Irish Politics


‘…the government is determined to give this €7 billion to these bankers at all costs.  That no matter how difficult the negotiations, no matter how tough a bargain the banks drive, the government has no other strategy but to recapitalise.  That the government has a default position that AIB and Bank of Ireland will be part of the solution no matter what the price.  Why would this be so?  Is it a kind of loyalty to fellow members of the golden circle?  Is it to prevent the banks from calling in their tabs with Fianna Fáil’s best mates in the building industry?  Why does this Fianna Fáil led government seem so determined to roll over and have their bellies tickled by AIB and Bank of Ireland?  Are they completely incompetent or completely corrupt?’

 

The quote above is from piece I posted on February 11th 2009.  It is hard to fathom how in just 21 months we have gone from a €7 billion bank recapitalisation to where we are today.  This evening our government signed up to saddle the country with a €67 billion debt.  That is over €16,000 for every man woman and child in the state.  On top of this they have all but cleaned out the National Pension Reserve Fund and paid out another €5 billion from our cash reserves. This all comes on top of the €20 billion plus we have ploughed into Anglo Irish bank, €7 billion to AIB and Bank of Ireland and €55 billion of bank debts which was quietly repaid to the ECB in August 2010.

What has all this been for? 

The government and the EU would have us believe that Ireland’s financial woes exist in a vacuum.  That all of this is being done to save the Irish economy from total meltdown.  The EU and the IMF are shining knights, riding in to save us from ourselves.

Forget the white knuckle terror in Frankfurt and Paris and London that major financial institutions in those cities would be washed away in a tide of bad debt if Irish banks were left to sort out their own mess.  Forget the real fear in Brussels  that somewhere down the line the EU could find itself having to bail out a major European economy in Spain or Italy if this thing is not nipped in the bud.  The ‘rescue’ of Ireland’s economy is the first salvo in a fierce battle to save German, French and British banks from a major default by AIB, Bank of Ireland, Anglo Irish and, on a much smaller scale, Irish Nationwide, on massive loans which under usual, sane banking rules they would never have received.  It is, we are told, going to prevent contagion from spreading, first to Portugal, which is even now teetering on the brink of collapse, and from there to the remaining members of the PIIGS club, Spain and Italy.  It is, apparently, going to save the Euro currency itself from collapse and may, incredibly, secure the future of the fifty year old European Union project.  It’s fantastic really.  Plucky little Ireland, without a thought for its own safety (or its elderly, its sick, its poor and its future generations),  is going to hurl itself into the raging river of recession to haul the whole of Europe to terra firma.  Do we want any thanks for this unique act of bravery and self-sacrifice?  Will we sit by the phone awaiting news of the Queen’s New Year’s honours list?  Will Lady Hibernia order a new frock in anticipation of an evening at a Legion d’honneur ceremony in Paris?  Will she, fuck.  Not only do we refuse any thanks or gratitude for sacrificing our future generations, we are actually willing to pay handsomely for the privilege of being the hero of Europe.  We have pledged to pay up to €3.8 billion in annual interest payments for this wonderful honour.

If I remove my tongue from my cheek for a moment I must confess to being extremely puzzled. If this bailout is of such huge benefit to over 500 million people across Europe, why are just 4 million people in Ireland being asked to foot the bill for the entire deal?  Why are our ‘friends’ in the EU asking us to enrich them to the tune of over €2.5 billion each year in punitive interest payments? 

Suppose for a moment that you are in a spot of bother with the building society.  You’re three months behind on the mortgage, having lost your jobs nine months ago.  You have, however, just secured new employment and your new wage allows you to easily meet your monthly outgoings.  The building society is not playing fair though.  They want all of the arrears repaid immediately or they are going to take your house.  What can you do.  Well you could approach your best friend in the whole world, whom you know to be quite solvent, incredibly flush with ready funds, in fact, and ask him if he could see his way to digging you out (interesting phrase) to the tune of five grand, which you will easily repay within the year.  Isn’t that what best friends in the whole world do for each other?  Imagine your chagrin if your supposed best friend were to insist that the five grand be repaid with an extra 5.8% on top.

‘Yeah, I love you mate.  I know I’m godfather to your eldest kid but, you know, business is business.  Five grand cash now, 5,290 next year.  Sweet as a nut.’

