) is destroyed, every cent of it. Why? Why is a broke, massively-indebted small nation destroying the equivalent of the entire tax intake for 2010, the year the Promissory Notes were issued? Because the ECB, who facilitated the original issuance of those notes (feared contagion across Europe if any bank in the EuroZone was allowed fail), is insisting that the entire €31bn printed that year by the Central Bank of Ireland and given directly to the two bust banks to bail out their creditors, must now be taken back out of circulation. By us.

And it has started.

Buried in the back end of a report from RTE yesterday, Tuesday December 22nd, an early Christmas present for the nation. Again, as has become so typical for the official spinner of government half-truths, it wasn’t so much what was said, it was what was left unsaid.

‘Separately, the NTMA has announced the cancellation of €500m worth of bonds relating to the Irish Bank Resolution Corporation. The Irish Floating Rate Treasury Bond was issued as part of an arrangement that saw the Anglo Irish Bank promissory note replaced with new debt. Its issuance was part of the process that has ultimately led to IBRC’s liquidation. Today the NTMA purchased €500m worth of the bond – which was due to mature in mid-2038 – from the Central Bank. It said the cancellation of this amount will leave €1.5bn worth of the bond outstanding.’

Reading the above, would you have any idea that this country has just borrowed and destroyed €500m, dwarfing what’s going to be raised from the ill-fated (it will fall) Water Tax? But we have. ‘Cancellation’, that’s what the RTE report says; ‘destruction’, that’s what it means.

3-in-1

But there’s more – it’s a triple-whammy. As soon as that €500m was received by Patrick Honahan in the Central Bank on Tuesday:

  1. It was destroyed
  2. We start paying interest on it
  3. In 2038 the new bondholder (wouldn’t it be some irony if it’s one of the same bondholders we bailed out back in 2010???) will come looking for the entire €500m principal to be repaid.

JUST THE START

The €500m borrowed/burned on Tue is just the start of the new Noonan P Note bond schedule.

  • 2014-18 (incl – five years): €500m/yr borrowed/burned
  • 2019- 23 (incl – five years): €1,000m/yr borrowed/burned
  • 2024- 31 (incl – eight years): €2,000m/yr borrowed/burned
  • 2032: €1,500m borrowed/burned
  • Meanwhile, €3bn bond from 2012 also sold, those billions also destroyed.
  • And all the while, as the bonds are sold the debt-clock ticks faster and faster, the interest increasing, the debt-burden piling up. Over the next 40 years, on the entire €31bn, we won’t have any change from €80bn. Some legacy.

No matter how you read it, it’s obscene.

In Ballyhea we’ve been protesting this for nearly four years, joined now every week in their own places in that protest by Charleville, Ratoath, Dublin. This coming Sunday, December 28th, is our 200th week. If this has angered you enough, if you have the time and the inclination, you’re welcome to join us in Ballyhea – 11.30am, at the church car-park.

Germany, the European Commission and ECB threatened to force Ireland out of the euro

Philippe Legrain – who was personally headhunted by Commission president Manuel Barroso, below, in 2011 to advise him on economic strategy – gave a damning condemnation of what he said amounted to “bullying” by the EU.
“It was outrageous of Germany, the European Commission and above all the ECB to threaten to force Ireland out of the euro if it did not follow through with that foolish guarantee, lumbering Irish people, who have already suffered enough from collapsing house prices and a sinking economy, with a €64bn bill to bail out bust banks, €14,000 for every man, woman and child,” said Mr Legrain, who left his job at the Commission earlier this year to release a book condemning the EU’s handling of the financial crisis.
“Ireland’s partners abused the fact that it desperately wanted to be part of the euro”.
“I understand why the Irish government did what it did (agreed to implement a bank guarantee) but they could have stood up for themselves . . . the European Central Bank would have blinked,” the former London School of Economics academic added.
Promises
Ireland’s only chance to mitigate some of this damage is by getting some of its legacy bank debts written off, he said. The Department of Finance has not made any progress on this issue so far, despite repeated promises of a deal by Finance Minister Michael Noonan.
“The State must use any leverage it can to negotiate a write-off,” he said. “Its best weapon is any proposed changes to EU treaties – because Ireland constitutionally has the right to hold referendums on these changes and can use this as a bargaining tool.” Any decision that Germany really wants which requires a unanimous decision from all member states could be used as leverage, he said.
“Ireland needs to play hardball now. It’s in a much better position, borrowing at record-low borrowing rates”.
Mr Legrain said the eurozone has been built along German lines. “The Commission has failed in that it has been much too keen to align with Germany,” he said.
Fundamental flaws in the European banking model still have not been resolved seven years after the crisis emerged, he added, and the much-hyped stress tests due to be carried out on banks later this year are unlikely to help.
The equity/debt ratios these stress tests look at are far too low, he said, adding that the ECB, which will soon take over the direct regulation of big banks like Bank of Ireland, AIB and Permanent TSB, is a deeply flawed organisation.
“Throughout the crisis, the ECB has furthered the interests of French and German banks and proved itself to be unimpartial.”
Legislation designed to wind down banks and prevent a “too big to fail” situation is also flawed, he said, because national governments still have the right to veto the forced closure of banks in their jurisdiction.
source :Irish Independent http://www.independent.ie/business/irish/irish-were-bullied-and-treated-outrageously-during-crisis-legrain-30250226.html

“countries about to go bankrupt should draw on the private wealth of their citizens”

in what is sure to be met with cries of derision across the European Union, in line with what the IMF had previously recommended (and we had previously warned as inevitable), the Bundesbank said on Monday that countries about to go bankrupt should draw on the private wealth of their citizens through a one-off capital levy before asking other states for help. As Reuters reports, the Bundesbank states, “(A capital levy) corresponds to the principle of national responsibility, according to which tax payers are responsible for their government’s obligations before solidarity of other states is required.” However, they note that they will not support an implementation of a recurrent wealth tax in Germany, saying it would harm growth. We await the refutation (or Draghi’s jawbone solution to this line in the sand.)

