Deputy Sean Crowe has described Sinn Fein’s position of wanting to impose losses on senior bondholders following the banking collapse as the correct and legitimate approach in accordance with the evidence given to the Oireachtas Banking Inquiry.
The publication of the inquiry findings last week revealed that the National Treasury Management Agency (NTMA) told the Government in March 2011 the state could have saved more than €9 billion by imposing losses on senior debt holders at the six Irish banks.
At this time Sinn Fein were calling for the bond holders to be burned in direct opposition to the other three main parties Fine Gael, Labour and Fianna Fail who were against this line of action.
Deputy Crowe thinks the Government’s approach to the crisis was flawed and unjust.
“Inexplicably the Government in its wisdom, or in what many would describe as arrogance, ignored this important advice and decided to heap this private debt onto the shoulders of Irish taxpayers.
“The burn the bond holder’s position taken by the NTMA, mirrors what Sinn Féin, and a handful of others, were arguing for during that crucial time.
“We believed that those who created the crisis, including those who created the debt, should shoulder the burden of that financial loss.”
The failure to impose losses on senior bondholders to recoup some of the cost of the €64 billion bank bailout has been a source of political controversy since Fine Gael and Labour entered Government.
Instead of imposing “haircuts” as suggested by NTMA, Minister for Finance Michael Noonan drafted a plan for burden sharing of €3.7 billion worth of unsecured, unguaranteed senior debt connected with Anglo Irish Bank and Irish Nationwide (IBRC).
However, he pulled it at the last minute after the European Central Bank warned it would cut the billions in emergency liquidity assistance that had been advanced to Irish banks.
This was the second time that the ECB had blocked attempts by Ireland to burn senior bondholders but Deputy Crowe believes when push came to shove the Government took the side of the banks over its own people. He said.
“Government spokespersons smiled and peddled their lies on TV, radio and in the print media saying that it couldn’t be done, that it would destroy Irelands reputation, rubbishing the proposal, and calling us ‘economic illiterates’. It’s clear now who the economic illiterates were,” said Deputy Crowe.
“The Government and their elite advisors decided that the debt of a few wealthy individuals should be transferred and paid by the income of hard press Irish taxpayers.”
“The banking Inquiry may not have the delivered much in terms of agreement but at least some people will now realise that there were choices, and that the Government put the interests of the banks and speculators before the interests of ordinary tax paying workers.”