For our supreme act of heroism, stupidity or just plain folly (take your pick) in saving the entire European Union from implosion we are willing to pay an almost unimaginable price.

Alan Ginsberg said, ‘America, this is serious’  Well Europe, this is serious.  People are going to die because of what Brian Cowen and Brian Lenihan did today.  People will die who would not have died if this money was available to provide proper public healthcare.  Children with special needs will sit unrecognised and unfulfilled at the back of Irish classrooms because the special needs assistant is not there.  Women will stay in violent abusive homes because the shelter to which they could have escaped will not be there.  The list of those who will suffer because of this is long, very long,  and it will touch every person, every home in the nation. 

Brian Cowen’s press conference performance tonight was abysmal.  I listened live as I drove along the M4 towards home and was seriously dismayed by his offhand, dismissive tone.  His refusal to outline to a reporter from Sky News any details of the bilateral loan from the British exchequer was incredibly arrogant.  It’s not as if borrowing €67 billion is something we do every other week.  The least he could do is spend thirty seconds explaining to the British taxpayer just what they are getting for their billions.

Cowen came across as a man who now feels that his job is done.  His demeanour speaks of a man who now just wants to wash his hands of the entire affair and hand the whole sorry mess over to the next poor schmuck.  Be that Enda or Gilmore I don’t have any warm fuzzy feelings when I consider the future governance of this ‘great little country’, as one former Fianna Fáil leader called it.  The next administration, whether it is Fine Gael-Labour or Labour-Fine Gael will simply throw its hands in the air, declare that Fianna Fáil and the Green Party have landed us in a right pile of shit and implore us to wrap ourselves in the green flag, put our collective shoulders to the wheel and make the best of it.

We have a serious problem with the standard and calibre of public representatives whom we elect and install in high office in this country.  We do, however, elect them.  My brother recently put quite succinctly.  The problem, he said, is that we keep electing the village idiot.  The guy with half a brain and lots to say who in a sane society would be barred from every pub in the village because nobody wants to sit beside him.  This, certainly, is part of the problem. A larger part of the problem, however, is an electoral system which allows the village idiot to collect the paltry five or six thousand votes required to get their arse on the plush leather seats in Dáil Eireann.  One notable village idiot, Ivor the Driver, got himself into our national parliament in 2002 with just 900 first preference votes!

The required changes to this system will not come through any electoral reform emanating from the current incumbents of Leinster House.  It is absolutely opposed to the self interests of our sitting TDs to do anything about the crazy over-representation in our national parliament.  One TD for every 25,000 citizens equates to 2,400 MPs at Westminster.  The bloated salaries and unvouched, gravy train expenses only ensure that politics becomes a lucrative career rather than a public service.  ‘If you pay peanuts you get monkeys’, they will tell us.  If you pay superstar wages you get greedy, self-serving snouts in a trough.  No, these changes will not come through normal, peaceful parliamentary channels.  Those turkeys will not vote for Christmas and the supine electorate will continue to elect the same village idiots, will continue to know that they are idiots and yet, will cling to them, slap them on the back and hope that they can do something for them, bend a rule somewhere to get them a benefit to which they are not strictly entitled, make that awkward speeding fine go away or maybe, if they can grease their way into ministerial Merc, pour a waterfall of inappropriate funding into the constituency.

You may think that I am advocating violent revolution.  I can see how you might assume that.  Well, the sight of Aengus O’Snodaigh storming the gates of Government Buildings last week is enough to entrench one permanently in the field of parliamentary democracy.  These changes can only come about through the emergence of a new political class.  A class of citizens who feel a vocation to serve their society honestly and honourably and who seek no reward but a decent living salary and maybe the support of their communities.  Unfortunately, while these fantasy unicorn politicians are promising a new honesty in public life the village idiot will be promising a modern sports centre in every village, lower taxes and all your dreams come true.  You guessed it.  The village idiot romps home and celebrates by singing drunkenly from the back of a truck in his home village, his power base, to where, in his county council days, he moved the public library, the local courthouse and a decent sized county council office.   Game, set and match to the village idiot.

