In response to the ECB/IMF junta, and the legalised smash-and-grab raid on the National Pension Reserve Fund, Equality think-tank TASC has issued its response:
This is not a good deal for Ireland and it is not a bailout for Ireland. It is a bailout for the European banking system by the Irish taxpayer. Responsibility for the crisis does not lie at the door of ordinary Irish people, but at the door of Irish and European policymakers, particularly the ECB, which created the conditions that have created the current problem.
Private institutions – both those in Ireland, and those lending to Irish financial institutions – fuelled the boom through their reckless lending and it is entirely appropriate that they take responsibility for the ramifications of their failed lending decisions.
The deal is inequitable, won’t work and will either lead to a sovereign default or will condemn the Irish people to a prolonged period of economic stagnation. It is in the interests of the Irish people that the deal be re-negotiated on more favourable terms, including a write-down of at least 50 per cent of the banking debt. This is crucial to economic recovery.
The burden of the current crisis is bigger than Ireland can manage and can only be solved at European level. There are currently proposals at the EU level for creditors on loans issued after 2013 to absorb some of the losses on severe bank debts. This is an acknowlegement that sovereign countries should not be responsible for the entirety of losses in the banking sector.
The solution to the current crisis has to involve the banking debts being spread between Ireland, the ECB and the European banks themselves. One option would be a debt for equity swap. This would mean that the creditors would take on the banking debts in exchange for ownership of the banks. An alternative solution would be for the ECB to take over the banking debts itself, with Ireland then recompensing the ECB for part of the total amount at a fixed value per annum over a long time period. A third option is to simply insist that the creditors (the bondholders) absorb a portion of the bank debts. This would be appropriate as the creditors themselves must take responsibility for their own reckless lending.
TASC is particularly concerned at the decision to include NPRF funds in the deal. By removing the possibility of using the NPRF to fund strategic investments, the agreement concluded between the Government and the IMF-EU effectively shuts the door to economic recovery in the next few years.
Read more (PDF file).