THE DÁIL sat late into the night to consider dramatic emergency legislation which would liquidate the Irish Bank Resolution Corporation – the former Anglo Irish Bank.
The legislation, the ‘IBRC Resolution Bill 2013’, was passed by the Dáil shortly before 3am by 113 votes to 35.
The commentary below recounts proceedings from the Dáil, as they happened, between 10:30pm and about 3am when the Bill was finally passed.
22:19 – 22.19 – WELL NOW. I think it’s fair to open by saying we didn’t expect to be here right now.
Good evening – it’s Gavan Reilly here to cover proceedings from Leinster House as the Dáil and Seanad debate the Irish Bank Resolution Corporation Resolution Bill 2013.
22:24 – 22.24 – From what we know so far, the Bill looks like it’s part of a not-so-simple deal to scrap the promissory notes – but which will instead see the government issue a range of long-term sovereign bonds in their place.
In short, it turns a banking debt into a sovereign one – but by delaying the repayment for decades, its value is ultimately reduced because of the effects of decades of inflation in the meantime.
22:25 – 22.25 – Here’s a worrying start: the Dail sits in five minutes, and the opposition doesn’t yet have a copy of the Bill it’s going to be debating.
22:31 – 22.31 – On TV3, Ursula Halligan has said that this legislation – and the whole rigmarole about tonight’s proceedings – is a contingency plan that was ready months ago. The story goes that the “leak came from Frankfurt’s end” – suggesting that afternoon reports about Patrick Honohan‘s negotiating tactics were enough to send the government into its emergency mode.
22:32 – 22.32 – OKAY. RTÉ’s David McCullagh says the legislation has only just been dropped into TDs’ letterboxes for them to look at – prompting the chief whip to delay Dáil proceedings until 11pm.
22:38 – 22.38 – Tweets from TDs indicate that the opposition spokespersons are being briefed on the Bill as we speak. Fianna Fáil’s Michael McGrath, Sinn Fein’s Pearse Doherty and the ULA’s Richard Boyd Barrett are among those being briefed.
22:42 – 22.42 – The word from inside Leinster House, by the way, is that although there’s a bit of strain between Fine Gael and Labour this week – mostly over the Taoiseach’s non-apology to the Magdalene women – there is little prospect of any back-bench defections over this Bill.
Both parties see any work to wind up IBRC as a “victory” – though there has been some minor discomfort in the backbenches that TDs may be forced to back the issue of government bonds, in lieu of the promissory note, at the same time.
So conflicting moods for some, but either way, little chance of a fracture in the coalition.
22:45 – 22.45 – TV3 update: “This is all lunatic stuff,” moans Vincent.
22:47 – 22.47 – Still no electronic copy of the Bill, by the way, which folk on the Twitter Machine™ say stretches to about 50 pages.
23:01 – 23.01 – Right. TDs are filing into the chamber, apparently having been briefed on the contents of the Bill.
Says Waterford independent TD John Halligan: “This legislation is madness.”
23:02 – 23.02 – Good evening. It’s 11 o’clock. Do you know where your children are?
Well, if your child is a TD, you know exactly where you are. Outside of Budget day, the Dáil is never this packed.
23:04 – 23.04 – We’re in business. The Chief Whip is outlining the timetable tweeted by Thomas Pringle and having those rules confirmed. (Still no electronic copy of the Bill, by the way.)
23:05 – 23.05 – Says Richard Boyd Barrett: “Only 2 hours 15mins to read & vote with no details of broader deal in Europe.” Not happy then.
Right, here we go…
23:06 – 23.06 – Micheál Martin is up first, querying those procedures: he says Michael McGrath has only just gotten the Bill and it’s not fair to force them straight into a debate without getting a chance to read it first. “We have not seen the bill. It’s extraordinary.”
23:07 – 23.07 – Martin: “15 minutes, 10 minutes, a five minute wrap up… no committee stage, essentially, for any detailed examination of the bill… I think it’s unacceptable as proposed.”
Enda Kenny offers to adjourn until 11:30pm. The opposition rejects the idea.
23:08 – 23.08 – Gerry Adams says this is a more fundamental issue, and recalls the government’s promises about “a new way of doing business”. He’d be “immensely surprised” if even the government TDs had read the Bill.
23:10 – 23.10 – Richard Boyd Barrett also has an issue – pointing out that the State was bankrupted by legislation that was passed in ways similar to how this Bill is going to be pushed through. “The Finance spokespeople were briefed 15 or 20 minutes before the session began.”
23:10 – 23.10 – WE HAVE A BILL!
23:11 – 23.11 – A quick snapshot of the Bill, which (unusually) has a preamble: The Bill says “the winding up of IBRC is necessary to resolve the debt of IBRC to the Central Bank of Ireland”.
(If that was the case, why didn’t it happen sooner?)
23:13 – 23.13 – “This Bill has been planned for quite some time,” says Enda. The Bill gives legal protection to the assets of the State, he adds.
He again suggests an adjournment, until 11:45pm, for TDs to get a go to discuss it. Micheál Martin isn’t wild at the idea, because it means just kicking the can down the road (!) all night. “Just say midnight, Taoiseach.”
23:16 – 23.16 – Enda, having canvassed for opinion, gets approval from Micheal Martin and the Technical Group to defer to midnight. Gerry Adams isn’t keen, saying that’s not enough time – but the midnight deadline seems to be accepted.
The Dáil stands adjourned until midnight to give TDs a chance to read the Bill.
