The meaty part of the exchange is below the fold, but in essence Lenihan claimed that Labour party proposals on the mixture of the tax increases and spending cuts had been presented by the unions in social partnership discussions over the last two years, and since the unions and Labour are “symbiotically linked”, Labour was thus effectively in social partnership.  Lenihan added the extra dig of mentioning that he could see “Kim Il Sung type pictures” of Eamon Gilmore on Liberty Hall.  Which is a bit of laugh if you consider that had the crash not happened when it did, Liberty Hall would by now be renamed Ahern Hall.

In a separate part of the discussion, Lenihan makes clear his bitterness at the Greens at their November announcement putting a lifespan on the government without actually withdrawing from it.

Deputy Brian Lenihan: …. That said, as a result of Government decisions and budgets adopted in recent years, marginal tax rates have slipped up beyond the 50% level. I have always believed that marginal tax rates should not exceed 50%. I have fought with might and main against it, but did so against a torrent of opposition, especially from the Labour Party and, of course, even more so from Sinn Féin which seems to believe there is a limitless pot of taxation and that taxation can be introduced and extended to 55%, 60%, 65% and 70%.

Senator Alex White:   Nonsense.

Deputy Brian Lenihan:   This was raised with me in social partnership.

Senator Alex White:  Read the manifesto next week and see it.

Deputy Brian Lenihan:  This issue was raised by me with social partners in social partnership negotiations—–

Senator Alex White:   The Minister is making it up now.

Deputy Brian Lenihan:   —–who objected to pay cuts and who turned around and asked why I would not bring in a 65% income tax rate.

Senator Alex White:   Was the Labour Party in social partnership? I do not remember that.

Deputy Brian Lenihan:  These persons are all symbiotically linked.

Senator Alex White:  That must be new. That is new to me, that nobody is invited to social partnership.

Deputy Brian Lenihan:   I have the honour of representing a north-side Dublin constituency and when I pass Liberty Hall I see Kim Il-sung-type pictures of Deputy Gilmore on the building.

Senator Alex White:   It was former Taoiseach, Deputy Bertie Ahern, who invited them all in.

Deputy Brian Lenihan:  Please stop pretending to me that you are not symbiotically linked with all these people.

Senator Alex White:  Do not offend Senator Harris now.

Deputy Brian Lenihan:   I look forward seeing the Labour Party’s manifesto.

Senator Alex White:   The Minister will see it quickly. I wonder has Fianna Fáil one at all and who will write it.

An Cathaoirleach:   Has Senator Alex White a point of order?

Deputy Brian Lenihan:  I have the honour of having written the manifesto for the next four years for this country—–

Senator Alex White:   Agreed.

Deputy Brian Lenihan:  —–and Senator Alex White will depart from it at his peril. That is all I can tell him.

Senator Alex White:   That is classic hubris. That is classic Fianna Fáil narrative.

Deputy Brian Lenihan: There is no question of hubris. There are modifications that can be introduced, but the broad direction of that manifesto in the national recovery plan is that two thirds of the adjustment must take place on the expenditure and one third on the taxation side. Although Fine Gael is maintaining that it can make an even bigger adjustment on the expenditure side, it will find it will be difficult to do that in office. On the other hand, the Labour Party is saying that half of the adjustment must take place on the taxation side and Sinn Féin is maintaining that two thirds of it can be done on the taxation side, which is an impossibility. It is a politically attractive impossibility—–

Senator Alex White: The Minister has increased taxes considerably.

Deputy Brian Lenihan:  —–because it allows them engage in this endless politics of begrudgery—–

Senator Alex White:  We have never had such tax increases as we have had from the Minister.

Deputy Brian Lenihan:   —–that there is someone else who has to pay.

An Cathaoirleach:  The Minister is replying to the points raised. No interruption.

Senator Alex White: The Minister put the taxes up madly.

Deputy Brian Lenihan:   There is always someone else who must pay.

Senator Alex White:  Some €1.5 billion of tax increases.

Deputy Brian Lenihan: It allows Senator Alex White to go to the doorstep and state to the occupant that he or she is a poor man or woman who is being mercilessly treated by the last Government, that his party accepts all that it did and will not change the measures even though the party opposed them, but there is someone else who can pay in the future. There is not—–

Senator Alex White:   Read the document. Read the manifesto.

Deputy Brian Lenihan:   —–and that will not work as an economic policy for this country.

Senator Alex White:  Will Fianna Fáil have a manifesto?

