Referenda, Promissory Notes and Anglo

So  it seems that there is going to have to be a new referendum, in order to put in place the treaty changes to underpin the Franco German proposal to end the Eurozone crisis. The proposals have an element which involves golden rules, so-called, on national budgets. And this would seem to involve a referendum.

Before the government even  moves a writ to proceed to a referendum it must in my view receive an ironclad guarantee that the Anglo-Irish bank promissory notes, which from March 31, 2012 will cost the  taxpayer  3.1 billion Euro per annum, will instead be paid by someone other than the Irish taxpayer.

Between January 1 2012 when we repay an un-guaranteed bond of The Bank Formally Known As Anglo and 31 March 2012 when we pay the first installment of a decade long commitment to TBFKAA in the form of 3.1b from the Promissory Note  we will in effect take out of the taxpayer an amount greater than the adjustment in this budget.  Every March 31 to 2023 we will pay 3.1b. And then we will pay 7.6b over the remaining 8 years to 2031. There are two excellent posts on the notes by Karl Whelan here and here

Now, it might be arguable that we should in fact radically accelerate the needed closing of the gap between spending and income. In that context, there would be few who would argue that if we HAVE to take 4b plus out of the economy the best way is to close the gap, not to pay the creditors of TBFKAA.

So, for me the calculus is simple. IF the government can get a deal that involves the notes being taken off the irish taxpayer, then they should go to move the writ for a referendum. If not, then no deal means no deal surely.

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