How to get cash out of a mattress — bring back national loans

WHATEVER happened to the nation’s tried and trusted friend — the national loan — as a means of providing funds for infrastructural development while at the same time creating a secure investment opportunity bearing a reasonable return to subscribers?

The concept seems, like the hole in the ozone layer of some years back, to have got lost by the media wayside — or could it be that ‘wiser counsels’ prevailed, possibly the purveyors of financial ‘services’ that the nation is now expected to rescue from the dregs of mismanagement, or worse, perpetrated under the unsuspecting nose of the financial regulator?

Many of us suckers are still smarting at having had to cough up a bank levy to cover the deplorable, if not criminal, mismanagement by one of our major banks in the not-too-distant past and now we are asked to stand idly by while Anglo Irish Bank revel in its good fortune at not having to go under.

Now that the reality of economic depression is finally becoming the language of the street, the optimists among us are aware that, unlike previous such horrific events, there is a substantial post-Celtic Tiger untapped reservoir of cash savings potentially at the disposal of the nation to help fund the massive shortfall we are otherwise going to have to procure through the very institutions that have created the mess in the first place.

That mechanism sported the curious name of the national loan which, in far worse times, enabled the nation to struggle to its feet on the back of such as the ESB, Comhlucht Siúcre Éireann (the latter sadly, like Telecom Eireann, handed on a plate to private enterprise in due course) and Bord na Mona — not to mention the late departed Aer Lingus. Rather than throw more good money after bad, while at the same time not allowing hard-earned individual (and even corporate) savings to remain out of reach of a nation in crisis, should we not at least consider launching a structured series of national loans attractive to small savers (eg, less than €100,000) in terms of payback, return on investment and tax freedom, with roll-over options for investors currently and, for a long time to come, justifiably reticent about any further dealings through the now-suspect financial services sector?

The National Treasury Management Agency (NTMA) is the obvious vehicle to raise funds from this native source and apply them to selected projects in such areas as:

1. Green initiatives — grants for solar/geothermal installations.

2. Local capital investment programmes — schools, one-stop, first-stage medicare units, local enterprise centres, recreational facilities

3. Funding Government investment in the banking system — ringfenced for productive reinvestment.

This should be in addition to existing NTMS projects such as on-the-run bonds through bond auctions and aimed specifically at people who have money for which they are getting little or no return — much of it under the mattress or, at best, in local credit union accounts.

Patrick Ronayne

‘Drakes View’

Crosshaven

Co Cork