'Why are the most egregious offenders here not being pursued?'

Andy Storey of the Not Our Debt campaign was on RTÉ’s Late Debate last night with, amongst others, barrister Paul Anthony McDermott and Labour TD Joanna Tuffy. He explained what the campaign was about, what the consequences of suspending payment of the debts incurred by Anglo Irish Bank and Irish Nationwide would be, and why the Irish people do not have a moral obligation to pay for the excesses of individuals such as Seán Fitzpatrick and Michael Fingleton.

A transcript of part of the show is below, and you can listen to the full debate on debt justice by clicking the play button on the Soundcloud player embedded at the bottom of the piece.

Andy Storey: Through different routes [all of the groups involved] have arrived at the same conclusion, which is that we have to suspend payments of the debts arising from the activities of Anglo Irish Bank and Irish Nationwide and we have to enter into negotiation with a view to writing those debts down. And without doing so we are going to condemn this country to a decade, or two decades of austerity.

Claire Byrne: What are the consequences of doing what you say?

Storey: Well, the first point to make is that the consequences of not doing what we’re saying are extremely severe. We’re already seeing 15% plus unemployment, we’re seeing very high rates of emigration, we’re seeing, for example, today, at the launch of our campaign John Bissett from the Canal Communities spoke and talked about the way the heart is being ripped out of already deprived communities by the cutbacks that are being inflicted at the moment. The consequences of the status quo are extremely damaging.

We would argue very strongly that the consequences of suspending payment on this particular tranche of the debt would not be by any means catastrophic, in fact they would be quite beneficial. We don’t see any way in which this would spread contagion through the European financial system, we don’t see any way in which funding for the pillar banks, AIB and Bank of Ireland, would in any way be reduced…

Byrne: But just on that point, Andy, who do we owe this money to?

Storey: The great bulk of this money is effectively owed to the ECB at this stage.

Byrne: And the ECB fund AIB and Bank of Ireland at the moment…

Storey: Yes, they do.

Byrne: So there would be a problem there…you could envisage that we would certainly at the very least irritate the ECB.

Storey: You could, but if the ECB were to cut off funding to the pillar banks then that would precipitate precisely the bank collapse and contagion effect that they have been desperate to avoid. So in theory, that retaliation is available to them, in practice the consequences for them of actually doing that are so catastrophic and would go so far beyond Ireland that it seems to us that this is not something that is actually viable.

Byrne: So you’re gambling on them not taking the nuclear option when it comes to banks that are owned or partially owned by the State?

Storey: There’s no interest to them in taking that nuclear option, or even anything close to the nuclear option. And as I said, at the moment we are gambling, and we are throwing away the lives of vast swathes of our society. So at some point we have to make a judgement call, we have to open up a negotiation process. And the only way we can open up a negotiation process is by suspending the repayments that are due.

Another significance of the Anglo Irish/Irish Nationwide debt is that this is the debt which is falling due this year. There’s a bond falling due for €1.25bn next week, there’s a so-called promissory note that the Irish Government is going to pay for in excess of €3bn at the end of March. The sums involved are absolutely enormous, and if you think what they could do if they were retained in Ireland – and there is no possibility that we will enter into any kind of negotiation to write this debt down if we keep on putting the cheques in the post.

Byrne: And remind us what the cost of this debt would be, the estimated entire cost

Storey: The total cost of the promissory notes is in excess of €31bn, but then you have to factor in the interest payments, which takes the bill up to about €47bn. But wait, it gets worse because if Ireland were to try and repay that in full we would actually have to go to the markets in order to borrow the money, and we would also, probably, have to borrow it at a higher rate of interest than the initial rate of interest on the promissory notes. So this bill, according to some estimates, could rise to somewhere between €80 and €90bn. And this is a bill that would be repaid every year for the next twelve to twenty or more years. So this is something that is really a ghastly prospect that is stretching out into our future.

Byrne: Paul, what do you think of the idea?

Paul Anthony McDermott: Well, we all have to pay the debts of our parents, the idea that every generation can start afresh if that was the way life worked, but of course, children have to deal with the country as their parents have left it to them, and they’re not allowed deal with it by saying simply we’re beginning afresh, we’re sorry Europe, we were only children when all of this happened so you’ve got to treat us as a new country. This idea that you can solve our debt problem by saying ‘We’re just not going to pay it’ is intellectually one step away from a magician pulling a white rabbit out of a hat.