23:16 – 23.16 – So – let’s have a look at the Bill then…
23:18 – 23.18 – The purposes of the Act are:
- to help to address the continuing serious disturbance in the economy of the State;
- to provide for the winding up of IBRC in an orderly and efficient manner in the public interest;
- to end the exposure of the State and the Bank to IBRC;
- to help to restore the financial position of the State;
- to help to enable the State to re-establish normalised access to the international debt markets;
- to assist, to the extent achievable, in recovering the financial assistance provided by the State to IBRC as fully and efficiently as possible;
- to resolve the debt of IBRC to the Bank;
- to protect the interests of taxpayers;
- to restore confidence in the banking sector by furthering the reorganisation of the Irish banking system in the public interest;
- to underpin Government support measures in relation to the banking sector.
23:19 – 23.19 – The legislation provides that the Minister for Finance will issue a “special liquidation order” as soon as possible after the Bill is passed; after this is done, no person can bring a petition to wind up IBRC or any of its subsidiaries. This will bring about an immediate freeze in any legal action involving IBRC.
It will terminate the employment of every IBRC employee with immediate effect.
23:21 – 23.21 – While employees will be laid off immediately, the Special Liquidator (that’ll be KPMG) will still have the power to engage with any of IBRC’s employees as is “necessary or beneficial for the orderly conduct of the winding up of IBRC.”
23:23 – 23.23 – In a trigger clause to ensure that white-collar proceedings against former Anglo employees aren’t interrupted, the Act would
not affect any proceedings taken, investigation undertaken, or disciplinary or enforcement action undertaken by the Bank, the Director of Public Prosecutions, An Garda Síochána, the Director of Corporate Enforcement or any regulatory authority, in respect of any matter in existence at the time the Special Liquidation Order was made or other thing was done
23:27 – 23.27 – Here’s an interesting bit. The Bill explicitly allows for any of IBRC’s assets or liabilities to be sold to anyone who’s willing to take on such obligations. This includes security on loans, the obligation to repay loans, and all the rest.
This basically paves the way for all of IBRC’s assets and liabilities to be sold off to either the Central Bank or NAMA as needed.
Explicitly, by the way, the Bill also enshrines that the liquidator has to undertake whatever suggestions are deemed necessary by the Minister. They can only act on the Minister’s command, basically.
23:27 – 23.27 – The Bill provides that if anyone wants an injunction to stop the liquidator from taking any action, the court will have regard “to the public interest” and to the purposes of the Act I mentioned earlier. This, explicitly, discounts the fear that someone could be made bankrupt.
23:32 – 23.32 – The Bill also takes away the Central Bank’s powers to wind up IBRC… and, in a very very weird clause, basically turns the Department of Finance into a bank. It allows the Minister to issue securities (that means bonds) – which he can then sell to other financial institutions.
The idea is that it ultimately allows the Minister to create enough bonds to eliminate the promissory notes.
23:32 – 23.32 – From Gerry Adams on Twitter:
The government’s approach to introducing this Bill has been a shambles.
23:37 – 23.37 – UCD’s Karl Whelan, on Twitter, points out that the Bill has a pretty big section that essentially stops creditors from jumping the queue down at the Four Courts.
This could add weight to what some of the government’s talking heads have been saying vicariously on TV3: the cat is now out of the bag, so to speak, and unless this legislation has been given legal effect by 7am there’s a risk that investors could withdraw their money from Ireland.
23:38 – 23.38 – Joe Higgins on TV3:
I think this is an incredibly chaotic way to run a country. My first thoughts are with the 800 employees of the former Anglo Irish Bank… who will be out of a job tomorrow.
23:40 – 23.40 – Here’s an interesting point. (Someone call the Council of State.)
The preamble to the Bill points out that…
…in the achievement of the winding up of IBRC, the common good may require permanent or temporary interference with the rights, including property rights, of persons.
Now, why is that interesting? Because this is Article 43 of the Constitution…
1° The State acknowledges that man, in virtue of his rational being, has the natural right, antecedent to positive law, to the private ownership of external goods.
2° The State accordingly guarantees to pass no law attempting to abolish the right of private ownership or the general right to transfer, bequeath, and inherit property.
23:47 – 23.47 – Another odd feature… Section 11 of the Bill:
Part 7 of the Central Bank and Credit Institutions (Resolution) Act 2011 shall not apply to the winding up of IBRC.
That’s a clause which provides that the Minister for Finance, in regulating Ireland’s banks, “shall have regard to the laws of the European Union (including those governing State aid) and any relevant guidance issued by the Commission of the European Union.”
Now, that’s a pretty academic point – European law supersedes Irish law, whether it’s explicitly stated or not – but it’s an odd thing to point out…
23:50 – 23.50 – The mechanics of all of this are still very complex and up in the air. The Act provides that a special liquidator is appointed with immediate effect… and also allows the Minister for Finance to order NAMA to bid for any assets being put up for sale.
This means that many of IBRC’s loans – including the disputed ones to the Quinn family – could simply be acquired by NAMA and continued.
That answers the questions that many of you had about whether the marathon Quinn legal disputes disappear immediately: The answer is no. The Act provides that all action is frozen for the time being, and gives enough time for other entities (probably NAMA) to divvy up IBRC’s carcass between them.
23:52 – 23.52 – Re 23:40 and the point about the constitutionality of the Bill: it should be pointed out that a Preamble is all well and good, but unless the Bill itself explicitly infringes on a person’s property rights, that’s a bit moot. It’ll be up to the courts – and to legal minds better educated than mine! – to decide if that’s the case.
