Irish government urged to stop 'zombie' bank payments

By agency reporter
January 24, 2012

As Ireland prepares to pay the latest instalment on the debts run-up by 'zombie' bank Anglo Irish, UK debt campaigners from Jubilee Debt Campaign will show their support for the newly formed Irish network Debt Justice Action in a dramtic action outside the Irish Embassy.

The group is calling for an immediate halt to payments of the bank debt, which were taken on by the Irish government back in 2008.

Anglo Irish collapsed due to its high exposure to Ireland's property bubble. The Irish Government initially paid €4 billion to prop up Anglo in 2009 and later guaranteed its debts, something now regarded as a mistake across the political spectrum. Since that time another €3.1bn has been paid.

Debt Justice Action argues that the debts of this now state-owned institution are not the responsibility of ordinary people in Ireland. They say a halt in payments must be the first step towards a more general renegotiation and write down of the country’s unsustainable and unjust debt, and that such a suspension would not have a contagion effect on Europe’s finances because most bond-holders have already been paid out.

British debt group, Jubilee Debt Campaign, is arguing for a 'jubilee-style' debt cancellation for Europe, to ensure the people of Ireland and other European countries are not stuck in a decades-long debt trap of austerity and economic contraction.

Nick Dearden of Jubilee Debt Campaign commented: "It is totally unjust to make Ireland’s people - especially the poorest in that country - pay for the crimes of speculators and the banking elite. The austerity being visited on the Irish people is deeply unjust. Across Europe and the world, the only way to build sustainable and just economies is large-scale debt cancellation and a crack down on speculation."

He continued: "A year ago George Osborne called Ireland a 'friend in need'. We call on the British government to assure Ireland that they would not take punitive measures if the government halted payment on these unjust debts, and that the UK would assist in a fair write-down of Ireland’s debt."

Nessa Ní Chasaide of global justice organisation Debt and Development Coalition Ireland (DDCI) added: "The unanimous message of campaigners in Africa, Asia and Latin America is that ruining whole societies to repay illegitimate debts is wrong and unworkable - a solution must be based on cancellation of illegitimate debts that ensure lenders are held accountable for their mistakes, rather than sacrificing people’s rights to fear of financial markets."

The result of Ireland’s high debt level - the majority of which comes from the collapse of the financial sector in 2008 - is a tight austerity programme. National income is already down over 15 per cent from its peak, while unemployment also stands at almost 15%, meaning close to half a million people out of work. Emigration is estimated to be running at 40,000 per annum.

* In 2012, Anglo Irish will be paying back €6.3 billion to its creditors – of which €2.6 billion is unsecured.
* The Irish government is currently obliged to pay down €30.6 billion worth of promissory notes on the basis of this debt over the next 20 years.
* An unsecured Anglo bond of €1.25 billion falls due on 25th January.

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