Via Politics.ie (H/T Saoirsí). We are not making this up. Brendan “Brenny Hill” O’Connor, previously known for his religious attachment to ever “boomier” property bubbles (“The smart, ballsy guys are buying up property right now” – July 2007), has undergone something of a road-to-Damascus experience – We can’t pay this burden of bank debt, so let’s start talking default – Political parties need to address the issue of debt restructuring in this campaign, writes Brendan O’Connor:
THE elephant in the room is slowly coming into focus. Up to now, there had been a bizarre situation whereby most of the international community, from left to right — excluding those who work for the EU and the IMF — and a huge majority of the Irish people, knew the level of debt facing this country was not just immoral but also impossible.
Even our great god the markets believed it, the evidence being that they were increasingly pricing in a default of Irish sovereign debt. Our other great god, the EU, probably believed it too, but obviously it couldn’t say so. But our politicians, even in a general election, were unwilling to articulate this widely held belief…
We are told that if we don’t stand by our debts, then no one will lend to us any more and the markets won’t believe in us. This has already happened. We are told if we don’t pay off our bank debts then we won’t have a functioning economy and banking system. Already happened.
It was extraordinary that none of the major political parties made debt-restructuring the core of their election campaign. If we look after the billions, the millions will look after themselves. Essentially, the vast mountain of debt this country has, including banking debt, has gone from being the solution to all of our problems to being the cause of them. Our politicians had given no compelling argument to counter that of the collective wisdom of the international economic community, left and right, who overwhelmingly believe that we simply cannot function under our current debt situation…
… thank God for Sinn Fein and thank God for this election. Because it is slowly forcing our politicians to change their mindset and accept that maybe they need to put the interests of the people of this country ahead of being popular with their eurocrat friends…
… there are different ways to skin a cat. Goodbody’s stockbrokers pointed out during the week that there is €21.5bn in unsecured senior bank bonds still out there to be paid and that we should pay 50c in the euro on them.
Another option, they said, would be to allow the European Union’s rescue fund, the European Financial Stability Facility, to directly recapitalise Irish banks.
Goodbody’s pointed out, not unreasonably, that: “If the Irish banks are systemic to the European banking sector, then collective responsibility must be taken for sorting the problems. It is in Europe’s interests, as well as Ireland’s, that the problem is solved.”
Goodbody’s also made the point that defaulting on some bank debt could be the lesser of two evils because the longer bank debt remains the sole responsibility of the Irish government and people, the more chance we will be looking at a more radical widescale default on actual sovereign debt, which everyone seems to agree would not be ideal.
Good for you, Brenny, for being genuinely “ballsy”. Read more.