23:55 – 23.55 – Stephen Donnelly on TV3: There are two very dangerous pieces to this legislation. The first is that it transfers the promissory note from IBRC to the European Central Bank – and this matters in terms of political negotiations. The people of Ireland will no longer owe €28bn to dead banks, but to the ECB – which is legally prohibited from ever forgiving that or writing it off.
The second is Section 17, which gives the Minister the power to restructure any IBRC assets (and become a bank) as he wishes, without any Dáil oversight. This gives the Minister the power to issue bonds and issue a charge on public funds without scrutiny – which, Donnelly reckons, breaches the Constitutional insistence that the Dáil must approve any costs to the public.
0:01 – 0.01 – Here’s the Irish Independent’s front page tomorrow, with the blaring headline: “NIGHT OF DRAMA AS €2BN ECB DEBT DEAL UNRAVELS”. It’s suggesting that the ECB, despite all of this hubbub about IBRC being abandoned, isn’t likely to approve the proposal being put to it by Patrick Honohan at all, and says the deal now “hangs in the balance”.
At this stage, this doesn’t really impact on the point of this Bill – the cat is out of the bag now, and IBRC needs to be wound up by tomorrow morning or else all hell will break loose in terms of the future of IBRC (and possibly its owner, the government, and the banks that the government owns).
All it proves is that… well, if this is part of the solution to the ECB promissory note problem, it’s not the final piece of the jigsaw.
0:01 – 0.01 – Now. It’s midnight – so an official good morning to you all from TheJournal.ie HQ. It’s Gavan Reilly here to liveblog proceedings from the Dáil chamber as TDs debate emergency legislation to liquidate IBRC, the former Anglo Irish Bank.
0:03 – 0.03 – Here’s the Ceann Comhairle to set the ball rolling (for the third time tonight), and here’s Michael Noonan.
0:05 – 0.05 – Noonan: “The ECB is considering a proposal from the government” to end the promissory notes, part of which is the winding up of IBRC and its sale to NAMA. Once word got out about this, I needed to act to safeguard its assets and this means acting immediately.
Once this is passed, joint liquidators will be appointed to IBRC immediately. Its debts to the Central Bank will be purchased by NAMA, ensuring there is no capital loss to the Central Bank. Eligible depositors, bondholders and everyone else will be repaid under the bank guarantee schemes.
0:07 – 0.07 – Noonan: As is common, all employment contracts are immediately liquidated, but the majority of the staff will be rehired by the liquidators as they need.
Following an independent valuation process, the liquidators will sell IBRC’s assets to third parties at (or above) their independent valuation. Failing that, they’ll sell them to NAMA for their valuation price. The money raised will be used to pay off creditors, with the usual procedures (meaning employees first). Unsecured creditors, including the Minister, will come last.
0:08 – 0.08 – Noonan: Any remaining subsidiaries of IBRC will be wound up or sold. Once its obligations are sorted out, IBRC will cease to exist.
The minister is now going through the sections of the Bill and explaining what each one does. Again, if you missed the link earlier, here’s the Bill.
0:14 – 0.14 – Noonan: All eligible deposits, up to €100,000 for an individual and €200,000 for two individuals with a joint account, are protected by Irish deposit guarantee schemes. Anything beyond that is covered by the other bank guarantee. The situation for most people – including those who hold deposits in IBRC – will remain unchanged.
The reason these steps are being undertaken has nothing to do with the management of the bank, Noonan says, thanking the senior management and Board of the bank for their work. “I regret the abruptness of how this decision was communicated” to the staff, Noonan says, citing the public interest.
0:15 – 0.15 – Noonan says, again, that most of IBRC’s staff will be rehired by the liquidator – on the liquidator’s terms – to help wind down IBRC. Workers will get statutory redundancy, pension contributions, holiday pay, and all the usual obligations.
This will be a shock to the bank’s staff and customers, and liquidators will be instructed to deal with this as appropriately as possible.
Noonan wanted to bring this to the Dáil in tandem with a deal on the promissory notes, but understands that the ECB is still considering Honohan’s proposals and therefore he can’t do so for now.
0:16 – 0.16 – Here’s Michael McGrath from Fianna Fáil, who says the way this has been handled is not good. This has been clearly up the government’s sleeve for some time, he says; it’s a shame that we’re being told we pose an immediate risk to IBRC if we don’t wind it up right now.
He’d have liked more detail about what those risks actually are, and is disappointed that the government hasn’t done more to explain these risks, given that word of this legislation has been around for many hours now.
Irrespective of whoever leaked these details first, McGrath says, they were immediately outdone by others who were happy to confirm the leak and to further the extent of the details known to the public.
0:17 – 0.17 – McGrath: This has to be seen in context. This is a technical liquidation of IBRC which will involve all of its assets being given to NAMA, and worked out “in the fullness of time”. A normal liquidation means all of the assets being realised immediately – a fire sale, in other words. That’s not what’s happening here. IBRC will live on in a different form by having its assets transferred to NAMA.
0:18 – 0.18 – McGrath wants more assurances from Noonan. “This Bill presents very fundamental questions.” He mentions firstly the many legal cases that IBRC is in, including its outstanding junior bondholders, and many others. “The best legal brains in this country and further afield will be poring over every single word, dot or comma in this legislation” to confer an advantage to their comments – so can Noonan guarantee that the legislation has been constitutionally proofed?
0:21 – 0.21 – McGrath points out that only five months ago, Noonan ruled out merging IBRC and NAMA – so why basically do it now?
Also, what are the implications for IBRC’s outstanding unpaid bondholders? Will this result in burden-sharing with those bondholders?
