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Irish “rescue”: 67.5 bn of bail-out loans, 89.5 bn to banks
by Attac Europe
4 January 2014

On December 15, Ireland became the first country to exit the „rescue” program by the troika of EU Commission, European Central Bank (ECB) and International Monetary Fund (IMF). While Europe’s political elites sell Ireland as a success story, Attac looked into the numbers: while Ireland received €67.5 billion in bail-out money since the end of 2010, funds amounting to €89.5 billion were transferred from the country to the financial sector during the same period.
Attac investigation shows: cash flows from Ireland to the financial sector significantly exceed bail-out loans / EU crisis management policy bleeds out people and economy to funnel billions to the banking system

Complete calculations and sources:

The results in detail:

- €18.1 billion were used to directly recapitalize Irish banks.

- €55.8 billion went to creditors of the Irish state. €37.5 billion of these were used to repay maturing government bonds and €18.3 billion to pay interest for outstanding bonds.

- €1.6 billion were spent by the National Asset Management Agency (NAMA), a bad bank guaranteed by the state, to buy bad real estate assets held by Irish banks.

- €14 billion were used so far for the liquidation of Irish Bank Resolution Corporation (IBRC), a merger of two bankrupt nationalized banks. €12.9 billion of these were used by NAMA to buy the remaining IBRC assets. Another €1.1 billion was paid to the bank’s creditors as the result of a government guarantee.

„During its alleged rescue, Ireland put more money into the financial sector than it received in bail-out loans”, Lisa Mittendrein of Attac Austria concludes, „the Irish population paid for that, being squeezed out to keep the European banking sector alive.”

Troika aggravates wrong course of the Irish government

In the run-up to the bail-out programme, the Irish population was burdened with by far the largest national bank bail-out of the entire euro zone. Between 2008 and 2010, €76.5 billion of public funds were moved directly or indirectly to Irish financial institutions [1]. „The Irish government pursued a policy of indefinite bank bail-outs – and the Troika further aggravated this course”, Mittendrein criticizes.

ECB blackmailed Ireland to pay off hedge funds

The influence of the Troika is also visible in details of the Irish crisis management policy: Nationalized Irish banks have to repay all their creditors, even those not covered by the state guarantee. An expertise commissioned by the European Parliament shows that the ECB forced the Irish government to take this step by threatening to withhold emergency funding from Irish banks. This was done even though the full repayment of unguaranteed bonds is not part of the bail-out memorandum and despite the IMF’s advocacy of a haircut for these bondholders. In doing so, the ECB protects largely speculative investors such as hedge funds. They had lent money to Irish banks at high premiums when it was already clear they were on the verge of collapsing or being rescued by the state [2]
. The report concludes that the ECB possibly overstepped its mandate and recommends not to include it in future Troikas. [3] „Through blackmail and coercion, the ECB ensured that after five years of bank bail-outs, speculators are handed another €16 billion of public funds”, Mittendrein says [4].

Financial Who-is-Who among profiteers

The unsecured bondholders’ identity is being kept secret by the political elites. Ex-broker and blogger Paul Staines leaked an incomplete list of the creditors of Anglo Irish, the largest bankrupt Irish bank. It includes large international financial institutions such as Allianz, Barclays, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC and Société Générale. Even subsidiaries of Austrian banks such as Raiffeisen and Erste Bank profited according to Staines’ list [5]. In October 2013, German Finance Minister Wolfgang Schäuble commented on the Irish situation: „Ireland did what it had to do … and now everything is fine.“ [6] Lisa Mittendrein harshly criticizes this attitude: „The only ones who are fine are the European financial elites. It was the Who-is-Who of the banking sector that got rescued, not the Irish people. This is not a success story.

