Mr. Diarmuid O'Flynn:

On behalf of the Ballyhea Says Know group, I thank the committee for this opportunity. We have had many significant days since this began. This is probably the most significant one because it allows us to ask the committee directly to finish what we have started and to at least challenge the ECB on the injustice that has been done to Ireland and on the injustice that is still being inflicted on us. I also pay tribute to the work of Fiona Fitzpatrick in securing this date for us. Unfortunately, due to circumstances beyond her control, she cannot be with us.

There has been much coverage in the past few weeks of Anglo Irish Bank and events in the build-up to the banking crisis in Ireland. There has been no coverage of the ongoing consequences of those events. I am not only speaking about the billions in interest we will pay every year for many decades on the loans taken out to repair that damage; I am speaking about the promissory notes and Anglo Irish Bank debt legacy - €500 million destroyed by our Central Bank in 2014; €2 billion in 2015, €3 billion in 2016; €4 billion in 2017; and the €1 billion that we know of destroyed so far this year. That is €10.5 billion destroyed by the Central Bank of Ireland since 2014 and a further €3 billion in both 2011 and 2012, which is €16.5 billion in total, with another €14.5 billion still to go, giving €31 billion in all.

Ballyhea Says Know began in March 2011 simply as a protest against this socialisation of private bank debt, that is, the massive bill presented to the people for the greed and excesses of so many in the private financial sector. We realised quickly we were going to get nowhere simply through protest so we morphed into a campaign group. We went to Brussels three times and met senior officials from all three major EU institutions - the Commission, the Council and the Parliament. We went to Frankfurt to the ECB headquarters and presented a petition to a meeting of the governing council. We nailed our list of protests to the door in the manner of Martin Luther more than 300 years earlier. We sat down and spoke directly to senior ECB officials in Dublin, met the Governor of the Irish Central Bank on three separate occasions and had a Private Members' motion introduced in the Dáil. All this was backboned by a weekly march in Ballyhea and Charleville, joined by others in Ratoath, Dublin, Tralee, and Clonmel.

Through all those actions, we learned two outstanding lessons. First, there is a willingness on the part of the institutions to engage with Ireland on this issue. Second, willing as we are, that engagement will not be with the Ballyhea Says Know campaign. It has to be at official level, which is principally why we are here today. We ask the Oireachtas to set up a cross-party committee and to take this fight to Europe on behalf of the Irish people. It will be a fight; we are under no illusions on that score.

I refer to the background to the crisis. A currency requires many fundamental structural elements to enable it to withstand the shocks it will inevitably face. When the euro was being designed in the 1990s and as politics took over from monetary common sense, member states understandably point blank refused to make the kind of sovereignty concessions such a common currency requires. One by one, many of the critical supports were removed to such an extent that when the inevitable shocks came the currency inevitably collapsed. This is not coming just from the Ballyhea Says Know campaign; this comes directly from those who were up close and personal to the euro design.

In the early 1990s, Bernard Connolly was head of the European Commission unit responsible for the European monetary system and protecting the euro. In his book "The Rotten Heart of Europe: The Dirty War for Europe's Money", published in 1995, Connolly warned at length of the potential consequences of what was happening. For his pains he lost his job. Though his professional credentials and expertise in the area cannot be questioned - he now operates successfully in New York - it has been argued that Connolly is a sceptic and that it colours his views. No such accusation could be levelled at Paul De Grauwe. Highly respected and often used by the European Commission, a professor at the London School of Economics, De Grauwe also warned of the disastrous potential consequences if the euro was launched with those in-built flaws. In an article published in the Financial Timesin 1998 headlined, "The euro and financial crises", he predicted almost to the letter what happened in Spain and Ireland. He said:

Suppose a country, which we arbitrarily call Spain, experiences a boom which is stronger than in the rest of the euro-area. As a result of the boom, output and prices grow faster in Spain than in the other euro-countries. This also leads to a real estate boom and a general asset inflation in Spain. Since the ECB looks at euro-wide data, it cannot do anything to restrain the booming conditions in Spain. In fact the existence of a monetary union is likely to intensify the asset inflation in Spain. Unhindered by exchange risk vast amounts of capital are attracted from the rest of the euro-area. Spanish banks that still dominate the Spanish markets, are pulled into the game and increase their lending. They are driven by the high rates of return produced by ever increasing Spanish asset prices, and by the fact that in a monetary union, they can borrow funds at the same interest rate as banks in Germany, France etc. After the boom comes the bust. Asset prices collapse, creating a crisis in the Spanish banking system.

In 2013, he published a paper entitled, "Design Failures in the Eurozone: Can they be fixed?", and, in 2015, he published "Design failures of the Eurozone". Others such as Milton Friedman in August 1997 and Martin Feldstein in November 1997 argued likewise that the design was fatally flawed from the outset. This is all proof the euro as designed should never have been launched. When it was, all that was predicted by De Grauwe and warned by Connolly happened and Ireland, as we know only too well, was particularly hard hit. Billions of euro poured into the country. Banks, trying to keep up with each other, with Anglo Irish Bank to the fore very early on, lowered their lending standards. Regulators and central bankers lowered their guard. Property prices ballooned until eventually it all exploded.

