Smash the NAMA Republic!
Private Bank Bailout
On September 29th 2008 the Dublin government announced, in a surprise move, that it intended to underwrite the entire Irish private banking sector. In parallel to agreeing to bailout the private banks the Dublin government launched a public relations offensive which assured the public that the ‘fundamentals’ of the Irish banks were still sound; that the issue was simply one of ‘liquidity’ and that while the bank guarantee had a potential liability of more than €400billion euro, the Dublin government did not expect a cent of taxpayers’ money to be drawn down. Brian Lenihan, the Twenty-Six County Minister for Finance, went so far as to say that is was, ‘“the cheapest bailout in the world so far”.
Within weeks it was apparent that the ‘fundamentals’ of Ireland’s private banks were far from sound. In a decade long orgy of greed and avarice a handful of private banks had fuelled a property boom without equal in Irish or European history. And now the chickens were coming home to roost. At first it appeared that the problems were largely limited to Anglo Irish Bank, but as the months slipped by it became apparent that virtually all of the main lending institutions were basically bankrupt – Anglo Irish Bank, Allied Irish Bank, Bank of Ireland, Irish Nationwide and the Educational Building Society – all financial Titanics, all holed below the water line. The only difference between them? The speed at which they were sinking.
Sixteen months after the bank guarantee scheme was launched the Dublin government bowed to the inevitable and privatised Anglo Irish Bank in January 2009. In March 2010 Irish Nationwide followed suit when the Dublin government took a ‘special investment share’ – nationalisation by any other name. In May 2010 the government took a majority shareholding in EBS, the largest building society in the state. By the second anniversary of the launch of the bank guarantee scheme, in September 2010, Allied Irish Bank, the largest bank in the state, was ninety percent owned by the Dublin government – de facto nationalisation. In addition to the nationalisation of these four financial institutions the state also pumped billions of Euros into Bank of Ireland.
In Brian Lenihan’s emergency budget of April 2009 he announced the creation of a new statutory body, the National Assets Management Agency, to act as dumping ground for the Celtic Tiger-era ‘impaired’ loans’ of the private banks. In other words, all of the loans that property developers were now unable to repay were to be bought from the private banks by the taxpayer.
With the creation of NAMA the Dublin government effectively nationalised the loss making debts of the banks, whilst simultaneously pumping endless billions of Euros into the self same banks to prevent them from going under. In November of 2009 NAMA was given legislative effect. Thus with the stroke of a pen the NAMA Republic was born.
Total Cost of Bank Bailout & NAMA
Nobody knows what the total combined cost of the bank bailout and NAMA will ultimately be. In September 2010 the Central Bank estimated that the bank bailout would cost a total of €50billion, a figure which some analysts believe will rise to closer to €70billion. It should be noted that this figure was arrived at before the tsunami of defaulting domestic mortgages hits - an inevitability following the collapse of the property market and a period of prolonged mass unemployment.
Estimates for the final cost of NAMA are even more difficult to estimate as the long term values for the assets now owned by NAMA are impossible to calculate. What is known is that NAMA will pay an estimated €40billion to purchase the ‘impaired’ loans of the private banks, from which an unknown amount of money will be recouped through repayments and the sell-off of assets.
The combined total cost of the bank bailout and NAMA may, therefore, in the short-term, exceed a staggering €110billion. While some monies may well be recouped from the eventual sale of NAMA assets, this reduction will have to be offset against the interest that will have to be paid on the vast borrowings that have been undertaken to fund both NAMA and the bailout. To put that figure in context, it is roughly three times the entire annual budget of the Dublin government in 2010.
The Twenty-Six Counties – A Failed State
While there has been much media debate about the final financial cost of the bank bailout and NAMA there has been much less focus on the social cost of the economic depression. This flawed prioritisation, which places Euros and Cents ahead of the interests of the people at large, sits in perfect harmony with the greasy till politics that have plagued the Twenty-Six Counties since the foundation of the state.
For ninety years the entire infrastructure of the Twenty-Six County state has been used to protect and promote the interests of powerful special interest groups. At various times the political class, the Catholic Church, large farmers, property developers, landlords, bankers and multinational corporations, amongst others, have had undue influence on the social, economic and political development of not only the Twenty Six Counties, but the entire Irish nation.
At no point have the interests of the bulk of the people been placed ahead of the interests of these various special interest groups. From the oppression of the Cumman Na nGaedhael government of the 1930’s, to the Catholic Church dominated reign of De Velera, to the corruption of the Charles J Haughey era, through to the economic disaster of today , not once have the workers who create the wealth of this country been in control of their individual and collective destinies. The NAMA Republic is just the latest cruel parody of the Republic envisioned by Connolly and Pearse and the other leaders of the 1916 Rising.
A Thirty-Two County Democratic Socialist Republic
The political establishment, the corporate media and the business class would have you believe that the solution to the current economic depression lies in higher taxes on low paid workers and cutbacks to public services. They would also have you believe that the only choice now left is the choice between the bailout funds of the International Monetary Fund and the European Union.
But we, the people of Ireland, have another choice. We can choose to put the interests of the bulk of the people ahead of the special interests groups. We can choose to put in place a true Irish democracy – economic as well as political, where the wealth, and wealth producing resources of the country, are placed under the control of all of the people, to be used for all of our benefits. In short we can take asunder the NAMA Republic and reclaim our country through the creation of a Thirty-Two County Democratic Socialist Republic.
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