Via Reuters,

Germany’s Bundesbank said on Monday that countries about to go bankrupt should draw on the private wealth of their citizens through a one-off capital levy before asking other states for help.

The Bundesbank’s tough stance comes after years of euro zone crisis that saw five government bailouts. There have also bond market interventions by the European Central Bank in, for example, Italy where households’ average net wealth is higher than in Germany.

(A capital levy) corresponds to the principle of national responsibility, according to which tax payers are responsible for their government’s obligations before solidarity of other states is required,” the Bundesbank said in its monthly report.

It warned that such a levy carried significant risks and its implementation would not be easy, adding it should only be considered in absolute exceptional cases, for example to avert a looming sovereign insolvency……..

full article at source: http://www.zerohedge.com/news/2014-01-27/bundesbanks-stunner-broke-eurozone-nations-first-bail-your-rich-citizens

Comment:

goldcore_bloomberg_chart1_03-12-13

Citizens of Ireland, get ready to have your bank account raided by Mr. Noonan and his gangster’s pals in the Irish Government! They are about to come and steal your money under the guise of saving your bank from bankruptcy: Welcome to Bail-ins!

Get you money out of these Zombie Banks before it’s too late!

Perfect Storm Brewing for Ireland’s Economy

By Global_Research

Caoimhghin Ó Croidheáin writes: “We are now mainly borrowing to pay interest on the burgeoning national debt”[1]

While much has been made recently of Ireland’s exit from the punishing EU/IMF bailout programme, Michael Noonan, the Finance Minister, has welcomed post-bailout ‘surveillance’. Dutch Finance Minister Jeroen Dijsselbloem, said Ireland would be subjected to ‘intensive surveillance’ “twice a year, but this would involve monitoring as supposed to new measures being imposed” because “under new European budgetary rules, countries leaving a bailout will be subject to extra attention until at least 75pc of the money owed is repaid.”[2]

The Taoiseach (Prime Minister), Enda Kenny, has even gone so far as to state that Ireland would exit the bailout without the safety net of a credit line. Unfortunately for him Ireland’s economic crisis will not go away that easily. The economic consequences of the bailout may be about to bounce back and hit him in the face. Interest repayments are already taking a huge chunk out of the economy and the Irish people will be paying back EU [EFSF and EFSM] loans until 2042 and IMF loans until 2023. A fundamental economic crisis is in the making.

In 2007 Ireland’s general government debt was €47.2bn. It is estimated to be more than quadrupled to €205.9bn by the end of 2013.  As the debt has grown so have the interest repayments. In 2012 the ‘underlying’ deficit (deficits excluding direct payments to banks) was €-13.5bn of which €-6.7bn was interest repayments showing that interest repayments grew to become 50% of the deficit compared to 2008 when the deficit was €-13.2bn of which €-2.4bn was interest repayments. [See table below]
UnderlyingDeficits[5]

[Underlying Balance = Primary Balance + Cash Interest + Prom Note Interest]

http://economic-incentives.blogspot.ie/2012/03/changing-nature-of-our-budget-deficits.html

Even the somewhat positive projections for 2014 show that all the money to be borrowed, €8.3bn, is to be spent on interest repayments.

Ireland’s low corporation tax of 12.5%, and therefore a low corporation tax take, means that ordinary taxpayers are expected to make up the shortfall. For example, in 2012, the combined figure for income tax and VAT was €25.35bn while corporation tax came to €4.22bn. [See table below]

Fiscal-Table1_2

full article at source: http://www.marketoracle.co.uk/Article43172.html

From “Gathering”to “Scattering”

The political parties in the Irish Government are indeed the friends of the Irish Youth! This is their real message.”Get lost “

Youth in Ireland

see also :

 By David Burns

I last wrote for Generation Emigration about the desire to make my way home as I’d never got to know the place before I left it. It seems, especially as of yesterday, that I will be swimming against a rising tide.

Logging into the Zuckerberg express last night, I saw my friends back home were all posting protests or travel plans. A few of them ‘shared’ the call of activist group 1913 Unfinished Business, aiming to demonstrate outside the Dáil today at 5pm.Others had retweeted the quip that, cutting both Dole payments for U-26 and air tax, Michael Noonan might has well drop ‘the lads’ down to Australia himself.

Personally, I can understand the view held by the Government and others that people of that age group should be in work or education. I can understand it, despite national figures standing at 30.8 per cent for youth unemployment, because people normally equate youth with resilience. I can understand a general dismissal of protest movements against the 2014 budget because people habitually equate youth with irresponsibility as well.

full article at source: http://www.irishtimes.com/blogs/generationemigration/2013/10/16/with-this-budget-government-policy-changes-from-gathering-to-scattering/

see also : http://www.irishtimes.com/news/video/?vid=1.1570568

Apple tax loophole in Ireland

From  MarketWatch

Ireland’s finance minister, Michael Noonan,

housing-debt

 

 

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