The Emergency Liquidation Of The IRBC By Annette J Dunlea
Published In the Carrigdhoun Newspaper16th Feb 2013 p.18
The emergency legislation needed to disband the former Anglo bank, IRBC, was passed by both houses of the Irish parliament after hours of debate in the early hours of Thursday morning.Michael D. Higgins made returned from an official visit to Italy to sign the legislation into law. Anglo is the Bank that Broke Ireland.There were fears that entities holding Anglo debts would file suit to stop the bankruptcy if the bank was not closed down overnight.The Irish government was forced to rush through the legislation after news of the proposal was leaked by the Bloomberg agency and by Reuters.NAMA said it had been directed to establish National Resolution Ltd, to acquire a floating charge over some IBRC assets.The total Irish sovereign debt to the EU stands at about €200 billion.He said “Step-by-step, this Government is undoing the disastrous banking policies that brought this state to the brink of national bankruptcy”.“The agreement has reduced Ireland’s vulnerability from the huge debts taken on by Irish taxpayers as a result of the cost of rescuing failed private banks.”The Government did not ask for a write-down on the Anglo debt during negotiations with the European Central Bank.“We always said that we were not looking for any write downs. Anybody who knows the European situation knows that the ECB does not do write downs,” Minister for Finance Michael Noonan said.Mr Kenny said the liquidation of the IBRC had caused the Central Bank to assume full ownership of the €25 billion in promissory notes and other collateral held as security for the funds provided by the Central Bank to the IBRC.
As a result, tax increases and spending cuts will be 1 billion lower this year and in future years than expected.Under the deal the Anglo Irish debt will be replaced with long-term bonds with far longer repayment schedules.The new deal makes it a bit more affordable and pushes back the pain enough so that we can at least hope that with a bit of luck and a bit of inflation and economic growth the debt will seem less significant than it was last week.Enda Kenny has described the deal on the promissory note as a good day for the country and its people.He said that the deal means the end of IBRC, the promissory note and that the country will not have to repay €3 billion a year or to borrow €20 billion over the next ten years.Mr Kenny said he planned to “explain to leaders when it is appropriate” the nature of the agreement and the arrangement arrived at for Ireland, which was “very much in the Irish people’s interests”.He said the promissory note deal was “recognition of where there clearly is evidence of a government and a people working together in taking on challenging positions, that that challenge can be rewarded by co-operation and assistance from our European partners.”He said that other restructuring regarding legacy bank debt was “a different argument for a different day.” Under the agreement reached today with the ECB, the promissory notes are being exchanged for long-term Irish Government bonds with maturities of up to 40 years. The first principal payment will not now be made until 2038 and the last payment will be made in 2053.Dublin headquarters of the Anglo Irish Bank Corp., which has been called the world’s worst bank, may be converted into a coffee shop.The Anglo Irish headquarters has been a site for angry demonstrations during which people protested irresponsible lenders and the €30 million government bailout. The headquarters became a symbol for Ireland’s recent financial crisis that helped lead to a controversial €67.5 billion international bailout for Ireland.
EU Commissioner Olli Rehn said today that the major steps taken by the Government regarding the Anglo Irish Bank promissory notes should further boost confidence in the country as it remains on track to exit from the EU-IMF programme as planned.Sinn Féin's Pearse Doherty said the Government is telling people that they will have to pay back every penny of the toxic Anglo Irish Bank debt.He said children not born at the time of the bank guarantee will have to pay the debt.The Government has not only pledged to pay back €28 billion in debt but also a further €1 billlion in interest every year, he said.He said the bank debt has been turned into a €64 billion Sovereign Bond, thus doubling the cost of bailing out the bank.Independent TD Mattie McGrath said that as a small business man he knows this is not a deal and sadly the Government has not delivered.No bondholder has been burned, he said, describing it as unbelievable that they are still laughing all the way to the bank.IBRC bondholders to get €750 million from €1 billion liquidation costs.The liquidator, Kieran Wallace, is embarking on a a speedy liquidation process in conjunction with KPMG.The liquidation automatically ended the employment of all direct employees of the bank.Broderick said more than 800 of IBRC's 870 staff in the Republic of Ireland had been offered new contracts on Thursday.
Causes Annette Dunlea Supports
The National Council of The Blind, Ireland