Draghi Questioned in European Parliament on Banking Inquiry Report

by Luke Ming Flanagan

Today in the European Parliament Plenary session, and following on from the recent report of the Banking Inquiry, I got an opportunity to put a question directly to Mario Draghi, current President of the ECB. Given that the speaking time allotted was just one minute, the question by definition was short and pointed, as follows:

‘The recently published report of the Banking Inquiry in Ireland points an accusatory finger directly at the ECB, estimates that over €9bn could have been saved on applying haircuts to the unsecured unguaranteed bondholders but for the threats and bullying of your predecessor, Mr Trichet.
That €9bn is gone, history, but there is an even greater injustice happening to Ireland right now under your watch, Mr Draghi.

I’m referring to the ongoing destruction of €31bn, the Promissory Note bonds.
Those billions were created in 2009/10 to bail out the creditors of two insolvent Irish banks but more significantly, to help protect the euro itself – the banks were non-systemic.

Those banks were eventually liquidated but the ECB now insists that the entire €31bn must be taken out of circulation by our Central Bank.

Already we’ve borrowed and destroyed €6bn. Our Central Bank still holds €25bn, awaiting the same fate – a heavily indebted country forced to borrow billions, to destroy.
I’m asking today, directly, will you please work with us to stop this obscenity; do not let this be your legacy to Ireland, or our legacy to our children.

PLEASE answer this question, make it a first for me in the Parliament that my question will be answered.’

Did I get an answer? Not likely. Instead I got the equivalent of ‘Promissory Note injustice for Ireland? Oh, that would be Hatch 7 sir, way over there in the next building’.

Not surprising really, given the way the parliamentary ‘exchange of views’ works in Strasbourg. Mr Draghi comes in, makes an introductory speech where he claps the ECB (and by extension, himself) on the back, then invites questions. One by one we follow each other in the carefully structured queue, over 50 questioners and each with a different angle. Mario takes notes, waits til all the question time is used up, then rises and in the 15 mins or so he’s given to respond, carefully chooses which questions he will grace with an answer, avoiding all the rest.

He didn’t answer me, but did take the opportunity to head off into the jungle of political-speak, starting with a watery admission that when the crisis hit – and as has long been claimed by the Ballyhea campaign group – there was fault attached to the design of the euro itself. ‘When the Troika was set up in early 2010 the European Monetary Union was not equipped to deal with Member States losing market access.’

Then the heavier undergrowth, more ECB/Draghi self-praise and self-congratulations from Mario. ‘In the run-up to the first Greek crisis Member States sought an advisory role for the ECB alongside the Commission and the IMF and it was considered to be a useful complement to assure a strong programme. In short the Troika was created to draw on the diverse experience of the institutions. There was not only a good reason to provide its advice in the context of the programme work but also a good case for the ECB to accept this request. In line with this the ECB has since provided its advice in five Member States. But we should not forget that the final responsibility in the decisions on programme design and financing lies with the Eurogroup and the Eurogroup Ministers in their capacity and with the ESM, and not with the institutions involved in the programme.’

And with that Pontius Mario washed his hands, will sit back and watch as the Irish people are crucified, €25bn awaiting destruction by the Central Bank of Ireland to go with the €6bn already destroyed, all the legacy of the Promissory Note Anglo/INBS bailout, which in truth was a bailout of the euro itself.

Crucified, unless – as Easter and a general election approaches – we in Ireland finally decide to make a stand. On the centenary of the 1916 Rising, would it not be fitting?