According to its website, the ECB manages the euro and frames and implements EU economic and monetary policy. Its main aim is to keep prices stable, thereby supporting economic growth and job creation. What was it doing as the various banking crises developed all across the eurozone? What was it doing on keeping prices stable as property prices inflated to ludicrous levels in Ireland especially and in Spain? While regulators and central bankers ignored the kind of major breaches of legislation such as those reported by Jonathan Sugarman here, where was the ECB? It was neither seen nor heard. That all changed after the crash as the ECB suddenly appeared front and centre as the Commission’s enforcer as the troika came to town.

One of the first measures taken to address the banking crisis was the establishment of the emergency liquidity assistance, ELA, funds, the clue for which is in the name. The ECB website states that ELA aims to provide Central Bank money to solvent financial institutions that are facing temporary liquidity problems. The Irish banks did not meet this criteria but came up with a way around it. Using the Asset Covered Securities Act 2001 and the Asset Covered Securities (Amendment) 2007, they applied pre-crash historic valuations to the assets they held on their books. This is in direct conflict with the most fundamental of accounting laws, which require that a true and fair reflection of the state of affairs must be presented. An AccountancyAgearticle in June 2014 said:

The true and fair accounting concept should be used to override compliance with reporting standards in exceptional circumstances, the UK’s reporting watchdog has sa[i]d.

In a statement, the FRC [which is the Financial Reporting Council] reconfirmed that the presentation of a true and fair view remains a fundamental requirement of financial reporting and said that, in the "vast majority" of cases, a true and fair view will be achieved by compliance with accounting standards.

However, where compliance with an accounting standard would result in accounts being so misleading that they would conflict with the objectives of financial statements, the standard should be overridden, the FRC said.

"The requirement to present a true and fair view in financial statements is enshrined in EU and UK law ..." said Stephen Haddrill ... chief executive of the FRC.

Those hugely inflated values hid the true position of the Irish banks in the lead-up to the infamous blanket bank guarantee. They hid that position again when applications were made for funding to the tune of billions of euro from the ELA funds. As we were to finally discover in late 2008, those banks were not suffering temporary liquidity problems. Had the true and fair valuations been used for the property collateral, they were, in fact, insolvent.

The most reckless of all the Irish banks throughout this period was Anglo Irish Bank, a point that was driven home by the publication of the so-called Anglo tapes. The eventual cost to the country is enormous; €35 billion was poured into the bank, €25.5 billion by way of promissory notes and a further €5.5 billion for INBS. They were notes signed by the then Minister for Finance, the late Brian Lenihan, offering a guarantee to the ECB on behalf of the Government if Anglo should fail to repay those billions of euro. Given how Anglo was disguising its true financial situation, those guarantees were offered under false pretences. Given that the ECB, as the central bank of central banks in the eurozone, should have been aware of this misreporting, those guarantees are null and void.

Under enormous pressure from the ECB, however, that is the €31 billion currently being borrowed by the NTMA, given to the Central Bank in exchange for the promissory note bonds, and then destroyed, taken out of circulation. This ongoing obscenity must end or at the very least it must be challenged. That brings me back to the start.

The troika’s intervention in Ireland in 2011 has been presented as a bailout for Ireland. It was not. It was a bailout by Ireland of the eurozone, a bailout in which successive Governments were strong-armed by the EU, with Germany and France in particular abusing their combined political and economic muscle. Including the €5.5 billion from NAMA, we poured a mind-boggling total of €69.7 billion into our banks – a world record of the undesirable kind. Against that we got loans, not gifts, of €67.5 billion from the troika at inflated interest rates.

We are told that Germany is a rock of financial sense. All those interventions by the ECB were not to save Irish banks – it was to save the megabanks in the bigger EU countries. A Bloomberg article from May 2012 quotes a report of the Bank of International Settlements, which outlines how:

German banks had amassed claims of $704 billion on Greece, Ireland, Italy, Portugal and Spain, much more than the German banks’ aggregate capital. In other words, they lent more than they could afford.

When the European Union and the European Central Bank stepped in to bail out the struggling countries, they made it possible for German banks to bring their money home. [That is exactly what has happened]. As a result, they bailed out Germany’s banks as well as the [German] taxpayers who might otherwise have had to support those banks if the loans were not repaid. Unlike much of the aid provided to Greece, the support to Germany’s banks happened automatically, as a function of the currency union’s structure.

They were in over their heads in Wall Street as well. This was exposed by Mr. Michael Lewis in his brilliant book, later a film, which I recommend to everybody, The Big Short.

We accept that when the bank crisis hit, the ECB and everyone else involved faced an emergency situation and took emergency measures to save the eurozone’s banks, some of which meant a very loose interpretation of rules and regulations. We accept also that as a full member of the eurozone from day one, Ireland must share the cost of what happened. What we do not accept is that the banking collapse was Ireland’s own fault, and it was most certainly not the fault of the people. We also do not accept that Ireland’s own bankers acted any worse than bankers elsewhere and certainly were no worse than bankers in Germany.What we will not accept, now or ever, is that we should be forced by the EU, and by the ECB in particular, to bear a disproportionate cost for that banking collapse across the eurozone. That cost has a direct impact on all the current crises being suffered in this country, from homelessness to housing, and to what is happening in our health service and all points in between. We have taken this as far as we can and it has not been easy. Today, we are asking the elected representatives of the Irish people, as a cross-party committee, to step forward, take over this campaign from us and right a wrong that has been done to all of us in this country. Those promissory notes must be challenged.