The ECB has lent the Irish Banks some €150 billion. If the Irish banks all closed tomorrow morning, the ECB would not get its €150 billion back because that money is now in the system in Ireland. The ECB knows that Ireland’s banks have not got the money to pay it this vast sum. From the ECB’s point of view its best plan to recover the money it advanced to cover the reckless lending of the banks is to shift the burden of repayment on to the Irish taxpayers. Therefore the political and media suggestion that the ECB will close down the ATM machines so there will be no money in the system, is so much scaremongering to intimidate the public into agreeing to take on these debts it is not responsible for. The central issue at present is that the ECB wants the Irish State and taxpayers to take on the burden of paying this €150 billion back to the ECB as rapidly as possible, so that instead of the Irish Banks owing the ECB this vast sum of money, the Irish State/taxpayers will do so and will pay it back over years by flogging off the Banks themselves to foreign owners, selling off the NAMA loans at knockdown prices, privatizing State assets systematically and screwing Irish taxpayers for this purpose.
This is essentially what the EU/IMF Memorandum of Understanding commits the Irish Government to doing. The Irish public needs to be warned that what its political leaders are planning is a massive fire-sale to foreigners of the recapitalized Irish Banks and State assets generally – the NAMA loans, Coillte, An Post, the ESB, Bord Gais etc. and Ireland’s natural resources, so that we can pay back the money the ECB is putting in the Irish Banks, essentially in order to ensure that private banks in Germany, France and Britain do not suffer losses on their Irish operations. Until this fire-sale is completed, the ECB depends on us and we can in effect hold it to ransom. Hence the new Irish Government should be in no hurry to comply with the ECB’s wishes. It should act in accordance with the old truism: If you owe the Bank a million you are in trouble, but if you owe it a hundred million it is the Bank that is in trouble! The ECB stood irresponsibly by while the German, French and British banks punted huge sums on the Irish property market for years and made big profits thereby. As the Eurozone’s lender of last resort the ECB should now pick up the tab. The Irish State needs to repudiate the horrendous private Bank debts that it has so foolishly guaranteed, if it is to be able to repay its legitimate sovereign debts and return to the international bond markets at an early date in order to borrow at reasonable interest rates.