0:24 – 0.24 – McGrath now visits the topic of bank staff being laid off. He expects that the majority will be recruited by the liquidator, and then probably by NAMA… Can you give a guarantee that this is the case?
We’re working on good faith that not passing this bill exposes IBRC – and by extension the country itself – to substantial risk. We have no objection to IBRC being wound up immediately. But we do want a guarantee that the national interest is being fully protected by doing so.
0:25 – 0.25 – McGrath: I hope there’s an ECB deal to announce tomorrow, but Fianna Fáil’s support will not be taken for granted. Last June’s agreement on separating banking and sovereign debt should be the objective of all our negotiations. How would it be fair if our total stock of bank debt is not reduced by a single cent?
0:27 – 0.27 – McGrath: Based on today’s leaks, we’re going to be having a very long debate at some point. We’ll want the total stock of debt reduced. You’re apparently proposing to convert the promissory notes to a government bond, which can never again be restructured. This is a chance for Ireland to get the best deal we possibly can; that’s the prize at stake. [...] I hope that’s a deal that helps to relieve our burden, that people feel in their pockets and the domestic economy will benefit from.
0:29 – 0.29 – Sinn Féin’s Pearse Doherty: This time last year we were asked to come to the chamber, and were told that the State had cobbled together a deal to avoid repaying last year’s promissory note. We were asked to applaud the government. As the mist faded and the cobwebs were dusted away, we realised that it would ultimately be repaying it anyway.
0:31 – 0.31 – Doherty says the briefing that finance spokespersons were given earlier on never got to finish, because they were called back to the Dáil – so there are questions which were asked which haven’t yet been answered. One thing is clear, he says: the government intends to repay every last cent of the Anglo Irish Bank promissory notes.
The way this Bill is being pushed through is an “affront to democracy”, he says – it’s not fair to push through a law governing a €40bn bank and giving the Minister for Finance infinite power to do as he likes with it.
0:32 – 0.32 – Doherty: If NAMA is buying assets from IBRC and it doesn’t make up their full price, the Minister (and the taxpayer) will be covering up the shortfall. “Those dodgy emails” between the Central Bank and Brian Lenihan come back to haunt us.
0:33 – 0.33 – Doherty: IBRC has 850 employees in this state, and about 150 others in other jurisdictions. They’re not all on astronomical salaries, but they were told today – through Bloomberg – that their jobs were gone. “How can we stand over that?” Doherty asks.
0:36 – 0.36 – Doherty: It’s easy to say, ‘pull on the green jersey and support this’ – when that’s exactly how Fianna Fáil’s administration led us into this fiscal mess in the first place.
The vast majority of government TDs have not read this legislation; of those who have read it, I’d say very few understand its consequences.
(And we have the first jeers of the night. Who had 12:35am in the sweetstake?)
0:36 – 0.36 – Doherty then moves onto what he perceives as a culture of secrecy where the Department is not forthcoming with its tactics. It’s doing such a good job at shutting up information that we’re then rushed in here at midnight because the system has sprung a leak, he says.
0:37 – 0.37 – Doherty: None of us know the full implications of this Bill. What we do know is that its powers are wide, and that this is part of a number of steps to ensure that my children and my grandchildren will be repaying the debts of criminals in Anglo.
0:38 – 0.38 – Doherty: Nobody in Sinn Féin objects to liquidating Anglo, but that should mean that the promissory notes are not paid out. Here IBRC defaults, but the State picks up the tab for the promissory notes and everything else.
0:41 – 0.41 – Doherty, amid jeers: The only vote before today on a promissory note was a Sinn Féin motion. There wasn’t even a vote when FF approved the issuing in the first place. It was Sinn Féin that put this issue on the agenda.
0:41 – 0.41 – The Ceann Comhairle says he’ll kick out the next person who interrupts a speaker. Nicely, they’ll get the choice of which door to take.
0:43 – 0.43 – Doherty: This house and every TD in it, and the public at home, deserves to know what’s going on. We’re told powers will be devolved, that the ECB would agree… but Noonan still hasn’t explained whether this will mean an easier Budget next year.
Last week we asked the Troika about banking debts and whether not repaying the promissory note would help the Budget for 2014. The Troika said this would be considered a windfall and would go towards repaying bailout loans.
Doherty asks Noonan: Do you expect our children, and our children’s children, to pay back the debts of IBRC? This legislation is a precursor to having further generations of children take on debt that is not theirs.
0:46 – 0.46 – Shane Ross:
This is close to a fiasco. To leak a piece of information, as Deputy Doherty said, which was kept so confidential for so long, leaves us so vulnerable, that one wonders what’s going to be in the next part of it. The cabinet only signed off on this three quarters of an hour before we were briefed on it this evening. We were briefed for about 10 minutes. The civil servants who briefed us were efficient and well-meaning, but they certainly couldn’t answer some of our key questions.
0:48 – 0.48 – Shane Ross says he’d also like to know how the State’s finances could be threatened by this leak, if the legislation isn’t sorted by the morning. “Is the real element the fear that once liquidation was leaked, there’d be people and parties in court in the morning attempting to frustrate it?”
We cannot vote for this if we don’t know the other part of the package. That is the problem with this bill. We are being asked in isolation to approve the liquidation of the bank, which we might approve of, when we don’t know the other part of the package tomorrow.
He takes issue with Section 17, which he points out gives the Minister the power to become a bank.
0:50 – 0.50 – The Technical Group are sharing time between four TDs, so here’s Richard Boyd Barrett, saying Fianna Fáil bankrupted the country with a similar sort of late-night legislative programme.
