Jan 152015
 

Forty billion euros.

Forty thousand million euros.

That’s how much it might cost us to bail out the gamblers who made bets on the two failed banks, Anglo and Irish Nationwide,  combined with the potential losses in AIB, full of swaggering puffed-up fools into which the government pumped €20 billion.

The good news is that they’ll probably get back something from AIB since it’s still trading.   They might even get back the entire amount, though Professor Patrick Honohan, current governor of the Central Bank, doesn’t seem too sanguine on the subject.

In his evidence to the Dáil banking inquiry, Honohan suggested that Michael Noonan was hoping for improved share prices  rather than basing his predictions on the current reality, or as we sometimes call this sort of behaviour, being a politician.

The truth is that, as matters stand, Ireland is exposed to a cost of €40 billion as a result of propping up two failed banks and one basket case, and this is real money we’ll have to pay.  This is a burden more crushing per capita than the German reparations from both world wars, even though we invaded nobody, bombed nobody and murdered nobody.

And all because the German-dominated European Central Bank wouldn’t let us liquidate Anglo Irish Bank and Irish Nationwide.

Why?  Who knows?  Some form of fiscal orthodoxy perhaps that prevents governments from pointing fingers at idiots.

What idiots?

Simple.  The idiots who ran those banks, including idiots like David Drumm, the thoroughly unbelievable, lying, fraudulent spiv at the controls of Anglo, if the US judge’s assessment of him is to be believed, and Fingleton, a puffed-up fool who walked away with a cool million and a gold watch after his ridiculous building society folded.  Not to mention those idiots who ran AIB into the ground.   The same people who cornered Lenihan and Cowen in the middle of the night and bullied them into extending a general guarantee to every bank in the country, even though there was no good reason to do so.

According to Honohan, Brian Lenihan didn’t want to guarantee Anglo or Irish Nationwide, perhaps recognising firstly that they were both completely sunk, thanks to mismanagement, but also that letting them go would have no lasting impact on the country, since neither bank was integral to the economy.

Honohan claims that Lenihan was overruled by a senior political figure during the famous incorporeal cabinet meeting, attended by three men and a host of snoring fools, so that’s got to narrow it down.  There was Lenihan, the attorney general and there was Biffo, without a pint in his hand, and not singing, but still not at his sharpest by the look of things.

Who overruled Lenihan’s advice?  I don’t know.   Perhaps it was the ghost of Charlie Haughey.  Perhaps it was, but we need to be told. When forty billion euros are at stake, when the entire country’s destiny is on the line, do you really want a pub-singing Offaly solicitor making the final call?

Who made the decision to saddle Ireland with a debt of €28 billion from Anglo and another €36 billion from other sources, for no obvious reason?  And why?

This is something we need to be told.

These people need to take responsibility for what they have condemned Ireland to endure for generations to come.

And if they won’t take responsibility, they need to be held to account whether they like it or not.

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Here’s an estimate when we thought the cost was only €25 billion.

  3 Responses to “Bank Guarantee Could End Up Costing €40 Billion, Says Central Bank Governor”

Comments (3)
  1.  

    The performance of Prof Honohan before the Bank Inquiry was a breath of fresh air compared to that of the stoney faced tongue tied civil servants who usually appear in such forums.

  2.  

    What about Euro bank contagion? And finance markets not lending to us? If we liquidated Anglo did we still need to have paid the bondholders? Or are they two separate things? I’m confused by Honahan’s answers.

  3.  

    What do you understand by the term “contagion”?

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