Worryingly, I am in full agreement with the view of Bertie’s former squeeze, Celia Larkin in the Sindo when it comes to Aengus O’Sneerigh’s prime time, sound bite assault on our democratic institutions.  Now there’s a thought to make me go to bed and cover my head…

Advertisements

On Saturday morning last I was driving to Loughrea from Claregalway when, on Ruth Buchanan’s Playback programme, I heard a piece from Thurday’s Liveline.  A guy called John was talking to Damien O’Reilly about being a small time heroin dealer in Dublin.  John’s main defence of his part time occupation was as follows. It is simply impossible to live on the €204  job seekers allowance that he is given by the state every week, so he is forced to supplement his income by selling heroin.

Fast forward to Monday morning and Government chief whip, Pat Carey, is being interviewed by Áine Lawlor on  Morning Ireland.  Carey had come out to defend the fact that, contrary to what was announced in the budget speech by Brian Lenihan, sitting TDs could, after all, continue to receive ministerial pensions.  During the course of the discussion Carey alluded to the recent tribunals and suggested that we did not want to return to those bad old days.  This is a shocking and disgraceful statement from any TD, but from one charged with keeping  back-benchers on side with the government message, it is all the more so.  To suggest that if our esteemed public representatives are not paid enough, or even what they would deem to be sufficient, that they would inevitably resort to corruption and bribery to supplement their incomes is an incredible position for a chief whip to take.

When John the heroin dealer declared that he must turn to law breaking to supplement his €10,608 annual income, another caller to Liveline was moved to call him ‘the scum of the earth.’

When a government TD suggests that TDs and former ministers might do the same if their wages of between €100,000 and €150,000 plus are cut by a few grand it raises barely a whimper.

Does anything tell us more about this government’s contempt for and their detachment from the electorate.  How much longer are we going to allow this powerful, wealthy, detached elite to treat us and our democracy like a private country club.  How long will we continue to be a veritable ATM for these leaches.

This ‘L’Oreal’ cabinet see nothing wrong with a Taoiseach who earns more than the President of The United States.  They see nothing wrong with TDs getting compensatory payments of over €50,000 when they lose their junior ministers’ positions and then having to eke out a living on the basic €100,000 backbencher’s salary.

Why?

Because they’re worth it.

You will not find one among the current 164 TDs and 60 Senators who genuinely does not believe that  they are worth every cent.

Many callers to Liveline today agreed that we need to pay our politicians well if we are to get the best people for the job.  In recent years, as the wages of our elected representatives have soared, this has become accepted wisdom.  If you pay peanuts, we are told, you get monkeys.  I don’t agree with this.  I think that it is just possible that the higher the remuneration the lower the standard of politician you are likely to get.

The skills and the attitude required to run profit driven, private companies and PLCs are quite different to those required to run public institutions.  Every day of every year there are tens of thousands of people, the length and breadth of this country, who engage in volunteerism.  These people selflessly give their time and energy to run GAA clubs, soccer clubs, boxing clubs.  They take care of elderly neighbours and relatives and never ask a cent for their service.  These are decent, civic minded people who give because it helps their communities and probably because it makes them feel good too.

Conversely, the more we pay our politicians the more likely it is that we will get people who are only in it for the money.  These are absolutely the wrong people to run the country.  These are the wrong people to take care of the sick, the elderly and the disadvantaged.  These are the wrong people to be charged with the sharing out of the wealth of the nation.

We, however, are the idiots who keep electing them.

 

Once again this Fianna Fáil / Green Party government shows us how completely out of touch it is with the country.  In a truly astonishing move education minister, Batt O’Keefe, today announced that funding for special teacher support for children with mild general learning disabilities in 119 primary schools throughout the country is to be withdrawn.  How this move could be seen as anything other than an attack on the most vulnerable children in our school system is beyond me.  The Irish Constitution demands of the state that it provide an education to all children.  The right of an Irish child to be educated is enshrined in the most solemn document of this republic.  Nowhere in article 42 of the constitution is there any reference to how children might qualify for different standards of primary education.  One would have to accept that, based on the rights enshrined in article 42, children with mental handicap, emotional problems or any other kind of educationally disadvantageous condition are as much entitled to primary education as any other children.  Nowhere in the constitution is there a reference to the state’s ability to provide financially for the education of any child.  The withdrawal of this necessary teaching aid to an estimated 534 children would appear to be a dereliction of the state’s constitutional obligation to children’s education.

This is not, of course, how Minister Batt O’Keefe will see it.  “There isn’t any massive change.  There are hundreds of similar kids right around that have been integrated into mainstream classes,” he said today.

