To my great surprise the Irish Times has published my long letter on the Irish bailout in full:
Madam, – I am currently in southern Africa where there is some incredulity at the current state of Irish affairs. Having been told for so long that export competitiveness is the key to economic salvation people here wonder how a country where exports continue to at twice the level of imports can be in such trouble.
This incredulity is reinforced when I tell them the real Irish economy is growing despite the best efforts of the Government to close it down and that the debt to GDP ratio was as low as 25 per cent as recently as 2007. How can Ireland now be on the brink of bankruptcy and close to having its sovereignty removed by EU/ECB/IMF diktat? I tell them it is because the Government has stolen circa €70 billion of the public’s money (almost 50 per cent of Ireland’s GNP!) and given it to foreign investors in bankrupt banks.
When they ask what these bank investors have done to deserve such largesse, I tell them that they fuelled an unsustainable property bubble which made it almost impossible for our young people to join even the bottom rung of the property ladder and which threatened to make the whole Irish economy uncompetitive.
“Surely”, they wonder, “investors in such banks do not deserve to be rewarded for such irresponsible and destructive behaviour particularly when it is their victims who must now pay the price – home owners in negative equity, the sick seeking health care, the aged and those made unemployed seeking social welfare? Did many of those those now unemployed not lose their jobs because of the irresponsible behaviour of the banks and their investors in the first place?”
At this point, I admit to being stuck for an answer. Perhaps your readers can help me out and explain why it is that the victims of this crime must pay the perpetrators with money they don’t have and must now borrow from many of these same “investors” at increasingly ruinous interest rates and why the Government is actively colluding in this process?
Would the proper process not have been what is known in business as a “debt equity swap” and which would have made those foreign investors shareholders in the banks they had so seriously misled in the first place?
Sorting out the banks would then, very properly, have been their problem and Irish citizens, who had no hand, act or part in the running of those banks could have looked elsewhere within the EU for their banking services if they so desired or required? Why do bank profits belong to their investors and bank losses to the public?
The Irish Constitution (Article 40.3.2) guarantees the right to property and Article 43 acknowledges that these rights ought to be regulated by the principles of social justice and the common good. By what principle of social justice are those with no ownership of the banks made liable for the losses of those who do? Has the Government not acted unconstitutionally in this case? – Yours, etc,
FRANK SCHNITTGER,
