Joe Higgins (Dublin West, Socialist Party)

Today's speech by the Minister for Finance, Deputy Michael Noonan, on the bank reorganisation was highly instructive as to how the Government seeks to judge the effect, successful or otherwise, of its policies. Deputy Noonan said that when the Government published its plan last week it had a number of objectives. They were to restore confidence in the banking system and in the economy, recapitalise and restructure the banks and restore credit to the economy so growth would rebound and jobs could be created. He went on to affirm that all three objectives are being fulfilled. Deputy Noonan relied on the activities and reactions of certain institutions to prove that confidence had been restored. Bank of Ireland shares rocketing was one and the price of Irish bonds being reduced to 10%, which is an incredibly high rate in any case, was another.

He then went on quote some of the rating agencies. He said Standard & Poor's had declared that the outlook is now stable and had removed Ireland from its credit watch. He further quoted the Fitch rating agency saying the stress test was an important step. Furthermore, the Minister quoted the huge investment bank, Morgan Stanley, which is now, apparently, advocating to its clients that they buy Irish debt. This is a sign of the bank's confidence, allegedly, in the Irish economy as a result of an announcement made by the Government on the future of Irish banking.

Who or what are these various agencies? These rating agencies and Morgan Stanley are all institutions that make up the financial markets. These are the same financial markets that plunged the world into a financial and economic crisis only four or five years ago. We should look closer at these institutions and their track records. What is the role of these rating agencies? For example, in the United States sub-prime scam and scandal, which resulted in a worldwide financial crisis, the role of these agencies was to become involved in the process of toxic debts. They assisted and advised on the packaging, repackaging and selling of toxic debts to other institutions around the world and advised the gambling banks, which wished to make a quick buck on these toxic assets, on how they could get good ratings. The rating agencies were far from objective observers or dispassionate judges. They themselves became players in the financial markets. Moody's, for example, made a $1 billion from the debt markets in 2005 and 2006. There is a huge conflict of interest. They, supposedly, sit out there above the maelstrom of the market and give objective assessments of countries and corporations and their financial viability while being involved in advising banks in relation to that and making massive fees as a result. A year ago, participants at the World Economic Forum conference in Rio de Janeiro, had something to say about this situation. The House will know that the World Economic Forum conference is not a gathering of socialists. In fact, the pre-eminent and major corporations and investment bankers, all the players in the financial markets, are the ones who attend. The following is a quote from Jim Goodnight, the founder and chief executive of SAS, a leading business analytic software provider:

The problem we had was the rating agencies like Moody's had been paid by the banks to rate these pieces of paper and the banks let it be known they would shop until they got the right rating.

Lord Levene, the chair of insurance giant Lloyds of London and therefore not a member of the Socialist Party, stated:

Enron was rated Triple A just weeks before it went bust, so why didn't we learn from that and do something? Their business model was strange [speaking of the rating agencies]. If you have a target rated, who pays for the rating? The target [meaning the bank] does. That's a conflict of interest and I'm surprised the G20 didn't deal with that.

The editor of the Canadian National Post magazine then commented:

Perhaps nothing has been done because the same regulators who missed the Enron and tech bubble missed this credit bubble. Perhaps nothing was been done because of the inordinate political and media clout (and co-ownership) enjoyed by credit-rating agencies such as Moody's, Standard and Poor's and others.

In my view, the picture is very clear and yet the Minister for Finance of this State quotes these players, these participants in major gambling enterprises, as witnesses to the sound policy adopted by the Irish Government. Morgan Stanley is also an investment bank that has been up to its neck in the sub-prime crisis crash and scandal in the United States. The Irish Government is prostrating itself in front of these players in the financial markets, in front of greed-driven institutions whose only agenda is the maximisation of corporate profit. The same institutions carry full responsibility for the financial crisis that led to a particularly acute manifestation in Ireland because of the addition of the insane property bubble and crash. What we have is, in fact, a dictatorship of the financial markets who dictate the policy to supposedly democratically elected governments. The markets are international gambling casinos, run by anti-social speculators, who target entire countries, undermining currencies, undermining anything to do with social solidarity, in order to try to make a massive speculative gain. It is in front of these institutions that the Minister for Finance of this State and his Government of Fine Gael and Labour, prostrate themselves in regard to trying to find a solution to the massive crisis in Irish banking and the Irish economy, as a result of the activities of these very speculators and of the financial markets.

The entire economic and political establishment, the Financial Regulator, the Governor of the Central Bank, the chairman of the European Central Bank, Monsieur Trichet and the President of the EU Commission, Mr. Barroso, are all without exception lining themselves up to do the bidding of the financial markets. I spent nearly two years in the European Parliament and I was lectured almost on a weekly basis about the great democratic institutions this represented, so good that they want to spread this model around the world. Yet the leaders of that institution stand up and do the bidding of the financial markets, in other words, unelected, unaccountable, faceless institutions, in search of a maximisation of private profit. Is there any other way to describe that except to call it a dictatorship? The power of these financial markets should be broken on a Europe-wide basis because the working class, not just in Ireland but also in Greece, Portugal, Spain and other countries, are their victims. We should bring these financial institutions and markets into public ownership on a Europe-wide basis and put them under the democratic control of society, of working people, of the real producers in society, of the taxpayers. In that way we can have a publicly owned financial system that is geared to the advancement of society, to social solidarity, to the creation of jobs, to investment in infrastructure and in sound economic development and sustainable and environmentally friendly economic development instead of the casino-type activities which are current.

Tá €24 billiún á chur isteach arís sna bainc sa tír seo. Anois, tá €70 billiún ag teacht as foinsí poiblí, ag teacht ó cháiníocóirí, agus ag dul isteach sna hinstitiúdaí seo. Ní haon ionadh go dúirt Gobharnóir Bhanc Ceannais na hÉireann, an tUas Honohan, gurb é seo an tarrtháil is daoire i stair an domhain. Is iad gnáth-lucht oibre na tíre seo atá ag íoc go daor as. Tá €17.5 billiún as an gciste pinsin, mar shampla, ag dul isteach sna bainc. Ba cheart a chuimhneamh gur airgead é seo ó lucht oibre, cáiníocóirí a oibríonn go crua, atá á réabadh agus á chur i gcontúirt in ionad bheith ann, mar a bhí socraithe, mar ioncam seasta d'oibritheoirí tar éis a saol oibre a chríochnú. Cén fáth? Chun bainc mhóra sa Ghearmáin, sa Fhrainc agus sa Bhreatain a shabháilt ó dhrochfhiacha de bharr na spéacláireachta a bhí ar siúl acu i gcúrsaí tógála sa tír seo in éineacht leis na bainc anseo, le lucht tógála agus le lucht spéacláireachta na tíre seo.

Tá an Banc Ceannais Eorpach, an Seansaláir Merkel na Gearmáine agus an tUachtarán Sarkozy sa Fhrainc ag cosaint na mbanc mór Eorpach seo agus an ag cur an ualaigh ar ghuaillí ghnáth-lucht oibre na tíre seo. Sin toradh tubaisteach pholasaí an Rialtais nua seo ag déanamh an rud ceannann céanna agus a rinne an sean-Rialtas. I gceann dhá nó trí bliana beidh fiacha-----

Is there a problem with time?

See this speech in context