0:51 – 0.51 – RBB: “Pinning Anglo’s gambling debts permanently, securely, legally to the backs of the Irish people” is something that nobody should support. This is the single action that pins the debts to our back because it’ll be us and not the bank that will owe the money.
It’s no coincidence that this is being rammed through the week before a major trade union rally around the country, he concludes.
0:52 – 0.52 – Now, here’s Joe Higgins:
This is a chaotic and grotesque way to run a State, by any standards.
He says the chaos of the Dáil is nicely poetic of the chaos of the “fiasco of high finance” which caused Ireland’s issues in the first place.
0:55 – 0.55 – Higgins: “The poor and unemployed shall be bled through austerity to meet the bad gambling debts of the financial system.” It’s time for the public to rise up and demand a democratically owned financial system.
As gaeilge, he says it’s shameful that 800 people will now be dependant on a business decision from NAMA to remain in employment tomorrow. We must destroy this broken system.
0:56 – 0.56 – Stephen Donnelly: As the Father of the Dáil, Enda Kenny knows it’s the constitutional obligation of the Dáil to hold the cabinet to account. This legislation has impacts for decades to come, and nobody’s had time to go through it. Is that keeping the cabinet to account? If we approve the Bill tonight we will have failed our obligation, he says.
0:59 – 0.59 – Donnelly: I have no objection to protecting state assets in IBRC, but this does more: it means we now owe the money to the ECB, moving money from criminal and dead banks to the ECB which cannot ever write it down ever again.
Appropriation of public money is the gift of the Dáil, and not the cabinet: it’s entirely possible that this legislation could mean the Constitution is being breached. It is a fundamental erosion about parliamentary democracy.
1:00 – 1.00 – Joanna Tuffy is sitting in the chair, and calls the Taoiseach: Fine Gael committed to replacing emergency promissory note lending with longer-term, more affordable financing, to stimulate investor confidence. The promissory notes represent a “highly onerous and unfair legacy” of the banking crisis, he says.
Irish taxpayers are due to pay €3.1bn next March, and every March until 2023, to cover Anglo’s losses. Including interest costs, the lifetime costs would be almost €48 billion. It’s an enormous burden for Irish taxpayers to bear.
1:01 – 1.01 – Kenny: We’ll replace the promissory notes with a cheaper, longer-term instrument. A key element of doing this is the liquidation of IBRC, which itself is the wind-down vehicle for Anglo and Irish Nationwide. This Bill was approved by the Government this evening as a first step in a final comprehensive restructuring of the obligations placed on the Irish taxpayer.
The liquidation is necessary to secure the billions worth of IBRC assets owned by the Irish taxpayer.
1:02 – 1.02 – Kenny: The disappearance of the former Anglo and Irish Nationwide is long overdue. Both were synonymous with reckless management and poor regulation, emblems of a culture of cronyism that undermined confidence in the economy and the political system. They were a stain on our international reputation, and a dent on our national pride.
1:05 – 1.05 – Kenny: When the crisis broke, huge losses were realised not only in those two banks, but elsewhere. The policy of socialising the costs of private failure became a condition of the 2010 bailout programme, required by Brussels and Frankfurt where there was a fear that an Irish failure would unleash panic in Europe. Bond market financing for banks shut down anyway.
The belated recognition that this policy was an expensive failure came too late for this country and for our people. The bailout of bank creditors costs a “truly astonishing” €64 billion, or €35,000 for every single household in the country – over ten times the cost of a rescue anywhere else in Europe.
1:06 – 1.06 – Kenny: IBRC cost us €35 billion, a “shocking extent” – almost €20,000 per household. It has weighed on struggling Irish families across the country.
Not all our public finance problems relate to the banks, but the suffering of the public has been made far worse by saving Anglo and Irish Nationwide. If not for the banks, Irish public debt levels would be below those of Germany.
1:08 – 1.08 – Kenny: Last June, EU leaders resolved to split the vicious circle of banking and sovereign debts. Eurozone leaders have publicly recognised the unique circumstances behind Ireland’s crisis; we now need to see concrete steps to give effect to that commitment.
The ECB is the first of the European institutions to show its commitment to getting Ireland back to the markets. I believe restructuring the promissory notes will lead to a significant reduction in our funding requirements, boosting investor confidence and economic recovery.
1:10 – 1.10 – Kenny: I believe that today’s agreement is a significant milestone: it closes a sad and tragic chapter in our history. We are now a poorer but perhaps a wiser people.
Let there be no doubt that this decision is not a silver bullet.
1:11 – 1.11 – Eamon Gilmore: By dissolving IBRC, we are doing what should have been done on the night of the bank guarantee. We should have wound up Anglo and Irish Nationwide that very night. The last government was forced to seek international help because it didn’t do so.
1:12 – 1.12 – Gilmore: We are continuing our negotiations with the European institutions on other aspects of this package, including the bad promissory note deal that killed us to begin with.
There were those who said that the negotiation couldn’t be done – and those who said we’d fail in those negotiations. There were those who predicted failure at every twist and turn – and there are some with difficulty saying Ireland is succeeding.
1:13 – 1.13 – Gilmore: This week rumours began to circulate about the future of IBRC, which constituted a potential financial risk. Today those risks had become too great to sustain, and in line with a contingency plan that has been in place for several months, we are tonight liquidating it. This is necessary to secure the value of the assets that it holds.
1:14 – 1.14 – Gilmore: This is an anxious time for the staff of IBRC. All will acknowledge that no blame lies with them. Many have worked only in recent times and have worked to secure its assets in the public interests. It is intended that the majority of those staff will be employed by the liquidator, at least for some time.
