Irish Election - Coverage of Irish Politics, News and Current Affairs

Central Bank board member* David Begg reviews Peader Kirby’s book on the collapse of the Celtic Tiger –

It cannot be gainsaid that the social outcomes were less than were hoped for but the last agreement, Towards 2016, was the closest we have ever come to a social democratic programme in this country. This collapsed in December 2009 and it may be that, like Icarus, we flew too close to the sun in our aspirations.

Social democracy without a social democratic party in government, and in the era when we now recognize that the seeds of a very capitalist crisis were being sown?  But anyway, here’s the text of Towards 2016.  Begg can certainly claim that it doesn’t reflect an emphasis on tax cuts, notwithstanding the many references to “competitiveness”.  Nevertheless, it does read like a document that was written before its real make-or-break element — the size of the the national pay increases — was determined, and it certainly was oblivious to the disaster building up in the financial sector, notwithstanding one reference to the risk of a property crash.  But does it deserve the burden that Begg places on it?

*also general secretary of the ICTU.

Shortly after he was made leader of the Labour Party in 2007, Eamon Gilmore promised to increase his party’s Dail representation to 48 seats or more in the next general election. Refusing to bow to the ‘two and a half party’ political culture, with Labour permanently designated as the half party, he vowed to change the face of Irish politics.

Pundits may have raised their eyebrows and privately scoffed at such delusions of political grandeur, but the surge in support to Labour in recent polls has caused them pause for thought.

Continue reading ‘Eamon Gilmore – Fifty seats well within his grasp?’ »

A little Saturday puzzler.  One likes to believe that the annual report of a financial organisation provides a somewhat comprehensive description of its activities and accounts.  With that in mind, consider the following: Where in the 2009 annual report of the Central Bank of Ireland is there a discussion of its approximately €10 billion loan to Anglo-Irish Bank, a loan which has been subject to the same assurance (“backed by quality assets”) as the guarantee was?

Continue reading ‘Who’s getting Anglo’s €22 billion?’ »

It’s all there in black and white and makes for fascinating reading: http://www.oireachtas.ie/viewdoc.asp?fn=/documents/Committees30thDail/PAC/Reports/document1.htm

No doubt the material will be filleted for gems that support political partisanship of one flavour or another, but for the ordinary concerned citizen, it’s worth skimming through the lot to get a flavour of what was influencing policy decisions at that time. Continue reading ‘The banks were bust – they just didn’t spot it.’ »

Just what is Michael Noonan trying to tell us?

Fine Gael’s new Finance spokesperson is reported to have told a radio station that, in his opinion, ‘New ERA’, FG’s €18bn centre piece programme to revive the Irish economy, will not create the 105,000 new jobs that is its headline promise.

The 105,000 new jobs number may have been the product of some over-enthusiastic PR people, the FG Finance spokesperson said, in the process making his party leader, who trumpeted the 105,000 jobs promise in his Party Conference address last March, look ridiculous. Continue reading ‘Fine Gael’s New ERA – 105,000 new jobs and counting…’ »

From the just released IMF annual surveillance report on Ireland –

The authorities agreed that property taxation would also help broaden the tax base while at the same time making it more stable than the current system of stamp duties. In the transition to a valuation-based tax, a flat tax rate is under consideration.

If you haven’t done the valuation work, then a “flat” tax can only mean some kind of levy per house.  A poll tax done as a house tax.  Is this what the government meant to communicate?

Incidentally, the IMF team also sought to disabuse the government of the notion that NAMA could somehow “time” the property market.  It is too big to time the market.  It is the market.   It will have to start selling some properties, soon.  No doubt there are more nuggets buried in this report.

UPDATE 22 JULY — Irish Times

While neither a property tax nor water charges are likely to be announced in the budget, there remains a possibility that the Government may impose some indirect taxes in the form of a flat-rate household service charge. While politically unpopular, this might be explored.

