Taoiseach accepting German award for being a good European on same day €24m paid to Anglo bondholders

This year, An Taoiseach’s commonsense was questioned when he presented a “Certificate of Irishness” to US president Barack Obama on St Patrick’s Day or a few days afterwards, when Barack’s diary permitted. And Barack is 1/32 Irish. And of course Barack’s birthplace is a matter of some controversy in the US where birth outside the US is a disqualification for becoming president. And the Certificates of Irishness cost €40. And just 1,042 have been issued to date. And now, you can get these Certificates without even providing documentary evidence of your Irishness – a verbal assurance will do. Enda Kenny’s heart was probably in the right place, but has the man no sense of occasion, particularly on the international stage?

This evening, Enda is in Berlin where he is due to be presented with the annual “Golden Victoria European of the Year” award for 2012 presented by a German media association. When announcing the award the Verband Deutscher Zeitschriftenverleger said

“This award acknowledges the achievements not only of Enda Kenny but Ireland and the Irish people. Ireland’s determined response to the current economic and financial crisis has been widely respected, particularly in view of the genuine hardship being experienced by many Irish people.

This award, however, also acknowledges the unique contribution which Ireland has made to the European project since its accession in 1973. Despite being located at the Western edge of continent, the green island has always been at the heart of Europe”

Today is coincidentally the day when the former Anglo Irish Bank, now merged into IBRC, pays €23,580,000* to unsecured unguaranteed senior bondholders. “Unsecured” means the bondholders have no specific claim over the assets of Anglo. “Unguaranteed” means the bonds are not covered by the ill-fated blanket guarantee given in September 2008. Anglo has so far cost this society €29.3bn though the questionable recent claim by the IBRC management is that it will ultimately “only” cost €25bn. In December 2010, on the eve of the last general election and after the Greens had signalled their withdrawal of support from their coalition with Fianna Fail, RTE reported “Mr Kenny said there is no question of defaulting on sovereign debt or on senior bank bonds that are covered by the Guarantee but he believes that the taxpayer can save between €12-17bn by negotiating a sharing of losses with the unguaranteed senior bondholders” Enda never subsequently disabused us of the expectation of these savings during the election campaign.

And once in office, aside for a solo-run by Minister for Finance Michael Noonan on a trip to the US in the summer of 2011, this Government has shown its mettle in not just abandoning the promise of its election campaign but it has tested our patience with the farcical claim that Anglo pays these bonds out of its own resources! Since March 2011, nearly €4bn has been paid to senior unsecured unguaranteed bondholders at IBRC. The beneficiaries of the bond payments have never been comprehensively identified but it is believed that German and French banks feature heavily amongst their number.

So this evening, as Enda accepts his gong, I hope he will pause to contemplate the €23.6m bill picked up by this society today, a sum believed to have been remitted to bondholders, including German bondholders who lent heavily to this country during the early/mid-2000s. It is one heck of a price to pay. And as with the episode of the Certificate of Irishness presentation to President Obama, it’s likely Enda just won’t get the inappropriateness of his actions.

*The Bloomberg ID for the bond is COEG3377082. It was issued on 8th November 2007 and is for 600,000,000 Czech Republic Koruna which today equates to €23,580,000 at CZK 1 = EUR 0.0393.

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