Workers Solidarity Movement

Minister for Finance Brian Lenihan, Taoiseach Brian Cowen and representatives of the National Treasury Management Agency have spent the time since early Tuesday afternoon boasting about their latest “successful bond auction”. 

Cowen has pointed to the “high level of demand” for the bonds as evidence of “more confidence [in] the investor market internationally”.  Lenihan has told the Oireachtas Finance Committee of how pleased he is that Ireland has “achieved its target of reaching €20 billion in the bond markets for 2010”.

All the talk of ‘bond auctions’, ‘yields’ and ‘bond spreads’ that we’ve heard in recent times leaves most people reaching for the off button on their radios or TVs.  It’s deliberately designed to bore us and to seem too academic and complicated for us to understand – We’re better off leaving that sort of thing to the economists, the politicians and the bankers (because they’ve done such a good job of things up to this!).

Truth is though it’s not that complicated at all.  What the government, through the NTMA, did on Tuesday was they borrowed another €1.5 billion from international financiers.  That’s another €1.5 billion that you and I and the taxpayers of the country are going to have to pay back.  Plus the interest of course!  It doesn’t sound nearly as bad when you ‘sell bonds’ ‘at a yield’.

And how about those lovely financiers who we’re supposed to be ever so grateful to for deigning to lend us the money.  Guess what - they’re charging us a full percentage point extra in interest than they charged us the last time we borrowed a billion (just a few weeks ago really).  That’s an extra €15 million per year for each of the next 8 years (or probably longer).  It’s no wonder the ‘auction’ was “over subscribed”. 

While Lenihan and Cowen refer to the fact that international financiers were queuing up to lend us the money as a sign of “confidence in the investor market”, what it really means is that these financiers see the dollar and Euro signs flashing in front of their eyes, and know that the Irish taxpayer is a sure fire bet for yet another pound of flesh.

When the Minister for Finance can sit in front of television cameras and boast that he’s managed to put us into debt of another €20 billion this year alone and see this as a measure of his success, the lunatics really have taken over the asylum!

WORDS: Gregor Kerr