He who pays the piper should call the tune

Some months ago when the troika bailed out Cyprus it was suggested and agreed, among the powers that be, to delve into the accounts of ordinary depositors in the banks to help make up the shortfall in required funds.

Given the reaction of the people of Cyprus and, more importantly, the rejection of the plan by the Cypriot Parliament, the plan was changed.

However, while it was considered ill-advised in the extreme to go after guaranteed savings of less than €100,000, anything above that was considered fair game. It turned out that fair game would appear to be that anywhere between 50% and 60% is being “legally” snatched and confiscated from the accounts of depositors.

While the original plan was seen as a step too far, the latter plan did not get quite the same bad press or raise anything like the same level of objection or public noise. They got away with it in Cyprus given the spin that suggested the money was all dodgy and owned by members of the Russian mafia. However ministers, ours included, assured us Cyprus was a special case and it could not and would not happen anywhere else.

Fast forward a few short weeks then to an article in the Irish Examiner of Apr 13 by Ann Cahill and John Walsh and we find our ministers’ assurances were worth less than nought. The piece advised us that EU finance ministers had agreed, as part of a major step towards creating a banking union, that depositors with over €100,000 in savings will stand to lose their money when a eurozone bank fails.

Not everyone is a member of the Russian mafia with dodgy money he or she wants to hide. There are many reasons why someone might have over €100,000 in a deposit account and they are not all necessarily suspicious or bad.

It’s not hard to visualise that there are folk out there who do not trust the fund managers or the special schemes that seem to cost money and very rarely make anything like the projections on which they are allegedly based.

Equally it’s not surprising that many folk might think that putting money in a savings account to provide for a future pension would be better than contributing to some sort of managed pension fund. Most of us have seen our pension fund battered. Not only that but we have realised the fund managers take out more in fees than they ever put in. It’s a win win for some people.

And if that were not bad enough, government comes along and raids pension funds to pay its own, its sycophants and its minions’ salaries. It’s no surprise now that Pandora’s Box has been opened and the real great rip-off can start. Start with anything above €100,000 and soon enough it’ll be whatever they can get away with.

We should therefore not forget that famous watchword that dates from the late 18th century that states that there should be “no taxation without representation”.

If ordinary depositor holders are to have their hard-earned savings confiscated they need to have a say in the running of the financial institutions concerned.

That will mean a change in company law and it will also mean that a shareholder, any shareholder, should have only one vote. Anything else would amount to allowing the current “institutional cartels” the same vicious grip.

We need to know why and how our savings have been put at risk. It is not acceptable that an unelected unrepresentative institution like the ECB can dictate to a sovereign government that it shall not inform its citizens why they must pay for the failure of Anglo Irish Bank and IBRC.

Lest any of us forget the ECB, EU and euro governments employ the men and women who presided over the banking world as it exploded and imploded. Nor should we forget that other old saying “he who pays the piper calls the tune”.