1:16 – 1.16 – Gilmore: The legacy of so-called ‘tail risk’ is important to address to ensure that Ireland gets out of the bailout programme. By getting rid of these “notorious” institutions, the markets will have a better idea of the risk associated with investing in Ireland.
1:17 – 1.17 – Gilmore: The Irish people have endured great loss at the hands of the bankers. The measures to save the banks were wrong. Since coming to office, we’ve worked with the Troika and Europe to redesign the programme bit by bit. Tonight we take another important step.
There is no one step that will right all the wrongs, no fairytale solution to bring us where we ought to be. What we are doing is patiently negotiating as we need.
1:18 – 1.18 – Gilmore: The significance of liquidating Anglo will not be lost on the Irish people. This is another step forward to a day we can face forward as a people, when the past recedes and when Ireland can see the future it truly deserves.
I’m very disappointed by contributions from some members of the opposition. Michael McGrath didn’t mention Fianna Fáil’s role in this crisis; others who had called for the winding up of IBRC are now critical when we do so.
1:20 – 1.20 – Gilmore: On the very night we introduce legislation to wind up Anglo, the only thing we hear is a scramble to find an argument to oppose it. The arguments were bizarre, ridiculous and bear no examination by anyone who wants to see a serious debate on them.
1:21 – 1.21 – FF leader Micheál Martin: The Taoiseach should have called the leaders in this evening to brief them on what was unfolding. Likewise, Minister Noonan. It’s unfair that opposition members haven’t a chance to table amendments to this vital Bill.
1:23 – 1.23 – Martin: I commend Michael Noonan for making a matter-of-fact speech in the context of the bill, avoiding the grandstanding that the Taoiseach and Tánaiste went for. There are many on the government benches who got there by looking for a political angle.
1:24 – 1.24 – Martin: Even when circumstances are exceptional, and the government has the majority to force anything through, it is our duty and responsibility to act accordingly. Everyone supports a deal to lighten the impact of banking debt on Ireland.
1:25 – 1.25 – Martin: It’s not ideal that we’re told this is part of an ECB solution, but we don’t have any detail on it. Indeed, we’re told the ECB negotiations with Governor Honohan are continuing. His skills are considerable, and he’s worked tirelessly to do well. We keep wishing him well in his quest.
1:27 – 1.27 – Martin: When you came into power, there were €36 billion in unguaranteed and unsecured bonds. €16 billion of that has since been paid.
Pat Rabbitte is barracking Martin from the government benches. “I’m saying very calmly what the truth is. You don’t like the truth,” says Martin. “You’re being disorderly.”
1:28 – 1.28 – Martin: The leak of information which caused this emergency tonight should be investigated. It is to be hoped that this does not cause more problems in the search for a deal.
It appears to us in Fianna Fáil that this legislation is a legitimate part in lessening the impact of banking debt on the public finances. We’re told this is not last-minute so the government should be in a position to answer some of our questions.
1:29 – 1.29 – Martin: We have no objection to the wind-up of IBRC and its absorption into NAMA, though I do welcome the Taoiseach’s conversion to NAMA – an institution that the Taoiseach hated in opposition.
1:30 – 1.30 – Sinn Féin’s Pearse Doherty on Twitter:
IBRC – Government is winding up the bank, but not winding up the Debt.
1:31 – 1.31 – Martin: IBRC is still picking up €14bn of debts, so every effort needs to be made to ensure that this continues uninterrupted.
Will the expertise of IBRC’s staff be retained? Will Noonan give an assurance that every single debt owed to IBRC is kept up?
1:33 – 1.33 – Martin: I’d like Michael Noonan to explain the Pauline conversion to the virtues of NAMA on the other side of the house, and why it’s necessary to extend the powers of an institution the government would rather didn’t exist.
And what happens if an ECB is not concluded tomorrow? What are the implications for the government in that case? And what will happen to the national debt?
1:35 – 1.35 – Sinn Féin’s Gerry Adams: The citizens we represent have been listening to media speculation since mid-afternoon, but here we are at 1:30am and we’ve been told nothing about this. The most revealing part of Noonan’s comments came at the end: ‘I would have preferred to be introducing this bill in tandem with an agreement from the European Central Bank’. Why can’t the Dáil be told what these proposals are in the first place?
1:37 – 1.37 – Adams: We’re being presented with legislation in a vacuum. We got the legislation late, and we can’t propose amendments – most TDs can’t even speak on it! After two years of supposedly intense and technical negotiations, we’re being rushed into approving this in two hours.
1:39 – 1.39 – Adams: We have learned to our cost that rushed legislation is bad legislation. What happens if this comes through? Will we see stability and growth? Four months after the supposed October deadline to split sovereign and bank debts, we seem no closer.
1:41 – 1.41 – Adams: This bill turns bad banking debt into sovereign debt. You might be winding up Anglo as an institution, but not its debt. We don’t accept that paying IBRC’s debts – and just extending the repayments – is a good deal for taxpayers. The promissory note should not be paid because it is not our debt to pay.
1:42 – 1.42 – Adams: We don’t know what Ireland’s economic circumstances might be by the time these bonds mature – we can’t leave this debt as a legacy for further generations.
1:43 – 1.43 – Adams: There will be no relief in what this government is doing; there will be no relief in the relentless austerity being pursued simply to bail out bankers: more PRSI, more taxes, fewer classrooms, fewer jobs, fewer Gardaí, fewer nurses. A credible end to all of this will need to bring relief to citizens. There have been six austerity Budgets, taking €26bn out of the economy.