You read it here first.  The government is thinking about a community charge or poll tax.  Thatcherism how are ya?

It’s worth looking at this Bloomberg News interview with Brian Cowen.  Although Bloomberg was in some ways going along with the hype surrounding Cowen’s visit — “Ireland primes the pump” — the charts flashed during the interview told their own story.  More importantly, the interviewer extracted an acknowledgement from Cowen that AIB will almost certainly need more state equity to be recapitalized: “the other one [AIB] may require some help and we will provide that”.  AIB’s current market value is less than 1 billion euro, a bit of context for whatever multi-billion euro sum is sprung on us between now and the end of the year.   Of course the new EU stress tests, coming later this month, could upset even that calculation.  At least, from the government’s perspective, it’s 12 weeks before the Dail gets to discuss any of this.

In a week when the use of forged documentation in the asylum-system was highlighted with the rejection by the Supreme Court of the appeal of Nigerian asylum-seeker Pamela Izevbekhai against her deportation, FG and Labour are proposing the allow asylum-seekers to work. Despite 13% unemployment and mass-emigration – Alan Shatter and Pat Rabbitte are now arguing for the right of asylum-seekers to employment to be restored.

Mr Shatter said in circumstances where there are 450,000 unemployed people in Ireland providing access to employment for asylum seekers was a difficult issue. But he said condemning people to a situation where they cannot work for four or five years was wrong. He said access to the jobs market should be considered in a way that would be appropriate in the current economic climate. Labour justice spokesman Pat Rabbitte said that incarcerating people in direct provision with nothing to do for years was a disgrace. He said the correct thing to do was to enable quicker decisions to be taken on people’s asylum cases and change the situation with regard to the right to work for asylum seekers.

Continue reading ‘FG-Labour: Let asylum-seekers work’ »

Brian Cowen, today presenting the awards for outstanding achievement in the field of excellence in the Public Service –

It will be a challenge, and equally an opportunity – an opportunity to dramatically accelerate the pace of change in the Public Service, to the benefit of all stakeholders. And an opportunity to ensure that the Public Service continues to contribute to our return to economic prosperity. These are opportunities that we need to embrace with, to borrow from Seamus Heaney, “a compound of energy and artifice”.

 Brian Cowen, giving one of his early-Taoiseach speeches to the Institute for Public Administration conference on “A Public Service for the Future: The OECD Challenge” (remember that?) in May 2008 –

I want the Irish Public Service to be an exemplar of success; ‘fit for purpose’, performance-focused, integrated, and citizen-centred.  Perhaps the most challenging of these attributes is ‘integrated’.  In the words of Séamus Heaney, I believe this will require ‘a compound of energy and artifice’.

 The man sure loves that Seamus Heaney quote.  At least when the topic is transforming the public service.

More seriously, at which speech did he announce that his task force on transforming the public service had hit the ground running so well that it had already had its first meeting?

Both of them.

So again the notion that we lack public representatives with the experience and talent to sort things out and how electoral reform might serve as a means to get us better TDs who could serve in government is raised today by Dr. Ed Walsh in the Irish Times. We’ve been here before of course, indeed I suspect I’ve made annual visits to this topic over the past 4 years and let’s face it many more people have been talking about it for much longer than that.

Continue reading ‘Ed Walsh, electoral reform and the talents of our pols.’ »

July 1st, 2010.  A momentous day for Ireland, and one that will be remembered in history for a long time to come.  Not as momentous as July 7th, 1993 perhaps, but astonishing that we’ve reached this point just 17 years after Mary Robinson signed into law the decriminalisation of homosexuality.

Today, July 1st, 2010, Dáil Éireann will pass the Civil Partnership Bill 2009.  Once it gets through the Seanad (which will happen, though I suspect it’ll get ugly), same-sex couples will be recognised by the state at last.  It’s not marriage, but it’s certainly progress. Continue reading ‘Civil Partnership Bill passing through Dáil Éireann’ »

Wall Street Journal (possibly $ req’d) –

Things are clearly starting to look up,” says Alan McQuaid, chief economist at Bloxham, Ireland’s biggest independent stockbroker. “Assuming the euro-zone debt issue doesn’t turn into a full-blown crisis, Ireland should be roaring back up over the next 12 months, led by a strong export performance.”

