An Irish bank debt deal
Sir, – There is little doubt that we are indebted to our Minister for Finance and his colleagues for the outcome on the promissory note.
He again showed, however, that he needs to be careful with his dry wit and similes. When illustrating how inflation will take care of reducing the payments due at the end of the new long-term bonds, he used the example of the huge inflation in the value of the first house he purchased some 50 years ago. That was not the most apt comment in a situation where a lot of his listeners have had the opposite experience and that took only a few years. – Yours, etc,
Sir, – Whatever about its content, the headline on your leading article (“Frankfurt’s way”, February 8th) was a cheap shot; more Sunday Independent than Irish Times. In the editorial itself, you complain about “the lengthly circuitous process by which the deal was negotiated”. Did you really expect anything else?
You further complain about “ill-advised political declarations and warnings of catastrophe”. The loudest of such declarations have undoubtedly come from the media, your paper being no exception.
If a good deal has been done in difficult circumstances, as I believe it has, why not give it a wholehearted “well done” instead of the mealy-mouthed acknowledgment you published on Friday. And just look at your Letters page! Was their any letter that thought the deal was okay? – Yours, etc,
Sir, – Thursday’s victory was Ireland’s financial Stalingrad, the Government held the line and then began turning the tide in Ireland’s war for economic freedom. Unfortunately, instead of congratulating the Government, the whingers are expecting an immediate overrun of Frankfurt and Berlin. – Yours, etc,
Sir, – Our Taoiseach, Minister for Finance and other Government sources have all chosen to use a mortgage analogy to explain the intricacies of the deal concluded on the promissory notes.
Michael Noonan used his personal circumstances to explain that the mortgage he took out in 1968 equated to his monthly salary some 25 years later. Mr Noonan neglected to mention that at the conclusion of his mortgage he received the title deeds to his home, a valuable asset which he could convert to cash or use.
My now six-year-old son will assume the burden of this repayment, yet will not be able to marvel at the architecture and infrastructure which €30 billion could have financed. He will complete his formative education in damp, cramped prefabricated structures, much as I did 40 years ago.
Ironically, the deal was completed with the tacit assent of the ECB, whose primary role is to contain inflationary pressures. It is unlikely we will witness such inflationary pressures as those which magicked away Mr Noonan’s mortgage.
If we are to use the mortgage analogy then it should be fully adopted. We bet the house, lost it, and are now to rejoice in the fact that we have a good deal on the mortgage. – Yours, etc,
Sir, – David Begg says of the deal on the promissory notes “It is complete nonsense .. a wholesale fraud on the Irish people” (Opinion, February 8th). On the same page Stephen Collins states “That will help the country back on the road to recovery. . . should pave the way for Ireland’s exit from the bailout”(February 8th). Excellent balanced reporting that leaves one most enlightened . . . or totally confused. – Yours, etc,
Sir, – The Government asserted that Ireland deserved a deal on its bank bailout debts.
If we are to believe its public utterances, it claimed that Europe had a political, moral and economic duty to alleviate the debt. Can it now make some gesture to ease the burden on the thousands of ordinary mortgage-payers who are in negative equity and live in mortal dread of eviction, repossession and financial ruin?
The vast majority of these mortgages are held by either State-controlled institutions or those who would have collapsed were it not for State largesse. If we are to recover our nation’s prosperity, it is most likely to be because of the efforts of these hard-working people who have made such an effort to improve their situation and provide a better life for their families.
One rarely hears the word mercy used by our Government, perhaps because it is a quality that it sorely lacks. – Yours, etc,
Sir, – Last week Michael Noonan again brought forward the notion that the Weimar hyperinflation is the reason for Germany’s knee-jerk antipathy to central banks funding of government(s).
What is misunderstood – apparently all round – is that Weimar’s inflated money supply was the result of money creation being in the hands of private banks. Hitler nationalised the Reichsbank in 1932 – how else did the catastrophic economy of 1920s turn into an – almost – world beating war machine by 1939?
Our current woes are the result of private banks creating money to suit, not the economy, but themselves. Until this mistaken belief and social injustice is corrected, we – not just Ireland, or Europe, but the western economies generally – will lurch from man-made crisis to man-made crisis. – Yours, etc,
Sir, – Will those who insisted that Anglo Irish Bank was systemic and must be retained at all cost now please stand up. – Yours, etc,