Advertisement
If you have a new account but are having problems posting or verifying your account, please email us on hello@boards.ie for help. Thanks :)
Hello all! Please ensure that you are posting a new thread or question in the appropriate forum. The Feedback forum is overwhelmed with questions that are having to be moved elsewhere. If you need help to verify your account contact hello@boards.ie

Audit the Irish Debt!

Options
  • 12-06-2011 2:24am
    #1
    rocksteady36
    Registered Users Posts: 158 ✭✭


    A number of prominent Irish academics, writers and activists have backed a campaign to audit Greece’s public debt, amid suggestions that such an audit might also be required in Ireland.

    In Equador 2008.. "Ecuadorian Ministry of Economy and Finance launched the world's first debt audit commission to have the full support and involvement of the government."

    The commission has been divided into four "sub-commissions" to facilitate the audit process:
    1. Bilateral debt
    2. Multilateral debt
    3. Bonds and commercial debt
    4. Domestic debt
    In the 1970s Ecuador fell victim to unscrupulous international lending, which encouraged borrowing at low interest rates. But in over thirty years the country’s debt rose from $1.174 billion in 1970, to over $14.250 billion in 2006, a twelve fold increase, due in large part to interest rates that rose at the discretion of US banks and Federal Reserve from six percent in 1979 to twenty-one percent in 1981.

    In Ecuador, the debt audit helped successfully delete $3.2 billion from the debt: Ecuador unilaterally eliminated as illegitimate (“illegal ” or “odious”) – a debt of 3.2 billion dollars. Despite the embargo of the markets, there have been no big negative consequences for Ecuador.. On the contrary, the economy grew by 3.7% in 2010 and is expected to grow by 5% in 2011.

    Documentary below on Greeks debt and calls for audit of debt...

    http://www.dailymotion.com/video/xik4kh_debtocracy-international-version_shortfilms
    Tagged:


Comments

  • Options
    #2
    Scofflaw
    Registered Users Posts: 23,283 ✭✭✭✭Scofflaw


    I presume this is a follow-on to something announced early last month:
    A senior university academic is heading up an independent investigation into the mystery bondholders behind Ireland’s crushing national debt.

    The probe, backed by leading trade union Unite as well as debt and justice campaigns, is expected to report preliminary findings by the end of next month.

    A team of three researchers, led by Dr Sheila Killian, head of the department of accounting and finance at the University of Limerick, are hoping to uncover who is owed the massive banking debts taken on by Irish taxpayers.

    Jimmy Kelly, regional secretary of Unite, said while they expected some non-co-operation in the early stages, they would pursue every avenue to reveal the identities of those being paid out of the public purse.

    “Three years after the Irish government bought a ‘pig in a poke’ proffered by senior bankers, all of whom are now gone with massive pay offs, we still do not know to whom we owe this debt,” he said. “Everyone who is being forced to pay for the mistakes of a small elite will at least know who is being funded by their pay cuts, tax increases and austerity.”

    I have to say that I support this, even were it to show that I was completely wrong in my current views.

    cordially,
    Scofflaw


  • Options
    #3
    Scofflaw
    Registered Users Posts: 23,283 ✭✭✭✭Scofflaw


    On the other hand, I don't support you cross-posting this to other threads. Please desist.

    moderately,
    Scofflaw


  • Options
    #4
    rocksteady36
    Registered Users Posts: 158 ✭✭rocksteady36


    Its actually relevant to another thread on burning greece, so I posted on that thread, I don't see a problem. I offered it up as after watching the greek documentary I didn't agree with the idea of burning greece when its their corrupt politicians who has destroyed the country...Thought it might open ppls minds a bit on that thread...

    Auditing the debt in Equador went back decades and they systematically went through the countries debts and found that bonds for example were issued at 20% of their value, so it was illegal..But before that they deported the IMF and the World Bank officials...

    The Greeks feel the same kind of corruption happened their, so they could buyback the bonds at a haircut...They hope..