A few quick impressions from the Green news conference.  First, it sounded like they were trying to play nice with Fine Gael, but that might just be the circumstances.  Second, Brian Lenihan now has what looks like a big conflict of interest.  He made it clear in his leadership launch this morning that he wants a long election campaign.  But its timing now depends on the passing of the finance bill, whose details he controls — and he is back in “There is no alternative” mode (a la the guarantee, IMF etc) saying that it has to be done his way.  Hopefully the apolitical permanent staff at the department will be providing dispassionate advice on this.  Finally, there is at least one risk from the still unresolved nature of the next week in politics: that Brian Cowen does a final kick of the hind legs at anyone near him and calls an election immediately.

As earlier posts have noted, he has never had a good sense of separation between the two roles and as Caoimhghín Ó Caoláin pointed out, the critical sentence was delivered as Gaeilge — “a united organisation is the most important thing”. So much for the Country First tone of a week ago.  Also to note at this stage, there is apparently a second bill that the government intends to pass before the election, there was a reference to the “NAMA amendment bill” which is the first I’d heard*.  Finally (for now), the FF leadership battle will pit several of the 7 FF Cabinet members against each other — a Cabinet that is already perilously close to the constitutional limit 7 and challenged in its constitutional requirement to operate as a collective.

Historical footnote: Richard Mulcahy as leader of FG served as Minister for Education in the interparty governments of the late 1940s and 1950s.

A Green Party quote to keep in mind –

A Green Party spokesman said last night that a general election was now only weeks away and the party’s TDs and Senators would consider the Labour motion on Tuesday.  But Green Party sources described the Labour motion as a “stunt” and said if Eamon Gilmore was serious about an immediate election, he would have put down a motion of no confidence in the Taoiseach rather than the Government.

FG have now supplied the former.

*The NAMA amendment bill is in the announced legislative program with a possible typo in its description.

“They’ve changed the arrangements that apply to coalition governments” … Brian Cowen on the Greens just now on Six One.  Apparently there’s an unwritten constitution for such governments.  His tone of lecturing the Greens on how government works is not going to go down well.   He is also mingling his roles of Taoiseach and FF party leader since he is using the latter to justify his attempted Cabinet moves.

UPDATED

Exact quote from Brian Cowen 11 minutes in to the interview

The Fianna Fail party as far as I am concerned as a component in this government has to ensure that we prepare for the next election and that we have our people in the field, the people who will do battle for us

Article 28 Section 4 of the constitution

4.    2° The Government shall meet and act as a collective authority, and shall be collectively responsible for the Departments of State administered by the members of the Government.

It’s very difficult to reconcile Cowen’s view that government functions can be applied for election positioning — and the breakdown in government functioning that it triggered — with the Constitution’s requirement for collective government.

We believe that there is a clear duty on all members of Dáil Éireann to facilitate the passage of these measures in the uniquely serious circumstances in which we find ourselves. The political and financial stability of the State requires no less.

So again ministers who couldn’t have cared less about the Dail in the day-to-day running of the country suddenly want all its members aboard for a budget which they have no hand in creating.  Perhaps if you like parliamentary government, it should be seen as a good news that the days of the country being run through social partnership meetings and quangos have been put to one side.   But is it really the function of the parliamentary opposition to wait every 2 decades until the country is in a real shambles and then be called upon to vote with Fianna Fail for the sake of the country?   If, as periodically comes up for discussion, you take the view that there’s a dearth of talent in Irish politics, it doesn’t help when that’s the basic job description.

FG 31 (-2)
FF24,(nc)
LAB 23 (-4)
SF 10 (+2)
GR 3 (+1)
Oths 9 (+3)

Underlines volatility of Labour vote. Also public satisfaction with Brian Cowen is 19% to 64% dissatisfied and 17% undecided. 29% are more likekly to vote vote FF with Cowen replaced, including 21% of FG and Labour voters. Will FF be forced to turn to SF and Independents to retain power?

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.

I have a long history with this issue, and one I’m particularly proud of.  The Labour Party introduced the Civil Unions Bill in 2006.  In the few months leading up to that, I was a member of the Labour LGBT executive which decided they were in support of such legislation, and I played a small role in bringing LGBT groups in to discuss the draft legislation with the Labour Party legal advisor, and with Brendan Howlin – the sponsor of the Bill.  My role was not enormous – I did not draft the legislation, nor was I centrally involved in persuading Brendan Howlin to work on this area – he took that initiative all by himself.  Nevertheless, it is one of my times in politics that I am most proud of, and it was certainly one of the first times that I became aware that Ireland could be made a better place by the actions of a very small number of people.

