Promissory note deal – it’s a con!

Do not be conned by the promissory note deal. It represents no benefit to the ordinary people of this State; not in the short, medium or long-term. The deferral of this payment until next year is simply kicking the problem can further down the road.

The Leader of the Labour Party, Eamon Gilmore, triumphed it as “confounding our opponents with a great deal on debt”. In reality, Gilmore knows that this deal represents no value to the Irish taxpayer and was hastily put together to entice people into registering for the Household Tax.

g In essence, the €3.1 billion payment has been deferred with the writing of a 13 year-long bond. Meaning interest will be incurred yearly on both the covering bond and the promissory note. At the end of its term the principal payment will obviously still be due.

g The deal will take a further €90 million out of this year’s budget alone, through a combination of interest and other assorted costs. In real terms this represents employing an extra 1,800 badly needed teachers for one year.

g It was thought that a deferral would be arrived upon with the issuing of a government bond to cover the cost of the promissory note. Instead the deal has been shrouded in difficulty with NAMA initially advancing a bridging loan before Bank of Ireland’s shareholders approve the deal and take it over at the cost of €40 million.

g This comes as yet another kick in the teeth resulting from this outrageous deal as Bank of Ireland has received billions in bailout money from the Irish taxpayer and the State owns a 15% holding stake in the bank.

The ECB’s refusal to provide any leeway on this issue reflects how much contempt they hold for ordinary workers across Europe. This sham deal represents nothing other than yet a further bailout for the failed speculative financial system. Just as in Greece, the troika is trying to extract as much from the Irish taxpayer before invariably we can pay back no more.

The Socialist Party demands an immediate write-off of the promissory note debt by the Irish and European Central Banks. We call on the money instead to be used on mass job creation for public works and local services to reignite the Irish economy.