A few short months ago this blog was both shocked and saddened to read an American headline entitled, "The bank that brought down a nation". Prehaps that wasnt the exact wording, but it was a clear meaning. The Americans, and the rest of the world, were watching in amazement as the Irish government chose covering subordinated bond holders tied to their nations failed banks, over the welfare of its own citizens. The rest of the world were watching our government ignore convention in promising to make Irelands citizens pay for the banking crisis, which they clearly were not responsible for and could only pay for at the expense of their whole way of life.
The recapitalisation of our banks is expected to cost in the range of €45 billion to €50 billion. Over €30 billion is already wrote off to loss in Anglo and Irish Nationwide. Sinn Féin believes that there will be a minimal if not zero return on the funds committed to recapitalising the remaining institutions. The cost of NAMA is not included in these figures. In the worst case scenario, NAMA will cost the Irish taxpayer €40 billion, while the very best scenario still sees the Irish taxpayer €1 billion down.
Sinn Féin believes rather than standing up for the bank bondholders, our government needs to stand up for the Irish people and the future of our economy. If additional billions can always be found for the banks, money can be found for our recovery. The Fianna Fail/Green coalition has it backwards; banks follow the economy; they do not lead it: fix the economy and you fix the banks as well as fix the future.
Certain opposition parties who seem unable to come up with their own progressive economic proposals are spending their time attacking Sinn Féin over our original stance on the bank bail out two years ago. It is true that Sinn Féin supported the original motion, as the guarantee appeared to be a measure to stabilise the entire banking sector which was about to collapse and the party agreed to support it only with the provision of proper terms and conditions. Sinn Féin, along with the rest of the nation were misled on the facts, and when we learned that the terms and conditions provided were inadequate, we voted against it and have done so ever since.
Let no one blur the truth, Sinn Féin is one hundred percent against the bank bail out, and find the fact that the government has refused to reveal the identities of the bond holders to the Irish people, who are bankrolling their get out of jail free card, disgusting. Roman Abramovic recently outed himself as a bond holder and had the cheek to threaten to sue the Irish state if it defaulted on any part of his bond. The fact is, Abramovic invested in a high risk bond with the bank. As the caveat under every financial institution reads - Caution: the value of your investment can go down as well as up.
Sinn Féin believes that the Anglo bondholders must take the hit of their bad investment and the good deposits in the bank must be moved to the now nationalised AIB, which must become a state bank. The banking guarantee as it stands should be abolished immediately, leaving just a depositors guarantee in place.
Sinn Féin refuses to take part in the consensus pretending that the bank bail out and its effects are somehow separate from the rest of the economy, and have no impact on government finances. The bank bail out has heightened the effects of our recession, made recovery much more difficult and left us as a state on our knees before the EU and the IMF. Our international reputation is ruined and despite what Brian Cowen thinks, allowing Irelands citizens and infrastructure to decay in order to save bondsmen will not appeal us to multinational investment. You cannot separate the bank bail out and our government finances, the international markets certainly wont. In reality, the bank bail out places our true deficit in excess of 32%, a truly horrifying figure.
Remember this when the Minister for Finance slashes your social welfare, old age pension, disability payments or single mothers benefits on December the seventh. Remember this when your local hospital loses its A&E, when your local rail line is closed or when your kids cant afford to continue college due to rising fees. This budget has nothing to do deficit reduction. Every cent that is cut from frontline services, welfare benefits and general public spending next year will be redirected at least ten times into our governments bank bail out. You can stop them, but time is running out. It beyond time for the Irish people to pull the rug from under these people, once and for all.
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