National pension fund plundered

The Irish population is paying for the repeated saving of the financial sector through brutal austerity. Ireland had to co-finance its own “rescue” by €17.5 billion, €10 billion of which were taken from the public pension fund NPRF, originally set up to secure Irish pensions in the future. The fund’s money was used for direct bank recapitalization [7]. In late 2013, the government decided to entirely transform it into an investment fund, safeguarding future pensions is no longer a priority [8]. Furthermore, the population was hit hard by six (?) years of austerity measures: The VAT was increased to 23 percent, child benefits were lowered, unemployment allowances for young people cut in half [9] and tuition fees tripled to 2,500 Euros [10]. Altogether, over €28 billion have been squeezed out of Irish society since 2008 [11].

Highest rate of net emigration in the EU

The social consequences of austerity are disastrous: Almost a third of the population is at risk of poverty or social exclusion [12], one in ten is suffering from hunger [13]. While the disposable income of the poorest decile of the population fell by 26 percent within a year, the top decile’s income rose by 8 percent, which clearly shows the crisis management policy’s social bias [14]. Among the 18- to 24-year-olds, every second person considers leaving the country, while 300,000 people have already emigrated in the last four years [15]. In 2012, Ireland experienced the highest net emigration rate throughout the EU. Just six years before it had seen the continent’s highest net immigration [16].

Government debt continues to rise

Contrary to the alleged success story, the Irish economy has far from recovered: Today’s GDP is 12.6 percent lower than before the crisis [17]. Unemployment, currently at 13 percent, is still more than twice as high as during pre-crisis times. Among the young, 27 percent are unemployed [18]. The banking sector is far from fulfilling its main task, the supply to the real economy with affordable credit: Half of all small and medium-sized enterprises asking for a loan in the last quarter were rejected by banks [19]. The national debt, which had exploded from 25 to 91 percent of GDP between 2007 and 2010 as a result of the bank bail-outs [20], further increased under Troika control and will reach 124 percent in 2013 according to current forecasts [21].

Irish “rescue” in fact a rescue of the rich

„Our results reveal that the main goal of the crisis management policy conducted by the political elites is to save the European financial sector and the underlying fortunes of the richest”, Mittendrein concludes, „in order to achieve that goal, they sacrifice the prosperity of whole societies and accept huge levels of unemployment, poverty and misery.” After €670 billion of direct state aid has been given to European banks since 2008 [22]
, further hundreds of billions are now being funneled to the financial sector via countries like Ireland or Greece. The fact that it’s not the Irish people or state that has been saved, but European financial elites, is confirmed by Andy Storey, sociologist and economist at University College Dublin and activist with Attac Ireland: “The money that European taxpayers lent to Ireland was largely diverted into the repayment of socialized private debt that ordinary members of the public – in Ireland or elsewhere in Europe – should never have taken responsibility for. Illegitimate debt lies at the heart of this crisis.”

Radical change of policy is overdue

A radical change of course is overdue in European crisis management policy. „Our governments must stop spending huge sums of public money to save a financial sector beyond remedy”, Mittendrein demands. On the contrary, strict regulation is needed: Banks considered “too big to fail” have to be split so they can no longer endanger whole societies. In the medium term, the whole banking sector needs to be limited to its core task: managing deposits and loans, while not serving profits, but public welfare. The politics of austerity, aimed at destroying social welfare and health care systems and

threatening hundreds of millions of people in Ireland and Europe with poverty, have to stop. They need to be replaced by public investment programmes and EU-wide coordination of tax and economic policies in the interest of the general population. By means of debt relief and internationally coordinated wealth taxation, creditors and the rich need to share the burdens of the crisis. “The cost of the crisis must be paid by those responsible for it”, Mittendrein says.

Stop the “competitiveness pact”

Right now, however, a further aggravation of the failed policy described above must be prevented. Klaus Regling, CEO of the EFSF and ESM bail-out funds, labeled the Irish exit from the “rescue” programme a „huge success for Ireland and the euro area as a whole” and used it as evidence for the success of the current crisis management policy [23]. The political elites are currently planning to adopt the “competitiveness pact” which would extend the Irish model to the entire EU: All states would have to commit themselves to neoliberal measures such as the reduction of labour protection laws, wage cuts or privatizations. Their implementation is to be guaranteed by contracts between the states and the EU Commission, who would monitor and enforce them through bonus or penalty payments. “The competitiveness pact would mean ‘troika for everyone’”, Lisa Mittendrein concludes, “thanks to broad European protests, its adoption was pushed from December 2013 to June 2014. We have to ultimately stop this pact of impoverishment to initiate a turnaround in European crisis management policy.”


