Emergency legislation on bank debt rushed through Dáil

After a wretched day for the Dublin government, the Fine Gael/Labour coalition has this morning forced emergency legislation through the Dáil to liquidate the Irish Bank Resolution Corp (IBRC, formerly the failed Anglo Irish Bank).

President Michael D. Higgins was forced to cut short a state visit to Italy late last night to jet back to Dublin in order to sign the legislation into law.

The move was planned as part of a proposed ‘deal’ with the European Central Bank (ECB) to convert the fraudulent bank’s debts, currently in the form of a government promissory note, into long term sovereign government bonds.

As a result of the current and previous government’s insistence on repaying the international bondholders who funded Anglo’s reckless loan book, debts of 28 billion euro incurred in its collapse in 2009 have so far been shouldered by the Irish public. The government had hoped to repay the debts over a longer repayment schedule as sovereign debt issued in the name of the state’s ‘bad bank’, NAMA.

However, after details of the plan were published by financial journalists yesterday, the government declared it essential that the legislation be passed immediately, apparently to prevent a potential legal action by the bank’s creditors.

Worse still for the government, ECB bankers refused last night to back the deal because of its potential implications for the debts of other distressed Eurozone banks.

Nevertheless, the government demanded the immediate passage of the far-reaching bill which grants extraordinary and emergency powers to the Minister of Finance, Michael Noonan, including the right to negate the property rights of Irish citizens.

Aspects of the government’s plans had leaked out yesterday through newswires quoting German sources. But in a shambolic twist on the normal democratic process, the text of the legislation only emerged to TDs after 10.30pm, when both houses of parliament were allowed little over two hours time to vote the bill into law, without amendment.

Infuriated opposition TDs complained that they had no opportunity to study a 60-page document which has profound consequences for the state, and appears unconstitutional in a number of aspects. However, their pleas achieved only an additional 30 minutes before the ‘debate’ began after midnight.

Despite the shouting of some government TDs who were clearly under the influence of drink, there were passionate speeches from opposition figures such as Sinn Féin’s Pearse Doherty, Socialist Party leader Joe Higgins, and Richard Boyd Barrett of People before Profit.

Mr Doherty said the coalition was imposing an impossible burden on future generations. “Your winding up the bank but your not winding up the debt,” he said.

Long-standing promises of the current government that it would reduce the Anglo debt had ended in “a humiliating failure”.

“The only thing clear tonight is that there is no write-down and that the debts are being formalised as a sovereign debt.

“Tonight, this debt becomes as much as Labour’s and Fine Gael’s legacy as it is Fianna Fail’s. This government is repeating the mistakes of the past.”

He said there was “no clarity” that the agreement would improve the debt situation for the state or to reduce the “crippling austerity” people were labouring under.

“There is nothing yet to suggest that one Garda station will remain open or one rural school not having to close because of this so-called deal,” he added.

Minister Noonan accepted “there isn’t any deal done” in relation to the promissory notes, but suggested that further information might be released later today.

He claimed that because information relating to the proposal to liquidate IBRC was leaked by “international agencies”, there was an immediate risk to the bank. He said he had to take immediate action to secure the stability of the bank and the value of its assets. It was “unheard of for a liquidation to be announced only for it not to be implement immediately”.

Some 850 IBRC employees would lose their jobs with immediate effect, he admitted. He asked TDs not to focus on the details but to “look at the purpose” of the legislation. He also claimed that the Attorney General had “constitutionally proofed” the legislation.

After a debate of just under three hours the Bill was passed by 113 votes to 35, with Fianna Fáil backing the government.

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