It’s been a few years since that flurry of activity.  In the meantime, the Labour Party have reintroduced our bill twice, only for it to be voted down by the Government.  I’ve been involved with both Dublin Pride and the NLGF – both of which have taken staunchly pro-marriage, anti-partnership positions.  And yet, I’ve still waited and waited for this day, conscious of the breakthrough which it will come to represent.

I should probably provide some context for my own views.  Theoretically, academically, I am opposed to the institution of marriage, and indeed to derivatives of that institution such as Civil Partnerships.  It is a patriarchal institution which has been used to subjugate women for hundreds of years.  And regardless of the growth of civil marriage, it remains an institution derived from a sacrament in which I do not believe.  I believe society should seek to move beyond marriage – to dismantle the rights and responsibilities of that institution, and to recognise that increasing numbers of relationships do not fit within the model of the nuclear family.  Some relationships last for a long time, and some do not.  Some relationships consist of two people, and some do not.  Some relationships involve children, and some do not.  And some relationships involve sex, and some do not.  One model will never work for all these different types of relationships, and we should consider how rights and responsibilities could be accumulated within relationships as they evolve, rather than being dependent on one ceremony.  Theoretically, academically, these are my views.

Emotionally however, I sit in a very different space.  As I am yet again experiencing, new romance in my life fills me with emotional possibilities, and the attractions of monogamous, long-term relationships begin to appeal to me once more.  But as well as hope such as this, it angers me that society views the relationships of my friends as less than the relationship of my parents.  I want queers who want to marry to be allowed to marry.  And beyond that, I want them to feel safe walking down the street holding hands.  Or to raise their children without judgement.

And so I’m conflicted.  I want to make the radical argument against the institution of marriage.  But I want the loving relationships I see all around me to receive the respect they deserve.  And that can only happen when society embraces empowering structural change.

Tonight will see our society, through the democratically elected representatives of the people, embrace exactly that type of structural change.  If Fine Gael come onside, it is possible that as in 1993, all members of Dáil Éireann will come together to take a stand for progress.  The Green Party deserve enormous credit.  Enormous credit.  As the Labour Party were responsible for pushing Máire Geoghegan-Quinn to decrimilaise homosexuality, so the Green Party have taken this fight and forced Fianna Fáil to accept it.  Their role should not be undermined, and it will certainly not be forgotten.

In six months time, same-sex couples will be having Civil Partnership ceremonies to rival the most gaudy wedding.  Their engagements will become commonplace in the Irish Times.  And most of all, society will have shifted to recognising same-sex relationships instead of ignoring them.  The campaign for access to civil marriage for same-sex couples will continue, and that’s a good thing.  The campaign for same-sex couples to be treated equally in relationship to adoption will certainly gather pace.  And some of us will continue to make our arguments for a different way of recognising love.  But we’ll all be doing it from a better, more equal starting point.

That’s progress, and it’s been a privilege playing a tiny part in it.

A number of sources within the Greens confirmed that discussions had taken place within the party on rotating ministries. One said that such rotation had happened with Greens in government elsewhere, particularly in Germany, to underline the party philosophy that no individual should be placed above policy.

“We’ve discussed it in general but not the who, what or the when,” said the source, who added that circumstances had since changed.

Other sources confirmed that the party reached what amounted to a strong agreement two years ago on rotation and the matter had come up during the most recent parliamentary party think-in in mid-January.

Dan Boyle was tweeting about it earlier:

@Connie_Zevon Look it’s speculation. As leader John decides when or if he is to leave cabinet. Could be tomorrow, could be 2 years time.

It would certainly be no harm for Ciaran Cuffe (and blogging politicians) were the move to take place – with a reduction in seats in Dun Laoghaire from five to four Cuffe would need every single advantage to be in with a shout of keeping a Green Party seat.

Gormley would be in a position, according to the Examiner, to take up a ‘super-junior’ ministry like the one being mooted as part of the reform of Finance to take on certain reponsibilities like Public Sector reform and assist Brian Lenihan with other work (or the ‘Department of Administrative Affairs‘ as it was dubbed by John Drennan at the weekend).

The question isn’t simply whether it is good for Ciaran Cuffe however, the question is more correctly, is it good for the Greens? I think it is wrong headed to bask in the demise of the party, any healthy political system needs a clash of perspecitves, one that can be all too absent in the dialogue between the three established parties. Whatever about their decision to take power, their presence in the Irish political system is, like that of the now-dead Progressive Democrats, a sign of health and vigour.