We have long supported closing IBRC, but we can’t accept turning its debt into sovereign debt. Not our debt. Never was.
1:44 – 1.44 – Adams: We’re calling on citizens to protest their opposition to what Labour and Fine Gael are doing.
1:45 – 1.45 – There’ll be five TDs from the technical group speaking for two minutes each. First is Mattie McGrath, who regrets voting for the bank guarantee.
McGrath: You’re here tonight goading the opposition. You voted for the bank guarantee, and yet you turn around and tell us tonight we’re voting for this. This gives far too much power to people who are unelected.
1:47 – 1.47 – McGrath: You’re giving carte blanche to a new type of receiver. NAMA is like a wild animal in the woods, and you’re now feeding it.
The Taoiseach is a “disgrace to your mandate,” he says. “This is a sad day for Ireland. We cannot saddle the Irish people.”
1:48 – 1.48 – Mattie’s not letting up. “Finally you got the liathróidí and stood up to the ECB… this is a farce. Ye can laugh all you like but you voted for the bank guarantee. Now here you are, you’re wearing the clothes of the former Taoiseach.”
1:49 – 1.49 – Mick Wallace: How does this look to the people of Ireland watching tonight? It doesn’t take care of their concerns, but those of the financial markets. Tonight will not bring financial comfort to the Irish people.
1:50 – 1.50 – Luke ‘Ming’ Flanagan: This Bill is nothing but cover to move the promissory notes from this supposed ‘bank’ to the ECB. It will, if ye vote for it, crystallise this as national debt. It will facilitate the situation whereby you will be able to turn something that is not our debt into a long-term mortgage.
We were told by Ruairí Quinn and Brian Hayes that our debt was not sustainable and something needed to be done about it. How much is this going to save? … If our debt was unsustainable before this, how the hell does this make it any more sustainable?
1:52 – 1.52 – Ming: The problem started with joining the Euro. People like Anthony Coughlan said it would end in tears – you set up a Frankenstein currency, with interest rates controlled by Germany, never suited us. Anthony Coughlan was laughed at that day; today what he said has come true. By voting for this, you start the process of putting a debt on our backs and our children’s backs that ye didn’t get a mandate for.
1:54 – 1.54 – Catherine Murphy: I’m trying to visualise how this would be if this debate was held in tandem with a deal that didn’t include a debt write-down. The Minister wanted to do this in tandem with a deal: will he give us a commitment that he’ll bring that finalised agreement for our approval here? Or will Section 17 [which gives him the power to issue new bonds and notes] be a monster that gives immense power to an individual that can act in the absence of any oversight?
1:55 – 1.55 – Murphy: Any deal that does not include a write-down of the debt is not an acceptable deal. it is not our debt. Burden-sharing should not be between us and the generations to come.
1:56 – 1.56 – Thomas Pringle: We learned more from Twitter tonight than the government told us in its contribution. That’s the level that democracy, under your watch, has sunk to. Come out and tell us what the deal is, and what risks make this Bill necessary.
What is certain is that the ECB will get every penny of the promissory notes. The best that we can hope for is that we get a reduction on the 8% interest rate and extend it out for 40 years.
1:56 – 1.56 – Pringle: The Taoiseach said this deal was ending a “dark chapter in our history”. What deal? Did the Taoiseach get your speeches mixed up?
1:57 – 1.57 – Here’s Michael Noonan to reply to the opposition contributions. He thanks everyone who contributed.
Did you ever hear of a liquidation that was announced one day, but not carried out for several days or weeks? If that isn’t done, creditors will line up to strip the company of everything they can lay their hands on.
1:59 – 1.59 – Noonan: IBRC’s assets are worth between €12bn and €14bn; as soon as credible information was circulated by international agencies this afternoon, and when we weren’t in a position to deny it, we had to act. Of course we couldn’t deny it, it’s quite obviously from the legislation it wasn’t prepared this afternoon. We had to move.
1:59 – 1.59 – Noonan: I would suggest that anyone with fears not concentrate about the detail, and look at the purpose of the Bill. The purpose of the Bill is to put a special liquidator, with special powers, into IBRC first thing tomorrow morning when the President signs it, so that €14 billion in assets are protected. I would ask deputies of the house to give us the power to protect those assets.
2:00 – 2.00 – Noonan: We can easily commit to debating any promissory notes deal in the house. That’s no problem.
Has this been constitutionally proofed? Most deputies know that when a stamped copy has been provided by the attorney-general, we know it’s been constitutionally proofed. Otherwise we could not bring it into the house, so ipso factum, it’s proofed.
2:01 – 2.01 – Noonan: A number of people have issue with Section 17. Those powers have always existed, and merely delegated to the NTMA – this is how Ireland issues bonds and securities in the first place. The Acts of 2009 to nationalise Anglo had a similar power. It’s part of Irish law already.
2:03 – 2.03 – Noonan: Why would we have to ask now? I think we’ve dealt with that. I don’t think anyone would stand over a situation that we should have let that situation develop, where the assets of the bank would be impaired in the way described. The opposition would be rightfully very critical of any government that would allow that to happen.
There’s power under the Act for the minister to direct a liquidator. The same person from KPMG who has already secured the property today will be the special liquidator; I will lay a copy of the instructions for them into the Oireachtas library to be accessible to all.
2:04 – 2.04 – Noonan: Regarding the future of IBRC staff: There’s another set of IBRC staff who have the skills to cover a de-leveraging (wind-down) of the bank; I can’t give any more comfort than that. The majority of the “very skilled” IBRC staff will be re-employed for a considerable period.