Byrne: But in fairness, Andy Storey is not saying that. Andy, you’re not saying ‘Let’s just walk away,’ are you?

Storey: No, we’re not, we’re calling for a suspension of payments with a view to renegotiation of a writedown of the debt. And contrary to Mr McDermott’s assertion, this is quite common practice. A huge number of countries have had their debt written down – Greece is in very difficult and problematic circumstances having some debt writedown negotiated at the moment; a lot of the organisations in the debt justice action network or global justice organisations they would be familiar with what’s happened in countries like Ecuador and Argentina, where indeed the children have been allowed to walk away from a large chunk of the debts that their parents ran up, or, more precisely, that some people’s parents ran up.

And this is a crucial point, here: Irish people are not responsible for this debt. The people who are responsible for this debt are the banks who lent to Anglo, and Anglo itself, and the various regulatory authorities. Irish citizens, Irish civil society, does not bear a moral responsibility for this debt. And that’s a crucial point. And that’s where a lot of the global justice organisations involved in this are coming from.

I’ll give you examples of countries which have acted in a conscientious way, like Ecuador, and they have not been blighted, they have not been cast into pariah status…

McDermott: When it’s suggested that Irish people aren’t responsible for it…presumably it was Irish people taking the loans from Anglo, it was Irish people buying houses, it was Irish people building shopping centres. Presumably if Anglo had made hundreds of billions Irish people would hardly be saying: ‘That money doesn’t belong to us! It’s not our problem…’

I mean, obviously it’s been nationalised now, we had to do that…

Storey: Why did we have to do that? This question: we have to do this, we had to assume responsibility for these debts: why? These debts for the most part were not loans to homeowners, these were debts for massive property speculation. They generated perhaps some benefit for the Irish economy in terms of employment, but the gains, the profits, were entirely reaped by, in the first instance the Seán Fitzpatricks and Michael Fingletons of this world, but in the second instance by those banks, hedge funds and others throughout Europe who lent money to those people. I mean, in a normal functioning economy, those people would have taken the hit. They would have said: ‘Ok, we made a bad investment in a bad bank in Ireland and we’re not getting our money back.’ There was no moral obligation on the Irish government to say, ‘Oh, here you go, we’ll stand behind you and pay back those debts.’

Byrne: The mistake, and the commitment to repay, that mistake, as some now refer to it as, was made in 2008…

Storey: Yeah, but we shouldn’t be throwing good money after bad. Yknow, everybody has to put their hands up here and admit: ‘We made a mistake, and this is a mistake we can no longer afford to keep making.’

Joanna Tuffy: The idea in principle, is not a bad one, it’s helpful and it’s good, but I think this idea that none of us have any responsibility and if you do this there’ll be no pain…I think that’s an irresponsible message to send out. There were mistakes made, by political parties, by governments, by institutions and so on, and yknow, like, people voted for particular things in elections…and we need to change the way we approach that in this country and I think if you just say nobody has any responsibility, I don’t think that’s going to change the kind of approach we have…

Andy Storey: The question, Joanna, is should the Irish people assume full responsibility…

Tuffy: No, I agree with you, I accept that point…

Storey: You talked about the consequences, we have to think through certain assumptions about what will happen, but where we have to start is what’s happening now. And the assumption we have to make, the fair assumption we have to make at the moment, is that ordinary Irish citizenry, who are not responsible for the actions of Seán Fitzpatrick and Michael Fingleton, are bearing 100% of the responsibility. Now why are the people who are the most egregious offenders here not being pursued for any percentage of the responsibility?

Byrne: [A] point made by a number of people [is] that Greece got a 50% writedown through protest…

Storey: This is precisely the point. Unless people actually take action, unless the kind of organisation that we are trying to put together, that we have launched today, actually gets out and starts taking some action, it’s highly unlikely that the Government will be pressured into doing so. In a sense we’re offering the Government a trump card. We’re saying to them, ‘Look, the next time you go into negotiations on this say, hey, if it was up to me we’d pay it, but we’ve got this bunch of people from all walks of Irish civil society who are putting huge pressure on us to have some backbone here.’ {jathumbnailoff}

Andy Storey outlines why we need to stop payments RTE's Late Debate 18th Jan by Debt Justice Action

Image top: infomatique.