So it’s New York Times versus Wall Street Journal, then. Continue reading ‘Fasten your seatbelts’ »

The Department of Finance has issued a somewhat cryptic Friday afternoon statement from the Minister concerning the European Central Bank’s legal opinion on his legislation to create a new Central Bank Commission to consolidate the functions of the McCreevy-Harney two-headed hydra that was our former CBFSAI.  Somewhat tellingly, the statement doesn’t provide a link to the ECB opinion (it’s here) and indicates that it’s no big deal. 

Continue reading ‘ECB puts a kitten among the pigeons’ »

In today’s UK emergency budget, George Osborne announced a new levy on bank liabilities (excluding retail deposits and capital) of 0.04 percent rising to 0.07 percent after a year.  It will raise about £2.5 billion when fully operational.  Today during Leaders Questions when Enda Kenny put Brian Cowen on the spot about the shock new revelation (of something that has been known for months) that the 22 billion to Anglo is, like Christy Mahon, lost surely, Cowen’s answer included –

There is a funding requirement, as things stand, of €22 billion. The options that were available for an immediate liquidation were far in excess of that. In the longer term, in the aftermath of this recapitalisation, we will have to consider the question of obtaining some bank levy support for return of moneys to the taxpayer and the Exchequer.

Question: did he mean to propose, as it sounds like, a €22 billion levy on surviving Irish banks to cover the cost of the Anglo bailout?  The UK levy gives an idea of the scale of what would be involved to make any serious inroads in the 22 billion.  More likely is that Ireland is lining up an an Osborne-size levy, but the spinners have decided to package it as payback time for the Anglo money.

March 2008.  It’s an important period in the Irish banking crisis.  How much space does it get in the Honohan report? 1 paragraph (8.5).  Joan Burton deserves credit on this one.  She’s been pushing for some time now for the government to explain its thinking and actions in March and April.  It comes up again today with Anglo’s internal notes showing that they believed that the back-to-back deposits that they set up in March 2008 had government support.  Incidentally, Anglo’s furrin partners on those deposits included RBS, AIG, and Hypo Real Estate.   A nice “where are they now” list.  Side question: how many of the deposits were run through IFSC operations?   Anyway, while Honohan doesn’t give us a tick-tock of this period, he does tell us that there was a high level Domestic Standing Group already operational and monitoring the situation which had representatives from the Department of Finance.

And now the punchline: when important decisions were being made about the form in which shoring up Anglo should take, and leading to a technique (the back to back deposits) that would later be viewed as misleading, where was the Minister for Finance, Brian Cowen?

He was on an extended St Patrick’s Day official visit, en famille, to Malaysia and Vietnam.

This is odd.  The Irish Times and the Wall Street Journal seem to have gotten the same background briefing on the new framework for financial regulation to be announced  next week, but it was the WSJ that identified the more obvious scoop –

[The Central Bank/Regulator] also will present plans for a new national system for dealing with failing banks, which would mirror the one established in the U.K., a person familiar with the plans said Thursday.

In other words, they’re going to take off the shelf the UK Special Resolution Regime which has been in place for 16 months and had a precursor all the way back to Northern Rock.  Which they could have done a year ago and notwithstanding the way that the blanket guarantee limited the resolution options for Anglo (as Honohan emphasized), we might have more options now than to continue to fork over the Lenihan/Cowen 22 billion to Anglo.

But still.  With a resolution regime on the books, and the European Commission looking out for our best interests on the guarantee, there might still be a way to limit the bleeding.   It doesn’t seem like a promising summer for anyone involved with Irish banks to have long holiday plans.