March 16th, 2012 – Washington, DC
On Friday afternoon, two leprechauns fought over a pot of gold outside the Irish Embassy in Washington, D.C. The first leprechaun, named Anglo-Irish Bank, frowned as she lost the battle for the gold, and the other, the European Central Bank, gleefully counted his winnings. The pot of gold, however, belonged to neither, but was pilfered from the Irish citizens. Around the leprechauns, a crowd, holding signs supporting Irish debt relief efforts and jeering at the thieving leprechauns, had gathered to deliver a letter signed by faith and civil society organizations to the Embassy. The letter urged the Irish government to end an unjust repayment plan that diverts taxpayers’ money away from those who need it- the citizens of Ireland.
Jubilee USA Network, who hosted the action, was calling attention to the “Anglo: Not Our Debt Campaign” started by Irish debt groups earlier this year. Anglo-Irish Bank (Anglo) financed some of Ireland’s largest development projects, from golf courses to shopping malls, lending recklessly and helping to create the economic downturn Ireland is experiencing. Rather than allowing Anglo to fail, the Irish government guaranteed that debts owed by Anglo to its creditors would be repaid in full, but by 2010, it was clear that Anglo was unable to continue. If Anglo failed, all of the bank’s debt would fall back onto the Irish State.
The government negotiated a deal with the Central Bank of Ireland, and subsequently, the European Central Bank (ECB), in which Anglo received funding to repay its loans. As Anglo lacked sufficient collateral for the ECB to lend to it, the Irish government created a “promissory note,” an unconditional promise by the Government to pay Anglo a sum of money to cover the liability.
Anglo failed, it’s a dead bank, and now the Irish people are being forced to pay off loans incurred by Anglo’s reckless lending and the Government’s promissory note. If Ireland continues making repayments, the Irish will have paid $61.7 billion to the ECB by 2031- or 30% of Ireland’s GDP. The Government is scheduled to make a promissory note payment of $4.1 billion to the ECB on March 31, 2012. While $4.1 Billion could pay for funding the nation’s entire primary school system for a full year, it will instead be paid into the Central Bank, be deducted from its liabilities and, effectively, be destroyed.
“This isn’t rocket science - payments for a dead reckless bank, that was part of creating this financial crisis, should be stopped immediately. On St. Patrick’s Day, the Irish Government should commit to ensuring that this money should go to help the Irish people, ” said Eric LeCompte, Executive Director of Jubilee USA Network.
The Irish government has the option of immediately stopping payments and entering into negotiations with the ECB to ensure that the debt is written down and the money can be invested in the welfare of the Irish people.
Nessa Ní Chasaide of Jubilee Ireland and The Debt and Development Coalition Ireland noted, “People in Ireland are now living through the same mistakes that were imposed on people who have been living through debt crises for generations in Africa, Asia and Latin America. It's time for a line to be drawn under reckless lending and borrowing. Writing down the illegitimate Anglo debt would be a very good place to start.”
Over the last 12 years - along with Jubilee partners in 50 countries - Jubilee USA Network has won over $100 billion in debt relief and financial reforms to benefit the world’s poorest. Developing nations have long struggled with large sovereign debts that divert needed funds from social services to repayment. As countries in the North now witness the global debt crisis spreading into their own economies, international financial institutions and banks have continued to respond with outdated and failed policies, and the people continue to shoulder the burden.
Faith in Public Life article: http://www.faithinpubliclife.org/blog/leprechauns-descend-on-irish-embassy-calling-for-debt-relief/
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