Government defeats motion to end Central Bank’s facilitation of Israeli bond sales

Independent TDs Gillian Toole and Barry Heneghan have again voted against the Government on a motion to end the Central Bank’s facilitation of the sale of Israeli bonds.

The two TDs, who are Government supporters, two weeks ago also voted with the Opposition on a similar Sinn Féin motion. The Government maintained a healthy margin winning the vote on Wednesday’s motion tabled by the Social Democrats by 85 to 71.

The vote came shortly after politicians heard Israel has raised between €100 million and €130 million from bonds that were approved for trading in European markets by the Central Bank of Ireland.

Gabriel Makhlouf, governor of the Central Bank, said on Wednesday that the Israeli government website marketing its war bonds had stated it sold bonds worth €5 billion.

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Saying that a lot of numbers were being bandied about regarding how many bonds have been sold in European markets, he signalled it was only a small fraction of €5 billion.

The vast majority of the money raised from the issuance of war bonds was raised in the United States, he told the Oireachtas Committee on Finance.

Committee chair Mairéad Farrell responded that €130 million was still a lot of money.

“The fundamental issue is that we do not want any Irish involvement in this,” said Ms Farrell, a Sinn Féin TD.

The meeting examined the bank’s role in approving Israeli bond prospectuses for trading in EU markets. All of the committee members made forceful criticism that the Central Bank was, as Sinn Féin TD Pearse Doherty described it, “facilitating” Israel to sell war bonds that were being used in a genocidal campaign in Gaza.

Mr Mahlouf was accompanied by Mary Elizabeth McMunn, Deputy Governor for Financial Regulation, and Gerry Cross, Director for Capital Markets and Funds.

The Governor and his colleagues said that the bank had no choice but to comply with the European Prospectus Regulation. The officials told the Committee that effectively their hands were tied in that regard.

Mr Mahlouf expressed his horror at “the continued, unconscionable, killing and injury of people, the blocking of humanitarian aid.” However, he said it was not correct to state the Central Bank could refuse to approve the Israeli bond prospectus on the basis of the International Court of Justice (ICJ) findings on its invasion of Gaza.

“It is for international bodies such as the UN or the EU to determine how to respond to breaches or alleged breaches of international law.”

The Irish Central Bank was chosen by Israel to be the home member state that approved its bonds in 2016, soon after Brexit.

In a Dáil debate on the motion calling for an end to the bank’s involvement in bond sales, Social Democrats TD Gary Gannon said the Israeli bonds prospectus advertisement says “’stand with Israel. Israel is at war’. These bonds bankroll the bombs, the starvation, the extermination,” he said.

Minister for Finance Paschal Donohoe insisted the Government “is working relentlessly with partners and with others to affect the type of change that Israel may not be able to ignore”.

He said “our efforts are making a difference, but I accept that they need to deliver more”. Ireland’s approach to the unfolding tragedy is one of “principled conviction, but also a recognition of the realities that we face, that we have to build up a diplomatic coalition to achieve more”.

“We also have to be conscious of laws that are already in place,” he said as he introduced a countermotion to the Social Democrats motion for an end to the bond sales.

The Social Democrats introduced its motion two weeks after Sinn Féin introduced legislation that was voted downs.

Sinn Féin’s Mr Doherty described the Government’s response as “shameful” and said they would be “on the wrong side of history” as “genocide is staring us in the face”.