Thank you, thank you for pointing that out. I am sick to the back teeth of people who should know better (Willie O'Dea, I'm looking at you, and you can put the gun away. You're a short man with an odd accent and nobody is impressed) saying that the ECB are giving us money or lending it to us or digging us out.
We are paying the full rate for short-term floating rate notes (FRNs) as it looks like these bonds will be. The government will pay the banks 1.5% a year (currently) with the banks swapping them at the ECB and paying 1%. The ECB will apply a haircut to the bonds of 0.5% as they are less than a year in duration (being FRNs with a reset of six months as best as anyone can gather, the government haven't actually managed to say anywhere what the bonds are!).
So the sums are:
51.3 bn @ 1.5% - cost to government 769.5 mn/year
51.3 bn @ 0.5% haircut = ECB repo value of 51,043.5 mn
1% of 51,043.5 mn = 510.435 mn/year cost of ECB funding to banks
Profit for the banks = 259.065 mn/year...
So, not only are we taking the banks loans off them at more than market value, but we are paying them for the privilege because we are essentially broke and have to give them an interest bearing IOU.
The ECB is a complete red herring in this. It has been introduced to give a veneer of respectability to the arrangement and to encourage a pro-Lisbon vote.
Now, I am going to vote Yes on friday anyway, but NAMA pushes me so close to the edge... the spin about the ECB even closer. Roll on the european super state. I can't bear to be governed by these idiots any longer. Joe Jacobs come back, send me some cyanide XXXXXXXXXXXXXXXXXXXX this time...