Ireland central bank counterfeited 51 billion Euros out of thin air. The amount is not backed by government bonds. Nor was it a loan from the ECB or anyone else. The money is counterfeit in every sense of the word.



Please consider the facts as depicted in Central Bank steps up its cash support to Irish banks financed by institution printing own money.

The Irish Independent learnt last night that the Central Bank of Ireland is financing €51bn of an emergency loan programme by printing its own money.



The figures also provide the latest evidence that responsibility for funding Ireland's broken banks is being pushed increasingly back on to Irish taxpayers. The loans are recorded by the Irish Central Bank under the heading "other assets".



A spokesman for the ECB said the Irish Central Bank is itself creating the money it is lending to banks, not borrowing cash from the ECB to fund the payments. The ECB spokesman said the Irish Central Bank can create its own funds if it deems it appropriate, as long as the ECB is notified.

Other Assets? What Other Assets?

"Emergency Loans"

Irish banks are running out of collateral they can use to borrow from the European Central Bank, turning instead for emergency support from their own central bank on an unprecedented scale.







The cement mixer which was driven into the gate of Ireland's Parliament Building, in protest at the bailout of Ireland's banks. Photo: AFP



The latest data shows that Anglo Irish Bank and other lenders had borrowed €51bn (£43bn) from the Irish central bank by the end of December, under an obscure progamme listed in the balance sheet as "other assets".



This comes on top of €132bn in loans from the ECB itself, the figure normally tracked by analysts and itself 24pc of all ECB lending.



"This is a horror story: it shows the cataclysmic condition of the Irish banking system," said Tim Congdon from International Monetary Research. "The banks have borrowed €183bn in total, or 110pc of Irish GDP. They have burned through all their capital and a lot of their deposits as well. This is going to end up on the national debt".



The actions of the Irish central bank are authorised by Frankfurt, but fall into a grey area of monetary policy since they appear to involve creation of money outside the normal control of the ECB's governing council.



The use of Ireland's emergency liquidity assistance programme (ELA) raises further questions since the quality of collateral is unacceptable for normal ECB operations. The volume of borrowing has begun to level off after a surge in November.



Separately, the Spanish media reported that a mission from the International Monetary Fund was arriving in Spain this week to analyse the country's debt sustainability and may discuss a `flexible credit line', akin to precautionary overdraft facilities offered to Mexico and Poland.

Grey Area?

Irish Prime Minister Going Down With The Ship

Irish Prime Minister Brian Cowen faces a vote of confidence today by his Fianna Fail party, with one of his most senior ministers seeking to topple him ahead of a general election.



Seventy-one lawmakers will vote at a meeting beginning at 5:30 p.m. in Dublin. Cowen, 51, called for the secret ballot on Jan. 16, saying he expects a “ringing endorsement” even after Foreign Minister Micheal Martin said he’d oppose him.



Support for the party, in power since 1997, has dropped to 14 percent, according to a poll carried out this month. The largest opposition party, Fine Gael, has 35 percent support, according to the poll, carried out by Red C for Paddy Power Plc. The party won 40 percent of the vote in the 2007 election.



Cowen is expected to win the vote, according to odds offered by Paddy Power Plc, Ireland’s largest bookmaker. Cowen is 11-4 on to win the vote.



Victory tomorrow may only be a temporary reprieve for Cowen. Based on the polls, the party may lose more than half its seats in the upcoming election. Environment Minister John Gormley of the Green Party, the junior partner in Cowen’s coalition government, has said March 25 would be a reasonable date for election.