In Austria
Lisa Mittendrein, Board Attac Austria
+43 664 21 21 680

In Ireland:
Andy Storey, Attac Irland, Dozent für Politik und internationale Beziehungen, University College Dublin
+ 353 8765 43 872


(1) EFSF (2013): Frequently Asked Questions,
(2) European Commission (2013): Economic Adjustment Programme for Ireland, Autumn 2013 Review,, p. 39.

(3) National Pensions Reserve Fund Commission (2013): Annual Report and Financial Statements 2012,, p. 30.

(4)NTMA (2013): Annual Report 2012,, , p. 31.

(5) Eurostat (2009) Letter to the Irish Statistical Office, 19 October 2009,

(6) NAMA (2013) : NAMA Bonds,

(7) Standard & Poors (2010): Explaining Standard & Poor’s Adjustments To Ireland’s Public Debt Data,

(8) NAMA (2013): IBRC,

(9)International Monetary Fund (2013): Ireland. Ninth review under the extended arrangement. Ireland Country Report 13/93,, p. 5.

(10) Eurostat (2013): Quarterly non-financial accounts for general government, 19 December 2013,

(11) European Commission (2013): Economic Adjustment Programme for Ireland – Autumn 2013 Review,, p. 66.

(12) NTMA (2011): Annual Report 2010,, p. 19.

(13) Department of Finance (2010): Technical Note on Accounting Treatment of Promissory Notes, 4 November 2010,

(14) Department of Finance (2013): Irish Stability Programme April 2013 Update,, p. 20.

(15) NTMA (2011): Annual Report 2010,, p. 29.

Footnotes :

[2Karl Whelan (2012): The ECB’s Role in Financial Assistance Programmes,, p. 9.

[3Ibd., p. 14.

[4Central Bank of Ireland (2011): Clarification – Senior Debt and Subordinated Debt Issuance by Irish Credit Institutions, 1 April 2011,

[5Guido Fawkes’ Blog (2010): Anglo-Irish Bondholders Should Take the Losses, 15 October 2010,

[6The Irish Times (2013): Schäuble pours cold water over idea of ESM relief for Ireland, 16 October 2013,

[7European Commission (2011): The Economic Adjustment Programme for Ireland,, p. 39.

[8NPRF (2013): Ireland Strategic Investment Fund,

[9Oxfam (2013): The true cost of austerity and inequality. Ireland case study,, p. 23

[10Channel 4 (2013): Irish Students take to the streets to protest against cuts, 1 October 2013,

[11The Economist (2013): Ireland: The eight austerity budget, 19 October 2013,

[12Eurostat (2013): People at risk of poverty or social exclusion by age and sex,

[13Mandate/Unite (2013): Hungry for Action. Mapping Food Poverty in Ireland,, p. 2.

[14Central Statistics Office (2012): Survey on Income and Living Conditions (SILC) 2010,, p. 11.

[15BBC (2013): 300.000 Irish people emigrate in four years, 9 May 2013,

[16The Irish Times (2013): Ireland has highest net emigration level in Europe, 21 November 2013,

[17Eurostat (2013): GDP and main components – Current prices,

[18Eurostat (2013): Unemployment rate by sex and age groups - quarterly average,

[19The Irish Times (2013): Small firms ‚denied bank credit’, 2 December 2013,

[20Eurostat (2013): Government deficit/surplus, debt and associated data,

[21European Commission (2013): Autumn forecast 2013, November 2013,, p. 59.

[22Der Standard (2013): Bankenrettungen kosteten EU-Staaten 670 Milliarden, 22 April 2013,

[23EFSF (2013): EFSF financial assistance for Ireland ends with successful Irish exit, 8 December 2013,

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