Anglo losses mount up… Let the speculators take their losses!

Who do you think was the biggest loss making financial institution in the world last year? Lehman Brothers? AIG? Citibank? No, it was not a major bank in a major world economy – it was a relatively small developers’ bank in Ireland – Anglo Irish Bank. What’s more, Anglo Irish Bank is likely to be the biggest loss maker again this year!

Who do you think was the biggest loss making financial institution in the world last year? Lehman Brothers? AIG? Citibank? No, it was not a major bank in a major world economy – it was a relatively small developers’ bank in Ireland – Anglo Irish Bank. What’s more, Anglo Irish Bank is likely to be the biggest loss maker again this year!

Who will foot the bill? Not the bankers, developers and politicians who allowed this incredible situation to develop, but ordinary taxpayers. In the first half of 2010, these losses amount to nearly €2,000 for every person in Ireland! Yet the government proposes an “orderly winddown” over the course of around ten years that will in total cost the taxpayer an estimated €25 billion to €40 billion – well in excess of all of the cutbacks being imposed by the government.

Brian Lenihan recently outlined his reasoning for this, declaring:
“…we must stand behind our banks in order to ensure that a sustainable financial system is established and, in the case of Anglo, to ensure that the resolution of its debts does not damage Ireland’s international credit-worthiness and end up costing us even more than we must now pay.”

What it boils down to is this – Anglo Irish has made massive losses as a result of the loans it gave to developers and speculators who have now gone bankrupt. In a system supposedly built on “risk taking”, these losses should mean that Anglo Irish Bank would be unable to repay those it owes money to. However, as a result of the government’s capitalist nationalisation and guarantee, the taxpayer will pick up the bill as the government is promising to pay all of its creditors.

The vast majority of these creditors are not working people, but rich investors and speculators who chose to invest in the hope of making a profit. There is €16.5 billion of “subordinated” and “senior” debt, the vast majority of which is not held by ordinary householders. These investors should take their losses – with compensation only on the basis of proven need. In that way, the taxpayer would be saved the burden of paying for Anglo’s collapse.

 

Total
0
Shares
Previous Article

Door shut on thousands seeking education

Next Article

Severe health cuts hit the West

Related Posts
Read More

Heading for default – Workers’ movement must resist austerity

At the end of March the Fine Gael/Labour Government announced a €24 billion bailout for Ireland's four remaining banks. In so doing, the government indicated that their banking policy is a mere carbon copy of that previously pursued by Fianna Fail and the Green Party. Here, socialistparty.net, looks at the very real prospect for default which haunts the establishment.

Read More

Eurozone Crisis: What Next?

Recently engaged in a round of backslapping, the leaders of Europe suggested that we were turning the corner out of the crisis. In Ireland despite all the evidence to the contrary, the government is still trying to talk up the prospect of a ‘deal’ on the bank debt. But on the ground, the crisis is worsening, austerity is destroying people’s lives and the economies of Europe. In the first of two articles on the future of the EU, first published on Irish Left Review, Paul Murphy MEP examines the immediate prospects for the eurozone crisis in the next months.

Read More

Socialism – the alternative to the failed market

By Kevin McLoughlin

SOCIALIST POLICIES are needed to solve the economic crisis and its devastating effects on the living standards and lives of ordinary people.

Socialist policies are relevant to the key problems facing people today, the draconian pay cuts, the housing crisis and looming mortgage crisis, the vicious cutbacks in health and education, and crucially the emergence of mass unemployment.

The tax hikes in the budget represent a universal pay cut and are part of an overall desire of the government and bosses to slash general wage levels by up to 20%. They are intent on imposing a race to the bottom. The Quick Service Food Alliance, which is made up of the main fast (bad) food outlets, are attacking some of the lowest paid workers, demanding that they give up payments for Sunday working etc. The minimum wage is also being attacked and undercut by bosses.

Budget Dole Cut: Government Cancel’s Christmas

By Helen Redwood

“THERE’S NO way of preparing for Christmas, that bonus is actually Christmas”. This reaction from one single parent spells out what the Scrooge-like scrapping of the Christmas bonus will mean for the 1.3 million people previously eligible.

Minister Lenihan’s “justification” that prices are falling won’t compensate for a time of year when everything goes up – prices, fuel bills, pressure to buy presents, costs of travelling to relatives.