2:06 – 2.06 – Noonan: The liquidator’s premises in Dublin, London and New York have all been secured by the creditor. We’d prefer to be doing all of this together; we can’t give notice of a liquidation, or not deny it, and then stand back.
2:06 – 2.06 – And so we head to a vote – and the Dail bells will ring for a few moments to allow absent TDs to enter the chamber ahead of the vote.
2:14 – 2.14 – We’re pulling together a voting chart, by the way, so we’ll have a list of who voted – and how – on second stage as soon as we can manage it.
2:18 – 2.18 – The Dail has voted by 113 votes to 36 to approve the Bill at Second Stage.
Officially we now move to ‘committee stage’, where amendments are voted on; of course, this being an emergency, there hasn’t been time to propose any.
2:27 – 2.27 – There’s now some general procedural chatter in the Dáil, before members get to debating ‘Section 1′ – which is the actual title of the Bill, allowing for a slightly less rigid Q-and-A on the Bill. Members want to know what happens to IBRC staff tomorrow – do they show up for work? What is the basis for a ministerial guarantee of NAMA’s new debts?
Richard Boyd Barrett particularly wants to establish whether the workers being laid off enjoy the same statutory redundancy entitlements as anyone else who loses a job.
2:28 – 2.28 – Mattie McGrath wants to amend the legislation so that any existing court cases against IBRC can continue in court and don’t need anyone else’s approval to do so.
2:31 – 2.31 – Michael Noonan responds to the questions from various TDs. Pearse Doherty’s question about a ‘security’ that the Minister for Finance can issue – Noonan says this is already defined.
As to the ‘risks’ posed by not bringing this legislation in right now? Again, Noonan says, you can’t tell someone that a company will go into liquidation and then give them the chance to go to court and immediately frustrate that process. IBRC’s assets are at risk if this legislation is not in place by the morning.
He says we all share the concerns about the future of the staff but is confident that the skills of IBRC’s workforce are valuable enough to warrant being taken on by either NAMA, who will take over most of IBRC’s assets, or by the liquidator.
2:32 – 2.32 – Noonan tells Mattie McGrath that he understands his fear about ongoing legal cases, but ensures him that any legal cases currently being processed are assured of the security of the courts system. Nobody currently in a court case need worry about the effect of this case.
2:35 – 2.35 – Pearse Doherty wants to call up a question about the “existing ministerial guarantee” that the Bill discusses when it says that NAMA’s shortfall will be covered if it can’t get a fair value for IBRC’s assets.
Stephen Donnelly wants a straightforward statement that the proposed ECB deal would mean that the equivalent to promissory notes debts are owed to the ECB instead. Further, can he indicate just how soon an ECB deal might be finalised?
John Halligan wants an affirmation from Noonan that this deal means there cannot be a write-down on Ireland’s currently outstanding promissory notes.
2:38 – 2.38 – Richard Boyd Barrett similarly wants an assurance that this deal means we’ll be repaying the full amount of the promissory notes – and specifically, whether an agreement to repay every cent of it is a condition of extending the timeframe for repaying it in the first place.
Michael Noonan, in response, goes to RBB first: “It’s a bit late at night for conspiracy theories.”
Noonan to Doherty: Ministerial guarantees offered by Brian Lenihan are not supported by emails, so it doesn’t arise in this issue. There were letters, fully formed letters, exchanged. In so far as there is a ministerial guarantee, they are in letters from the previous finance minister. A guarantee is a guarantee… we intend to honour guarantees. But they are not the primary issue here.
2:40 – 2.40 – Noonan summarises the Bill for Donnelly by saying it creates NAMA as a “purchaser of last resort” for IBRC’s assets. On the timescale for the ECB, “there isn’t any deal one”. He says, however, that he may be in a position to answer many of the questions tomorrow.
If a deal had been done today, the first element would be what we are having done tonight.
He says the orderly transfer of liquidating IBRC in an orderly way would always have been the first step in a deal.
2:44 – 2.44 – And so we proceed to our final vote – with John Halligan angry that his question on a write-down wasn’t answered before the final vote was called.
This next vote encompasses committee stage, report stage and final stage all at once – meaning it’s the Dáil’s final vote on passing this Bill. Assuming it’s passed, it’ll go straight across the corridor to the Seanad.
2:46 – 2.46 – Labour rebel TD Patrick Nulty on Twitter:
deeply undemocratic process in the dail tonight. absolutely no intention of voting for this new blank cheque. #anglonotourdebt
2:52 – 2.52 – Throughout the night we’ve been running a poll on whether you support the government’s plan to convert promissory notes into a long-term government bond, if it means that it’ll become part of national debt and kicked down the road for a few decades.
Nearly 3,500 of you have voted so far – and of those of you who did, 48% of you said No, and 36% said you weren’t sure. Only 15 per cent supported the idea.
2:53 – 2.53 – Here comes the vote…
2:55 – 2.55 – APPROVED. 113 votes to 35. The Bill will be sent to the Seanad (providing nobody calls a walk-through vote to repeat this whole caper…)
2:56 – 2.56 – No, no such caper. The Dáil is adjourned until 1pm tomorrow, and the Bill moves to the Seanad.
3:16 – 3.16 – Well, after a bit of a tech hiccup, it seems like the end of the Dáil proceedings seems like a sensible time to bring the liveblog to a close. While we were away, we updated the Dáil voting chart to reflect how TDs divided in the final vote.
We’ll leave the stream running above so you can watch proceedings from the Seanad, but for now, that’s the end of our text commentary. Thank you all for your comments and company on this hectic night.