At last, we have a credible excuse for the delays by this Government in securing a debt deal which would ease the burden of our €70bn bank bailout debt. Yesterday, the group “Debt Justice Action” which operates under the banner of the “Anglo Not Our Debt” campaign, announced that it had made a formal application to the Guinness Book of World Records to have the Irish bank bailout debt recognized as the most expensive per capita, in the world, ever. Maybe the Government is refraining from making progress so as to support the bid.
Vicky Donnelly, Development Officer at the Debt Justice Action group, who filed the application, said:
“The application was submitted online, detailing how much Ireland has poured into the banks. We included supporting documents from the most recent IMF working paper, which recognises Ireland as having the, “costliest banking crisis in advanced economies since at least the Great Depression”. We expect to hear back from Guinness Book of Records within 4 – 6 weeks”
The group says that our €70bn bank bailout equates to 45% of Irish GDP and 55% of GNP.
The group is unlikely to have its application undermined by this Government’s attempt at negotiations which have now been ongoing for at least 16 months when Minister for Finance, Michael Noonan met with then-president of the ECB, Jean Claude Trichet in Poznan, Poland. The focus of current talks appears to be extending the period over which the bank debt will be repaid, which highlights a possible under-accounting in the application to the Guinness Book of World Records – the figures cited by the Debt Justice Action group exclude interest on the borrowings to plug the holes in our banks. At present the interest on the €31bn Anglo promissory notes is estimated at €16bn alone. Factor in the interest on the borrowings for the €33bn of cash injections into the banks and even accounting for some residual value and some payments of dividends and bank guarantee fees, and you are likely to be looking at the best part of €100bn.
And that excludes the potential for NAMA to make a loss of up to €15bn, an estimate provided to us by Minister for Social Protection Joan Burton, which she later unconvincingly retracted. And there is most definitely potential for the banks to come back with the begging bowl for further bailouts, especially considering the abysmal state of mortgage lending.
The group has produced a video to accompany its application, which you can watch here.