In case you missed it, holders of Anglo bonds will make a big profit from the €711 million that Fine Gael and Labour are paying out today. Three months ago Anglo bonds were being traded for as low as 52 cent, with large volumes trading at around 60 cent. So a financial speculator who bought a million Anglo bonds for €600k during the summer is getting €1 million from the Irish government today – a 66% profit. In order to pay these un-named speculators, the Irish state has borrowed from the ECB and IMF – and is imposing cuts on public services to repay borrowings and interest.
The same priorities are revealed in the explanation by Harry Crosbie of how NAMA is a bail-out for developers. The banks made loans to developers, who could not pay back. NAMA bought those loans at a 58% discount. NAMA then provided money to developers to complete their projects and get back some of the money it paid the banks. But the developer only pays NAMA what NAMA paid for the loans – and gets a 58% discount on the original bank loan.
So that’s where your money is going: the €711 million (out of a total of €29.5 billion) that Irish governments have paid Anglo bondholders are giving some wealthy speculators a 66% profit today. The €72 billion that has gone into the NAMA process is being used to bail out wealthy developers – who only pay 42% of their debts – thanks to state support.
There is ample willingness by FG and Labor to continue to borrow, placing the debt on the shoulders of ordinary working people and cutting public services, so as to pay the profits of speculators and the debts of developers. The politics of the mainstream parties – in defence of the interests of the wealthy elite at cost to working people – have rarely been more clearly revealed.