    Just read this and your right it is related to what your saying..Lets hope they go back decades, not just recent debt..

    http://www.debtireland.org/news/2011/05/04/citizens-debt-audit-for-ireland-launched/


  • Options
    #5
    edanto
    Registered Users Posts: 2,809 ✭✭✭edanto


    Sounds like something that could really throw some light on our debt crisis and possibly help us to find a way out of it. I'd be all for it.

    Can't imagine the bankers and their buddies will ever allow it to happen.


  • Options
    #6
    later12
    Closed Accounts Posts: 11,299 ✭✭✭✭later12


    rocksteady36 wrote: »
    In Ecuador, the debt audit helped successfully delete $3.2 billion from the debt
    Delete? Delete a debt? You make it sound like an administrative exercise. You might delete an email. You might delete (say) a poorly informed forum post that you later regret. You do not just delete a major sovereign debt.
    Despite the embargo of the markets, there have been no big negative consequences for Ecuador
    Despite my patients death, the tumour died. Therefore the surgery was a resounding success!

    If only this were even true... Ecuador only engaged in a selective buyback style of default - it did not delete or repudiate its debt

    There are similarities between Ireland and Ecuador, they have been mentioned a number of times on this forum. But some important differences in the context of the Ecuadorean debt audit and selective default
    • Ireland has no oil
    • Ireland is suffering a liquidity crisis - Ecuador was not suffering froma liquidity crisis at the time of the credit events
    • Ecuador had been in constant default since 1987. It was a serial defaulter (is a serial defaulter) or the most gigantic proportions - its credit ratings literally could not get any worse.
    • Ecuador has no need for international capital markets anymore, it knew it could borrow from Iran and Russia for their strategic interests. Therefore the Ecuadorean president and his Government did not care about who they offended - they did not have to care
    I am all for a debt audit, but not of the CAIC nature, not of the Ecuadorean nature, and not one that leads to the Ecuadorean result.


  • Advertisement
  • Options
    #7
    beeftotheheels
    Registered Users Posts: 1,675 ✭✭✭beeftotheheels


    later10 wrote: »
    [*]Ecuador had been in constant default since 1987. It was a serial defaulter (is a serial defaulter) or the most gigantic proportions - its credit ratings literally could not get any worse.

    Clearly not true, they are only B- (S&P rating) on a par with Pakistan and Jamaica, Greece (now at CCC) is the only one who is worse! So we should aspire to being Ecuador, or Pakistan, or Jamaica, or anyone who is better than Greece, that has to be a good thing for Ireland!


  • Options
    #8
    rocksteady36
    Registered Users Posts: 158 ✭✭rocksteady36


    I just cut and paste from articles, forgot to put up the links.

    http://www.dailypaul.com/141028/ecuador-declares-foreign-debt-illegitimate

    http://www.eurodad.org/aid/article.aspx?id=114&item=1502

    http://hellasfrappe.blogspot.com/2011/04/concept-of-odious-debt-gaining-wider.html



    http://www.afri.ie/campaigners-call-for-debt-audit/

    Press Release, 3 March 2011

    A number of prominent Irish academics, writers and activists have backed a campaign to audit Greece’s public debt, amid suggestions that such an audit might also be required in Ireland. Greek campaigners are calling for an independent and international Audit Commission to find out why the debt was incurred and the uses to which borrowed funds were put. There is a widespread belief that much Greek debt was used for wasteful or corrupt purposes and that the cost of repayment should not be borne by the Greek people. Among the Irish figures supporting the Greek debt audit campaign are writer Fintan O’Toole and former UN assistant secretary general Denis Halliday. International supporters of the campaign include renowned linguistics professor and writer Noam Chomsky and filmmaker Ken Loach.