It would seem that the minister believes that the provision of special teacher support for special needs children up to now has been an unnecessary luxury.  A luxury which, in times of serious financial hardship, such as the country now finds itself in, is a profligate waste of taxpayers’ money which is among the first of the unnecessary luxuries to be axed as the government seeks to cut €2 billion off the budget spend for 2009. 

Since Brian Cowen told us last week that serious cuts in public spending were needed we have seen a pension levy imposed on the salaries of public sector workers and a freezing of previously agreed public sector wage increases.  This savage cut in funding for special needs teachers is so far the only other announced budget cut.  The department of education estimates that this measure will save in the region of €7 million.  As I write this the following budget provisions are still in place.

Local Authority Swimming Pool Programme: – €18 million, Irish Sports Council: – €53.026 million, National Sports Campus: – €4.403 million, Lansdowne Road: – €1.5 million, Horse & Grey Hound Racing Fund: – €69.719, Grants to support sport in disadvantaged areas: – €1.35 million.

Yes, you did read that correctly, €69.715 million in grants to horse & greyhound racing for 2009.

We still have 20 junior ministers earning in excess of €140, 000 per annum. We still provide a car costing over €100,000, each one equipped with two full time Garda drivers, to each of our 15 ministers. We have just given a €1,000,000 severance package to a financial regulator who had to resign because of his incompetence. Each of 165 TDs ‘earns’ a basic salary of over €100,000, which rises, when membership of committees and various unvouched expenses are added on, to over €250,000.  Tonight we spent €7,000,000,000 to recapitalise two of the largest private institutions in the state and most analysts reckon that a further €13,000,000,000 will be required to do the job properly.

The list of places where cuts could have been made before attacking vulnerable, defenceless children who, through no fault of their own, face serious challenges in accessing primary education is almost endless.  The proposal to end the universal medical card for over seventies could be justified on grounds of ability to pay.  A proposal to introduce university fees could be defended on the same grounds.  One was reversed when the political heat got too much and the other will see massive student demonstrations if it is introduced.  The public sector pension levy can be justified when compared to the required contributions to attain a comparable pension in the private sector.  It remains to be seen if this government has the stomach for a fight when the students and the unions take to the streets as the pensioners did last autumn.  Will they stand up to these groups or simply turn tail and put the boot in to another vulnerable but less vocal section of our society?

This government shames me and shames my country.  That I did not vote for them is no consolation to me whatsoever.

 

Last autumn representatives of the main financial institutions went cap in hand to Merrion Street and announced that they were in some serious trouble and something really must be done.  From the outset the government would seem to have been in an incredibly strong negotiating position.  So what did they do?  They pledged to guarantee the deposits and the assets of these institutions.  They then rushed legislation through the Dáil to effect this guarantee and then they sat down to negotiate the terms of a guarantee which they were legally obliged to provide.  Wouldn’t you just love to play poker with these guys?  I can just see Biffo announcing to the guys sitting around the green baize, ‘I’ve got four aces here, lads.  So I’m putting everything I have on the table.  Anyone going to see me, then?’

Tomorrow Brian Lenihan will announce details of how €7 billion of Irish state money is to be applied to save the two largest financial institutions in Ireland, AIB and Bank of Ireland.  The negotiation of the terms of this cash injection have been going on for quite some time and it would seem, from reports which have been filtering out, and from the general demeanor of Lenihan and co, that the government has been on the back foot for most of the engagement.

Now, I’ve said before that I am not an economist, but the situation would seem to be pretty straightforward.  One scenario is that the two banks are in serious trouble and are desperately in need of a massive injection of new capital to allow them to stay in business.  In this case the banks don’t have a leg to stand on and have to accept whatever terms the government cares to dictate.  Another scenario is that the banks are actually reasonably healthy and are not, in fact, in any danger of collapse.  In this case the government can then simply take our €7 billion and do something useful with it.  The recapitalisation of AIB and Bank of Ireland is supposed to encourage the banks to start lending money to small business again, therefore safeguarding jobs in smaller firms which are experiencing cash flow problems.  If the banks don’t want to do things our way then there is another bank which could be used to channel this cash to the SMEs.  Anglo Irish Bank is wholly owned by the state and could be transformed into a kind of latter day ACC to offer credit to businesses which are otherwise sound but are suffering through a lack of cash at certain times.  As I said, I’m not an economist, so I can’t say with certainty that this transformation of Anglo Irish Bank is possible.  However, if it is not, why not just build a new ACC type vehicle to restart the flow of credit to small business.

