Last Thursday 31st March, 2011 can’t have been a pleasant day for our new Minister for Finance, Michael Noonan. With the weight of the commitments contained in the Programme for Government, it cannot have been easy to tell the Dail late last Thursday afternoon that the State would need inject a further €24bn into the banks, that there would be no burning of senior bondholders and perhaps most disappointingly, he wasn’t even able to offer us the consolation that the ECB was at least committing to the medium-term funding of our beleaguered banks. Perhaps he might have taken some comfort from the fact that the mess that he is confronting is not of his making, but regardless it was a speech no Irish finance minister would have wanted to make. Fast-forward two hours to when the newly-created Economic Management Council gave a news conference, the first five minutes of which are available here. During the news conference, Minister Noonan stated that in February, 2011 former Minister Lenihan put €7bn into the banks and slightly smirked as he observed to the media that “ye didn’t pick that up”.
I would like to bring you the transcript of precisely what Minister Noonan said but the 45-minute press conference which was shown in full on RTE Online doesn’t appear to be available, certainly not from RTE’s website or the government information service merrionstreet.ie but the €7bn was alluded to again today during RTE’s This Week radio programme when Tanaiste and one of the four members of the Economic Management Council, Eamon Gilmore again mentioned it in passing.
You will recall that in February, 2011 we were supposed to have injected €10bn into the banks as part of the EU/IMF bailout but that Minister Lenihan decided on 9th February, 2011 that he didn’t have a mandate, the general election having been called on 1st February2011. He invited the finance spokespeople for Fine Gael and Labour to write to him if they disagreed with his position, which neither did. So you might have thought therefore that no money was put into the banks in February, 2011? Not so, it seems according to Minister Noonan and Tanaiste Gilmore – €7bn was put in.
And where did the Department of Finance magic this €7bn from? In what must make the financial accountability of our government a travesty, we don’t know. If you consult the Exchequer Statement for the month of February, 2011 there is no mention of it there. There was obviously no press release at the time. So how did the banks get €7bn? My guess is that it comes from NTMA reserves or from National Pension Reserve Fund liquidations of position but neither has made any statement on the matter. But it might also come from the Central Bank of Ireland who doggedly refuse to disclose information on the €70bn Emergency Liquidity Assistance programme.
What significance does this €7bn have? Arguably none because we now seem resigned to injecting a €24bn into the banks, of which this €7bn is part. The significance I draw from it is that there is no presumption of accountability on behalf of government. A Minister can claim on one hand that he doesn’t have the mandate to inject €7bn+ into the banks but on the other can engineer €7bn of deposits. And when Minister Noonan said, “ye didn’t pick up on that”, how was the media supposed to have picked up on that when neither the national accounts, the Exchequer Statement nor other state agencies including the NTMA and Department of Finance didn’t make any statement on the matter.
NAMA Wine Lake 
spot on as ever Namawinelake, what would we do without you!
ffffffffuuuuuuuuuuuuuuuuuu…………
christ almighty, all it takes is a few nights on Kildare Street with pots and pans and we’ll have a much more accountable Dáil.
Agreed
agreed, but we tried this already and only a small aoount of people turned out
We are being treated with utter contempt by our government for the want of a better word… “ye didn’t pick up on that”. No, we did not because we thought weasel words spoken by our finance minister might actually mean something having learned something from his previous utterances which were exposed as lies and spin dressed up as a plan. What we have picked up on though is that FG and Labour in office have already seamlessly morphed into the FF way of doing business.
Willie O’Dea tells us, when it suits his purpose, that ministers were rung, to be informed, ‘this is what has to happen’ in other words, there was no cabinet responsibility because the guarantee was presented as a fait accompli to be rubber stamped by the houses of the Oireachtas in due course. In the same vane Brian Lenihan now informs us that he would never have told us that this “was one of the cheapest bailout in the world” but what he actually said was that it was one of the cheapest bailouts in the world “SO FAR” fooled ye again!
@Robert, I’m bewildered at the front page revelation about Willie O’Dea today – the Independent was reporting at least two months ago that the Cabinet was presented with a fait accompli on the 29/30th September
“That panicked decision, made by two nervous and ill-informed ministers, Brian Lenihan and Taoiseach Brian Cowen, was in turn delivered as a fait accompli to the rest of the Cabinet late into the night. It led to the downfall of this country. ” http://www.independent.ie/national-news/remember-how-ireland-was-ruined-by-bankers-2538092.html
And I’m pretty sure Shane Ross has also given a pretty detailed account of the Cabinet “consultation” that night. So it’s not clear why this is news now.
“John Gormley lets slip: The Bank Guarantee was decided before the all-nighter.”
Either O’Dea or Gormley is LYING.
They can’t both be right.
.
@ namawinelake
Willie, lectured me in law in 1981 at the N.I.H.E Limerick and it is a pity that instead of delivering the promise that he offered, at that point in time, that he morphed into the media face of FF who could be marched out to defend the indefensible at a moments notice.
I would not agree with Constantin Gurdgiev’s assesment of O’Dea, he may be one of the more numerate of the FF’s but only quotes the statistical analysis that suits him, when it suits him very much in the same vane as Mr. Lenihan.
Some reports (lazily I guess) say that the 7bn was also from the NPRF.
Possiblities:
1) 12.5bn and 5bn from Exchequer cash balances (as what orginally envisaged in the EU/IMF Deal)
2) We borrowed 7bn from the EFSF/EFSM/IMF or a combination in preperation for the Feb deadline.
Oh, one thing I forgot.
The new debt projections show an extra 8% GDP increase in General Government debt
8% of 154bn = 12bn
Which would have given you the impression we have had to borrow 12bn from somewhere to fund the bailouts.
However, since there is definitely 10bn coming from the NPRF, 1bn from the sale of Irish Life and up to 5bn from subordinate bondholders this gives us 16bn. implying we would only be borrowing 8bn.
Ah riddles.