Three power struggles hurting the nation

IT seems that Ireland is suffering form collateral damage as a result of three power struggles.

Firstly, the one between the governments of Europe and the market. Secondly between the dollar and the euro, and thirdly between governments and trade unions.

Some of the weapons used include irresponsible lending to the banks and encouraging huge bonuses to those bankers willing to lend irresponsibly.

How reliable are ratings agencies? What were their recommendations when the Irish banks were lending recklessly?

The Bank of Ireland was on the road to recovery until last August, having raised the necessary capital through a rights issue.

At this point the ratings agencies stepped in and lowered their ratings, with the result of huge deposits being taken out, €10 billion in fact. What game are these ratings agencies playing?

The bank had to go to the European banks to fill the hole, in fact saving about €27 million in interest payments as they only had to pay 1% and not the deposit rate of 3.75%. Now they are told they must raise a further €2.2 billion. Apparently the object of the bailout is to return the banking system to “international wholesale funding market”. Do we really have to go back to these people? Was not their irresponsible lending to the Banks the cause of our troubles?

Has the ECB not heard of quantative easing? America and Britain used this method to rescue their banks and surprise, surprise, it did not cause inflation, because it simply filled a hole in the banks. The Germans are terrified of this policy after what happened to them after the First World War, but circumstances were different, they had to pay impossible reparations and the money went into general circulation.

The banks have been told they must achieve a loan-to-deposit ratio of 110%. In order to have this ratio they must sell a huge number of valuable properties for practically nothing. In other words, selling their Christmas trees in June.

It must not happen. Nor must the Finance Bill be rushed through the Dáil without adequate debate.

Adrian Cosby

Stradbally

Co Laois