    The campaign is also backed by the Irish justice group Action from Ireland (Afri). Denis Halliday, who is a patron of Afri, said “In Greece, as elsewhere, ordinary people are being made to pay for the recklessness and greed of the banks through harsh austerity measures. The banks have been allowed to gamble with the lives and livelihoods of the poor for too long. It is time people stood up against the power of finance and put themselves back in charge of their own economies. In Greece, as throughout the world, a debt audit commission is a vital step towards a more just financial system.”

    Afri chairperson Andy Storey says that the call for a debt audit might well be extended to Ireland: “as in Greece, there is a lot of confusion about who owes what to whom, and why, especially when it comes to the bank debts guaranteed by the Irish government”. Mr Storey pointed to a repayment of €750 million made by state-owned Anglo Irish Bank in January this year to a creditor who was not covered by the guarantee – “who was that creditor, and why did they have to be repaid from the public purse?”, Mr Storey asked, adding that an Irish debt audit would allow us answer such questions.

    Øygunn Brynildsen of the European Network on Debt and Development, which backs the call, said, “failing to hold lenders to account for reckless behavior, combined with a lack of transparency, encourages bad lending and, ultimately, chronic and unjust debt.”



    http://mrzine.monthlyreview.org/2011/ireland190511.html

    The Irish debt audit will be carried out by 3 independent researchers commissioned by the sponsoring organizations and will seek to answer the following questions, amongst others:

    What is the overall scale of the Irish debt?

    To whom is the bank debt (for which the state has assumed responsibility) owed?

    When was this debt contracted? Specifically, was it before or after the government's bank guarantee was issued?

    When does the debt fall due for repayment? And how much has already been repaid, and to whom?

    How much of the debt is senior, guaranteed and subordinated? And what are the legal implications arising from these different categories?


  • Options
    #9
    Geuze
    Registered Users Posts: 13,108 ✭✭✭✭Geuze


    There is plenty of info on the public/fiscal/Govt debt at www.ntma.ie


    It's harder to get details on the bank bonds, but there is info on NAMAwinelake:

    http://namawinelake.wordpress.com/

    For example, here:

    http://namawinelake.wordpress.com/2011/06/13/burning-the-bondholders-part-2-of-3-%e2%80%93-details-of-the-bondholdings-now-being-burned/


    Seamus Coffey of UCC also has a lot of data on his blog:

    http://economic-incentives.blogspot.com/


  • Options
    #10
    Geuze
    Registered Users Posts: 13,108 ✭✭✭✭Geuze


    http://namawinelake.wordpress.com/2011/06/13/burning-the-bondholders-part-2-of-3-%e2%80%93-details-of-the-bondholdings-now-being-burned/

    This gives details of the junior / sub bank bond debt that it is proposed to restructure in the current round.


  • Options
    #11
    Geuze
    Registered Users Posts: 13,108 ✭✭✭✭Geuze


    Bonds+in+Covered+Banks+(Updated)%5B3%5D.jpg


    This table gives the amounts of the various bank bonds in early 2011.


  • Advertisement
  • Options
    #12
    rocksteady36
    Registered Users Posts: 158 ✭✭rocksteady36


    Geuze wrote: »
    Bonds+in+Covered+Banks+%28Updated%29%5B3%5D.jpg


    This table gives the amounts of the various bank bonds in early 2011.

    Thanks, its good to see constructive input..


  • Options
    #13
    later12
    Closed Accounts Posts: 11,299 ✭✭✭✭later12


    I think when the OP talks about auditing Irish debt he is not talking about the arithmetic approach, but the legal approach. Certainly that is what happened in Ecuador. A puiblic inquiry was established to audit the total amount of debt owed and to assess whether this debt was legitimate or illegitimate debt.

    Some of the illigetitimate debt which the Ecuadorean President had a particularly personal dislike for was then bought back with huge haircuts.

    The Ecuadorean audit was not so much about how much physical debt was in circulation, it was a question of the legitimacy of that debt.

    I am not a legal expert by any means, but I do not see how a case could reasonable be made that the sovereign debt is in any way illegal, regardless of how much we dislike the debt. And I doubt that such a proclamation would be unlikely to be greeted with much submission.

