Wednesday, 2 November 2011
How to make a bond-holder happy
Maybe it's worked. Maybe electing Michael D Higgins has turned the south of Ireland's luck. Because today - and we all share in this rejoicing, north and south - the southern government has discovered an extra €3.6 billion it didn't know it had! Can you imagine how much money that is? No, neither can I but it's loads and loads. And loads.
You know how you feel when you find a pound coin or even a fiver down the back of the sofa - part of you is delighted, but another niggling part wants to know what the hell you were doing, stupid bloody eejit, letting your money slide out of your pocket like that, time to smarten up and look after your few shekels. That's what the south's government is feeling this morning. The government is naturally delighted but The Department of Finance is blaming the National Treasury Management Agency and the Central Statistics Office is lurking in the background trying to look innocent. The Minister for Finance, though, rises above all that. David Noonan says that "certainly a mistake took place, that to err is human". Well of course. Which of us - now come on, be honest - which of us hasn't mislaid the odd billion euro from time to time? I know I have.
And the odd thing is, this news about the billions down the sofa has come just the day before the south gets ready to pour €750 million into the Anglo-Irish bank. What's that - you thought the Anglo-Irish bank was dead, no longer functioning? Well it is really, but it's clearly going to get a good funeral. Mind you there are some hotheads and economic illiterates who say that this €750 million is to pay off senior bond-holders who invested in the bank with no guarantee attached, and that it's just like you or I might put money on a horse (or en election outcome) and find we'd backed the wrong nag. Except, of course, that the bond-holders will hold onto their money (that's why they're called bond-holders) whereas you or I could go and suck our thumb or kick the family cat, we made the bet and we bloody-well lost.
"But why?" you ask. Easy. The reason the tax-payers of the south are giving the bond-holders all that lovely lolly today is that Europe might think badly of Ireland if they didn't. Next you know you'd get a bad name. People on the international street would point you out and say "See that lot? When foreign investors buy bonds in one of their zombie banks, they haven't even the decency to take the lost money from their tax-payers' pockets and give it to the investors. A cheap, hopeless shower!" And the Irish in Europe would have to hang their heads and shuffle their feet. Our international reputation for being flaithiúil would be shot to pieces.
But the Irish government, God bless them, have made sure no such charge can be made. All day today they'll be shovelling the stuff into the zombie bank, until all €750 million has gone winging back into the pockets of the bond-holders. And I expect you know that next January, they'll be shovelling a bit over another billion euro in the same direction. For the same reasons.
Funny how things come together, isn't it? Ninety-one years ago yesterday, after torture, Kevin Barry was hanged in Mountjoy prison. His last words, according to the prison chaplain, were "Hold on and stick to the republic". I bet he'd be proud of the south's government today.