Now, as you can see, the government has held all the aces from the very start in this sorry mess.  The fact that doing a deal with the banks has been so difficult can only lead me to one of two conclusions.  The first is that the government and those negotiating on their behalf are complete idiots who are being led a merry dance by Messrs Goggins and Sheehy and their doubtless large and expensive team of financial and legal eagles. This is a rather worrying thought since Cowen and Lenihan and Coughlan and their mates are actually supposed to be running the country.

The second conclusion is that the government is determined to give this €7 billion to these bankers at all costs.  That no matter how difficult the negotiations, no matter how tough a bargain the banks drive, the government has no other strategy but to recapitalise.  That the government has a default position that AIB and Bank of Ireland will be part of the solution no matter what the price.  Why would this be so?  Is it a kind of loyalty to fellow members of the golden circle?  Is it to prevent the banks from calling in their tabs with Fianna Fáil’s best mates in the building industry?  Why does this Fianna Fáil led government seem so determined to roll over and have their bellies tickled by AIB and Bank of Ireland?  Are they completely incompetent or completely corrupt?

photo copyright alawlor 2008

So, the country is in recession for the first time in twenty five years.  Batten down the hatches, as they say, this could be a rough ride.

By my reckoning the Celtic Tiger boom finished about August or September last year.  We had ten years of unprecedented economic growth.  Economists around the globe stood and stared, their jaws residing somewhere below the knees, unable to believe the fantastic gains being made year on year in the Irish economy.  Now, a mere ten months after the tiger stopped roaring, we are facing our first recession in a quarter of a century.  Already the minister for education has told us that the school building fund is bereft of resources.  Dermot Ahern recently silenced the unseemly row in the north-east over where the new regional hospital should be built by glibly informing those involved that there would be no money available to build the hospital after all.  Over the coming months we will see project after public project being cancelled or massively scaled back as the government tightens the public purse strings.  Almost every economist I heard on radio today said the the national development plan should continue.  Many said that with the excess capacity now available in the building industry and construction and engineering firms desperate to secure new contracts in an ever shrinking market that the time was ripe to secure good value for money on large infrastructure projects.

Will the government do this?

Not a chance.

The priority of this government will now be to curtail public spending as much as possible over the next thirty months.  We will then see a sudden, massive increase in spending in the 18 months leading up to the 2012 general election as Fianna Fáil tries, once again, to buy its way back into power.  The most depressing thing is that this same strategy has worked twice before and, if the recession doesn’t get too deep, it will probably work again.

Fool, me once, shame on you.  Fool me twice, shame on me.  Fool me three times?

Some better prospects on the economic horizon, however, with the news that the government is soon to give us a casino on every corner. Every cloud has a silver lining, I suppose.

Much has been made recently of the apparent democratic defecit at the heart of the European Union.  Euro-sceptics will tell you that we are being ruled by a faceless, unelected bureaucracy.  It would be instructive, then, to look at the make up of the legislative of the EU.

The European Parliament consists of 785 members, all directly elected by the citizens of the member states.

The European Commission consists of 27 commissioners, one from each member state.  The commissioners are nominated by their national governments and the entire commission must be accepted by the Paliament.

The Council of the European Union, more commonly referred to as the council of ministers, consists of one representative of each member state.  Usually the relevant minister for the topic being discussed will represent his or her nation at Council meetings.

The European Council is made up of the heads of government of the 27 member states.

That would seem to be an awful lot of elected representatives for an apparently undemocratic institution.  The only people above who are not directly elected by the prople are the commissioners, but they are appointed by those whom we elect, in much the same way as an Taoiseach can appoint 11 members to Seanad Éireann and can also appoint any member of Seanad Éireann, elected or not, as a minister in the government.

Whatever fears the European Union my hold for Ireland, a lack of democracy should not be one of them.

‘…and they so loved their country that they used its flag as a tablecloth.’

Lisbon ‘NO’ supporters honour the Irish tri-colour at a victory celebration in Brussels.

 

 

 

Meanwhile back in Ireland, Chicken Licken was reaching some alarming conclusions.

 

Next Page »