    True, arguably in Ecuador there was no drmataic response to it (apart from Ecuador being locked out of the capital markets) but of course its reputation was at that time as low as it could go (20 years of being in a constant technical default).


  • Options
    #14
    ei.sdraob
    Closed Accounts Posts: 9,376 ✭✭✭ei.sdraob


    someone did just that

    An Audit of Irish Debt
    Dr Sheila Killian, Dr John Garvey, Frances Shaw
    University of Limerick, September 201

    dont look on page 21


  • Options
    #15
    Godge
    Closed Accounts Posts: 21,727 ✭✭✭✭Godge


    ei.sdraob wrote: »
    someone did just that

    An Audit of Irish Debt
    Dr Sheila Killian, Dr John Garvey, Frances Shaw
    University of Limerick, September 201

    dont look on page 21


    When I saw Fintan O'Toole's name in support of this and Afri, my eyes began to glaze over. Still, given it was supposed to be an academic paper, I thought I would give it a chance. However, the figure of 371 billion for total State debt is out of line with all other forecasts.

    http://economic-incentives.blogspot.com/

    See this blog for a more accurate read-out of where the debt figure will end up.


  • Options
    #16
    ei.sdraob
    Closed Accounts Posts: 9,376 ✭✭✭ei.sdraob


    Which of the figures in particular do you have a problem with? Waving your hands about doesnt make all of these liabilities disappear

    Dont you think that dismissing an academic publication by pointing at someone blog is a tad bit desperate?


  • Options
    #17
    Godge
    Closed Accounts Posts: 21,727 ✭✭✭✭Godge


    ei.sdraob wrote: »
    Dont you think that dismissing an academic publication by pointing at someone blog is a tad bit desperate?

    No, read the blog.


  • Options
    #18
    ei.sdraob
    Closed Accounts Posts: 9,376 ✭✭✭ei.sdraob


    Godge wrote: »
    No, read the blog.

    Way to ignore the 1st question

    Btw i do read his blog, its interesting but blogs are not the place where academic peer review occurs,
    if that was the case then global warming (sorry climate change) would be "proven" wrong as the subject gets particular attacks on many blogs! imagine that now...

    The linked paper is well written with many details and worth reading, they have done a good job at identifying, quantifying and presenting all the debts/liabilities and presenting it as per paper subject, they also have outlined the assets and so on.


  • Options
    #19
    Scofflaw
    Registered Users Posts: 23,283 ✭✭✭✭Scofflaw


    Godge wrote: »
    When I saw Fintan O'Toole's name in support of this and Afri, my eyes began to glaze over. Still, given it was supposed to be an academic paper, I thought I would give it a chance. However, the figure of 371 billion for total State debt is out of line with all other forecasts.

    http://economic-incentives.blogspot.com/

    See this blog for a more accurate read-out of where the debt figure will end up.

    To be fair, they're at least explicit about how they arrive at their figure, and also that the figure represents liabilities rather than actual acquired debt. So their figure includes, for example, all the guaranteed bank debt, through both the ELG scheme and the Deposit Guarantee Scheme - I don't think anyone else has ever included the latter figure, but it's quite true (as ei.sdraob has pointed out elsewhere) that the DGS is under-capitalised, and the State is the final guarantor.

    They're also honest about probably including the bank bailout funds twice:
    Given the sharp increase in overall longterm government bonds outstanding since the start of the financial crisis, it is reasonable to assume that a large part of the €91.8 billion raised by the sale of government bonds was also due to the banking crisis.

    So in a sense, the figure of €371bn includes both the cost of bailing out the banks (and quite possibly includes it twice) and the cost of not bailing out the banks successfully. It also includes the cost of NAMA bonds without any corresponding nod in the direction of NAMA's assets, which is pretty standard as well, although it seems silly to me.

    cordially,
    Scofflaw


Advertisement