The capacity of the party to sustain itself in office has been tested by their time with Fianna Fail. Criticisms made by Deirdre de Burca stung because they chimed with what was being said on the doorsteps. Like the departed PDs found out, being the smaller party in coalition with Fianna Fail means tough decisions, lots of flak and being put front and centre when the mud is being thrown.

There isn’t much doubting the Greens wanted the challenge of power, their is some traction to the argument that they went ‘native’ at times in their dealings with Fianna Fail. Whether this is down to Gormley (as some members believe) or simple a function of being a party with two ministers, is a matter of conjecture.

The stepping aside of Gormley into a different role and allowing Cuffe to take the Ministerial seat helps to show that the leadership does stick to its promises. A vital part of the Green philosophy is internal democracy and integrity in decisions made, which would mean reneging on a deal by Gormley now could further undermine confidence (internally and externally) in the Green’s professed philosophy. The grestest risk of all for the Greens, one that looms large over them, is that the public see them as a bunch of charlatans who cast down the principal for power. There are plenty of voters out there who see it that way already, the Greens need to ensure that those who voted for them last time don’t see it that way at the next election.

To that end perhaps fulfilling the undertaking – if it was indeed given – might not be the worst thing for the Green Party.

De Burca has released a copy of an e mail (see below) that she claims she sent to Minister Gormley and Party Chairman Dan Boyle in August 2009 outlining a range of public concerns about the Dublin Docklands Development Authority.

“This e mail was sent to John Gormley’s private e mail address to ensure that it received his immediate and personal attention” says de Burca. “I had a brief verbal discussion with him about the issue and he encouraged me to send the e mail to his private e mail address. I had several further discussions with the Minister about the DDDA issue over subsequent months”.

The full e-mail is below the fold. I have removed Dan and John’s personal emails from my pasting below but they remain on Deirdre’s own site.

The Green Party had their response out on Twitter earlier.

Forwarding an anti-Nama email rant with a 33 word comment is hardly a smoking gun. @lexia @damienmulley @ChristineBohan @electionie

COPY OF EMAIL SENT BY FORMER SENATOR DEIRDRE DE BURCA TO MINISTER JOHN GORMLEY IN AUGUST 2009

To: Dan Boyle Personal Email
CC: John Gormely Personal Email
Subject: Fw: I believe that these are valid questions and deserve public discussion and definite answers.
From: deirdre.deburca@oireachtas.ie
Date: Wed, 12 Aug 2009 20:57:45 +0100

Dan and John,
As well as the many other e mails I have received pleading with me not to support NAMA, I also received the one below. It is particularly relevant to John and his Dept.

Regards
Deirdre

Subject: RE: I believe that these are valid questions and deserve public discussion and definite answers.

“Current market price” is the nub of the question. Who sets this and what method do they use to set the valuation? Re the “who”, government, banks, developers and auctioneers all have a vested interest.

The key issue here from the economy’s perspective is to pay a fair price as otherwise we take on more debt than is needed which will divert resources from the productive part of the economy.

An example to put John Gormley on the spot relates to the DDDA (Dublin Docklands Development Authority) which falls within his ministerial remit.

Why has the DDDA been unable to publish its 2008 accounts yet?

In February 2009: DDDA promised the Oireachtas Committee on Environment it would publish the 2008 annual accounts by the end of June “at the latest”.
In August 2009: DDDA now says the 2008 Accounts “won’t be published until the autumn” of 2009. Coincidentally, NAMA and the Lisbon treaty will be done by then.

Why has the DDDA been unable to set a value on its Irish Glass Bottle site investment?

(The DDDA formed 26% of a consortium (Becbay) which bought the former Irish Glass Bottle site in Ringsend in 2007 for €412 million. Another partner in the consortium (Davy stockbroker’s private client investment) has already written down the valuation of this site to 60%. The loan to Becbay (from Anglo and AIB) was €293 million.)

Davy’s valued the site at €164 million in 2008.

What value would the DDDA’s books show for the investment at end of 2008?

How will NAMA (with a 30% haircut) value the site today?
at €287 million (70% of purchase price)
at €205 million (70% of outstanding loan)
at 70% of some arbitrary future valuation which assumes that the Environmental Protection Agency (also John’s responsibility) gives the site a clean bill of health, that the DDDA (also John’s responsibility) grants planning permission, that development of the site takes place and that the property constructed there actually sells.

It will be difficult to explain to the taxpayer why they have paid way in excess of the December 2008 valuation to buy up this toxic asset should the DDDA accounts be published before the NAMA valuation.

