Paying €1.1bn to bondholders is con job
Paying off private investors who took a risk while the State cuts funds for training disabled teenagers is obscene, writes Stephen Donnelly
THIS week, we're all going to be taken for mugs. Again. Over the next four days, €1.1bn will be paid to senior unsecured bondholders in the former Anglo Irish Bank and Irish Nationwide Building Society. Last year's election was meant to put a stop to this type of grand theft. Sadly, nothing has changed. If this Government is ever going to get a significant deal on the debt, it should act like its debts are unsustainable, and take a look at the credit history of our European partners.
The Government won't ask who this week's bondholder winners are, but there are some things we do know. The bonds were bought from Anglo and INBS in 2007, at the height of the property bubble. They offered higher profits than buying Government bonds, as they didn't come with a Government guarantee. If the people buying these bonds did their homework, they would have noticed that Anglo and INBS were massively exposed to the Irish property market. They will have read the IMF's warning of the "possibility of an abrupt unwinding of the housing boom". They would have known that the higher potential profits offered by Anglo and INBS came with the clear possibility of losses.