wheelsofire

Ora, Basta!

In Democracy, Europe, Irish Politics, neo-liberal economics, society on August 20, 2009 at 11:13 pm

The mothers of the financial disaster we people find ourselves in, the good old Banks (Trust us with your money!) have suddenly woken up to the realities of life, just as they are forcing the unwashed to do, the small and viable businesses being refused short-term loans, and those whose overpriced houses are being repossessed.

The prospect of having to sell off all those orphan unsold dog boxes on the open market in a liquidation has filled the bankers with terror; clearly such a sell-off would be at fire-sale prices, and bring the price of property down to where the market value would truly obtain. It would also mean that that the banks would face massive write downs on their loan books.

This they do not like one little bit. They, and their friends in the Golden Circle and the lick-arse acolytes in the media and politics, well, they would much rather the taxpayer should pay for their losses.

Remember, the Glorious Leaders who got us here now plan the banks debts should be bought by NAMA, the proposed National Asset Management Agency, being set up to dump their debt on us, at inflated prices, with the slim possibility of us seeing a return within 20 or 30 years. Just like the AIB disaster in 1985 when it got bigger than its boots, and bought a business it did not understand. The Insurance Corporation of Ireland cost all PAYE taxpayers in Ireland which was only recently stopped, after more than 20 years. This is what Wikipedia has to say:

The Can of Worms at ICI was the headline in Business & Finance magazine on 8 November 1984.[3] Insurance Corporation of Ireland (ICI) was a wholly owned subsidiary of AIB when it collapsed in 1985 with losses of over £200 million that had arisen due to severe under-reserving and poor underwriting performance, particularly in its London office. Reinsurance business accounted for nearly half the company’s income. ICI management were at fault for failing to closely monitor the activities of its London office, to find out what business was being written, whether adequate reserves were being maintained and to monitor the true profitability of the business. When it was discovered in November 1984 that ICI was operating below the statutory reserve ratio, a request for further capital was made to AIB – ICI had returned a profit of £80 million the previous year.

This collapse occurred at a time of deep economic recession in Ireland. The level of Government debt at that time was 116% of GDP. But the Irish taxpayer bailed ICI out of its difficulties. The Irish Government did so to ensure a continuation of the insurance business and to protect policyholders. AIB claimed that it could not resolve the problems of ICI without putting its core banking business in jeopardy. The investment of £85 million by AIB in ICI was written off and the cost to the Irish taxpayer was £400 million[4].’
The article goes on to remind us the involvement in the tax fraud of the bogus overseas accounts, the deal helping Haughey once he became Taoiseach, the Rusniak losses of $700,000,000, the overcharging issues,and so much more. (Want to guess how many senior heads rolled? Count them on the fingers of your foot.)

Fair play to ACC for sticking to their guns. It is not really that surprising really. Being owned by Rabobank, which is Dutch and so unable to join the NAMA scam, they want their pound of flesh. And they are prepared to bring the whole rotten house of cards down. They are owed €126 million, but Mr Carroll owes more than €1 Billion to Irish banks.
Rabobank directors did not go to school or college with that other happy bunch of the Irish senior elite. They didn’t play rugby for Mary’s, or Blackrock or any of the schools which produce the same self-perpetuating elite.
They are following the logic of the market. Oversupply leads to price reductions, and we are well  oversupplied with unsold apartments.

But the elite who run this country,those who are happy telling us we must slash and burn our social services, the arts,education and healthcare, those who  have spent so much time lecturing us on ‘how the market determines true value’ have suddenly decided that the same inexorable laws should not apply to them.

Instead they attempt to blackmail us yet again. The Italians have an expression for times like this: Ora, basta! It doesn’t carry the same weight in English but translates roughly as an angry, ‘OK,that’s enough!

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  1. Excellent resume of all that is wrong with this sick little country of ours.

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