It will be interesting to see if the DDDA accounts are published after the NAMA valuation whether the NAMA 2009 valuation will be retrospectively applied to the 2008 accounts or whether a “true” 2008 valuation will be shown.

The ACC-triggered High Court examinership of Liam Carroll’s Zoe Group is also very helpful in giving a specific example to discuss. In Monday’s Irish Times, John McManus reported the following:

Applying for court protection Zoe said that if the group of six companies, which have total debts of €1.2 billion, was liquidated, they would have a deficit of €900 million. Based on this writedown value, properties on which it has borrowed €1.1 billion from eight banks would fetch €275 million if they went on sale this morning.
That means a 75 per cent writedown for the banks.

So how can the government justify valuing these properties at €737 million (one third discount relative to €1.1 billion)

I would dearly love to see Mr Gormley’s answers to these questions !

Maurice

What evidence does NAMA have that the current market price of property, land etc is in fact the incorrect price to pay?
What evidence does NAMA have that the current market price of these is not in fact going to decline for a number of years, as would be the case if Ireland were to follow the common experience of previous property crashes?
Why would a temporary nationalisation of the banks be a bad thing, given that this would provide the taxpayer with a valuable asset which could be sold in future years?
Why does no independent analyst support the governments view on NAMA? This includes the Swedish finance minister who ran their bad bank system, who said to the Irish Times that he “favours the more severe mark-to-market write-down of assets rather than a ‘through the cycle’ valuation.”, and that “it (NAMA) does not sound like the right solution to buy assets from private banks.” It also includes the IMF who said ” Insolvent institutions (with insufficient cash flows) should be closed, merged, or temporarily placed in public ownership until private sector solutions can be developed … there have been numerous instances (for example, Japan, Sweden and the United States),
where a period of public ownership has been used to cleanse balance sheets and pave the way to sales back to the private sector”, in the context of saying that the likely losses for Irish banks were such as to render them insolvent.
Why not force the equity and bond holders in Irish banks to take the first place in the queue to absorb the losses that the banks would have to book were current market prices to be paid for the loans made. After all, that’s what risk capital is for?
If the state overpays for the loans relative to current market prices, what, apart from a functioning banking system, does the taxpayer gain?
What percentage of book value of the loans should NAMA pay, given that current market prices for land and development properties are somewhere around 30% or less of book value?
If NAMA were to pay say €60b for loans that are worth only €30b, how can this transfer of a full years tax revenue to private speculators be justified in this economic time?
If, as is entirely possible, the loans transferred to NAMA do not provide sufficient income to meet the coupon payments of the bonds issues by NAMA, will the taxpayer, at least in the short term, not have to meet these payments?

Senator Deirdre de Búrca

Green Party/Comhaontas Glas

Spokesperson on European Affairs, Health & Children, Defence and the Gaeltacht

www.senatordeirdredeburca.blogspot.com

M: 086 8061450

T: +353 1 6183513

E: deirdredeburca@oireachtas.ie

E: deburcaoffice@yahoo.ie

W: www.deirdredeburca.ie

T: www.twitter.com/deirdredeburca

F: http://tinyurl.com/cqbo2w

Most disquieting sight: Brian Lenihan not just sitting in on the accelerated confidence debate but getting stuck in to the argument with the legal niceties that were found so wanting once the Limerick Leader materials got widely disseminated.  You’d have thought that if any minister might have other things to do, it would be him.

The bull still in the china shop: Dermot Ahern.  When the Green TDs comment (anonymously) on the demeanour of the senior FFers during the debate being a factor in their doubts, Ahern must surely be near the top of list.  The smirks and gestures never stopped during the debate and even today in Templemore he seems unrepentant about his partisanship.  And this from the Minister whose portfolio straddles both ends of O’Dea’s slip-ups, from the initial incorrect tip about Maurice Quinlivan to the shenanigans in court over the affadavit and the possible breach of the Electoral Act.   Note: the talking point about the FG focus on O’Dea being “despicable” seems to have come from him.

Two bad days on the job: Chief Whip Pat Carey.  Failed both in giving the Taoiseach any sense of the mood of the Dail on Wednesday, and then couldn’t count his votes on Thursday. 

Unintended consequences: Deirdre de Burca.  Some were tempted to dismiss her resignation as that of an appointed Senator from a tiny party.  But the words stung and formed the backdrop for the Greens feeling steamrolled yet again on Wednesday afternoon.  For this party (given also the role of Dan Boyle), the Seanad tail has wagged the Dail dog.

Mystery Man: Has anyone seen Micheál Martin?  Harder to spot lately than those Dubai agents with Irish passports.