From Socialist Voice, June 2011

Debt crisis significantly worse than the state reported!

Up to two months ago the state reported Irish “sovereign” debt as being about €100 billion, and climbing (according to the NTMA web site). However, in April the reported sovereign debt leapt from €102 billion to €148.1 billion, almost overnight!
     The state reported its national debt as our sovereign debt; however, this excluded €30.9 billion in promissory notes to Irish Nationwide, EBS and Anglo-Irish Bank and also excluded the debt of local government bodies. This was a glaring omission that the EU was quick to pick up on.
     Ireland now must report the state’s “general government debt,” which includes all these factors. This now stands at about €150 billion and is likely to be close to €180 billion by the end of year. (For all the followers of the debt counter on, the site is now being relaunched, with a new counter reflecting these changes.)
     However, even this new calculation imposed by the EU does not include bonds of more than €30 billion issued by NAMA, which again is potential sovereign debt, because of state policy. And of course in addition to all this is the €120 billion in ECB loans to the guaranteed banks, which is also potential sovereign debt.
     So the Irish debt crisis is far worse than is reported by the state or by the EU. The state this year is likely to run a deficit of close to €20 billion, with about €14 billion of that being interest paid on our existing debt.
     This significant jump in the state’s debt is a massive indictment of its policy of protecting and securing the loans of big Continental banks to the Irish banking system. It is further evidence that the debt crisis we are suffering is a result of Ireland’s peripheral position within the European Union and our subjugation to the core EU countries.
     It is also evidence that this crisis is not going anywhere, and that Ireland lacks the sovereign tools with which to build a recovery. Just ask the Minister for Finance, Michael Noonan, who holds most of his own personal investment in German government debt!
     The debt is not only unpayable but is self-perpetuating, as the state must take on more debt to pay its existing creditors. It is a vicious cycle of debt. Even the Fine Gael minister Leo Varadkar acknowledged this recently when he suggested that a second EU-IMF debt imposition, with even more draconian conditions, would be required to meet our existing debt problem.
     All progressive people must contribute to building the Repudiate the Debt Campaign as a political statement of the people’s refusal to accept the socialised banking debt as our national sovereign debt.
     If we must make sacrifices and take some pain, let it be for an Ireland free of outside control, an Ireland free of imposed conditions, a sovereign, democratic Ireland.

Home page  >  Publications  >  Socialist Voice  >  June 2011  >  Debt crisis significantly worse than the state reported!
Baile  >  Foilseacháin  >  Socialist Voice  >  Meitheamh 2011  >  Debt crisis significantly worse than the state reported!