Madam, – The inevitable has happened. The bank bailouts and Nama and the absurd strategy both interventions encompass have failed utterly, making our national and international position infinitely more difficult. The basic law of commerce has been turned on its head and the credibility of the Irish nation badly damaged in the process.
When investors lend money, the rate of return is governed by the risk element of the transaction. The bigger the risk the greater the return.
When international institutions lent to Irish banks during the boom they made good profits but they took the normal risks of commerce. When the property market collapsed and Irish banks were on the verge of failure the natural progression would have been loss of the investments. The default would have been by private or public institutions, not by a national government. The Dáil decided for inexplicable reasons to thwart the normal laws of commerce and foist a double bailout of the foreign lending institutions on the Irish people.
Defaulting on these loans would not have been by Ireland Inc; it would have been by a group of totally irresponsible institutions who happened to be Irish. Not any more. Now the Irish nation is the possible defaulter and the economic powers of Europe are very conscious of that possibility. They realise that national default is much more likely now because billions to the banks and to Nama have exhausted Ireland’s potential to repay. Hence their latest pledges of support; but the real indicator of Europe’s expectation is the rate we are required to pay for current and future loans.
The devisers of the bank bailout and Nama strategy must be held responsible. The motivation for their actions must be established beyond doubt. A necessary question, never yet asked by an apparently compliant media, is whether the participants were in any way compromised by loans.
Were any substantial borrowings from lending institutions, millions or tens of millions or hundreds of millions held directly or indirectly by any of the decision makers? If the answer is negative we must admire the fortitude of those who, despite ample opportunity to realise any level of credit they desired, refrained from this temptation when the general consensus was that any one of ambition was practically retarded for not getting involved in the property boom.
This is not an accusation, it is a question; a question the Irish nation is entitled to have asked and answered. Democracy itself may depend on it. – Yours, etc,