Coalition of unions and civil society groups launch independent debt audit
Details of an independent audit to be undertaken into providing a clear picture of Ireland’s national debt were released yesterday, Wednesday 5 May. Areas of specific reference will include determining to whom the debt is owed, when it was incurred, how much of it is senior, guaranteed and subordinated debt, and when repayment is due to each creditor.
The audit will follow similar processes undertaken in Greece and other deeply indebted countries. It will be led by Dr Sheila Killian, Head of Department and Senior Lecturer in Accounting and Finance at the University of Limerick and supported by the UNITE trade union, Afri, Debt and Development Coalition Ireland as well as other trade unions and civil society groups.
Focusing particularly on the private bank debt subsumed into public responsibility, the independent audit will seek to support people in Ireland in a real understanding of the levels of Ireland's debt and its implications. It will be carried out over the coming months with preliminary findings published in June and made freely available.
“The independent audit will support people in Ireland to form an opinion on where the responsibilities lie with regard to the Irish debt crisis,” said Andy Storey, Chairman of AFRI and politics lecturer in UCD. “It will provide valuable lessons that will guide debt justice campaigning in the future and be shared with civil societies of indebted countries around the world.”
Writing in yesterday's Guardian, Storey, with Greek economist Costas Lapavitsas, described public debt in Ireland, Greece and Portugal as "a mask behind which lies a shadowy world of creditors to whose upkeep entire economies are mortgaged."
“The first exercise of debt management is to determine who you owe, how much you owe and how the debt came about,” said UNITE Irish Regional Secretary Jimmy Kelly. “Three years after the Irish government bought a ‘pig in a poke’ proffered by senior bankers, all of whom are now gone with massive pay offs, we still do not know to whom we owe this debt. Irish civil society deserves better and we are tired of waiting for those who should have undertaken this audit. Everyone who is being forced to pay for the mistakes of a small elite will at least know who is being funded by their pay cuts, tax increases and austerity.”
The audit will be carried out by three independent researchers commissioned by the sponsoring organisations and will seek to answer the following questions, amongst others:
- What is the overall scale of the Irish debt?
- To whom is the bank debt (for which the state has assumed responsibility) owed?
- When was this debt contracted? Specifically, was it before or after the government’s bank guarantee was issued?
- When does the debt fall due for repayment? And how much has already been repaid, and to whom?
- How much of the debt is senior, guaranteed and subordinated? And what are the legal implications arising from these different categories?
"Debt audits can be a powerful tool to support civil society around the world access information on the debts of their countries in order to judge for themselves whether the debts should be paid, and the implications of any payment or non-payment decisions. This is an approach which is gaining international currency at governmental and citizenry levels. For example a governmental supported debt audit has been implemented in Ecuador, and parliamentary audit initiatives are being planned in Bolivia, Brazil and in the Philippines resulting from citizen pressure for debt justice," added Nessa Ní Chasaide of Debt and Development Coalition Ireland.
A debt audit commission was established in Greece in March to investigate the legitimacy and legality of portions of Greece's debt. It is still in its preliminary stage, but, according to Lapavitsas, "These preliminary investigations will establish facts to further the demand for a full democratic audit and a sovereign response to debt. What is ultimately necessary is full access to debt data, the power to examine witnesses, and even the ability to examine bank accounts. On this basis properly constituted audit commissions could make credible recommendations on debt that is illegitimate or simply unsustainable. The sovereign state could then take appropriate action."
Image top Nils Bremer.