People accept decisions must be taken, but there is more than one solution

October 7, 2010 § Leave a comment

One of the legacies of the period from which we have just emerged was the complete failure of many in government to distinguish between a so-called genuine business person and one who was less than genuine. Those who have turned out to be duds and less than genuine, if not worse, were feted and celebrated by many members of the Government during the recent period. Therefore, I would not rely too heavily on the ability of certain people in government to make the distinction between so-called genuine business people and those who are less so.

I do not subscribe to the view that there is no hope. I do not for one minute wish to be lined up in anybody’s mind or book with people who believe the country is sinking or does not have a future, that there is no future here for my children or theirs. I believe very strongly that there is a positive future for us as a community, society and economy. We must restructure and rebuild a genuine and real economy based on production and the efforts of our people, the provision of goods and services based on innovation and all the qualities about which all other colleagues spoke during the course of the debate. In that sense, I am an optimist, although today it is very difficult to be one. Leaving aside political partisanship, I want to be counted among those who see a very strong future for the country in the years ahead when we will address seriously the shocking and horrendous problems we can see.

Neither do I subscribe to the psychobabble we have heard, particularly in recent days, although it has been evident for a number of months. I do not think it gets us very far. I refer to those who give out about people talking down the economy, the endless negativity and so on. Essentially, it is propaganda. Those who devote most of their speeches and spend their time preoccupied with others who, in their view, talk down the economy are not addressing the real issues. In a sense they are blaming and attacking the messenger. People do not need to read the so-called negative pieces by journalists in the newspapers or listen to the economists who appear on “Prime Time”. They do not need to be told by such individuals that things are bad. They can turn off the television and the radio and need never buy a newspaper, but they will still know that things are shocking for them and their families. People who have lost their jobs or have had wage or welfare cuts do not need to be told by anybody, negative or otherwise, that life is difficult and things are tough for them. Let us stop blaming and trying to take refuge in the notion that there is an army of people talking down the economy. There is an element of psychobabble in the notion that if only we could get people to be more cheerful and have smiling economists and cheerful journalists writing nice happy-clappy articles in newspapers, everything would be fine.

Trust is the next issue to be considered with regard to the future and confidence. I had a very interesting experience earlier, although people might think it strange for me to relate it. I listened to the Minister for Finance, Deputy Brian Lenihan, on “Morning Ireland” and said afterwards to a person that I thought he had done a good interview. That person said, “Yes, but do you believe him? I cannot believe him any more.” I asked what was meant by this. The reply was not necessarily a personal criticism of the Minister but one of the Government and its attitude. It has to do with trust. There was such a lengthy period during which the people were not told the full truth or given all the facts that now they are being given facts and the truth which we hope is the whole truth, they have lost faith in anything they are told. There should have been far more honesty much earlier in the process. We should not have had Members coming into the Dáil or the Seanad suggesting, for example, the bank guarantee would be cheap and that we would get out of the banking crisis relatively easily. I recall that at one stage a Minister came into this Chamber and more or less suggested to Members that we would make money out of the whole process, that NAMA essentially would be a money spinner. People simply did not believe it. « Read the rest of this entry »

Extending the Guarantee

September 30, 2010 § Leave a comment

Last night, the Seanad was invited to extend the guarantee covering Irish banks that was first put in place in September 2008.  This was before we were told the final bill for Anglo Irish Bank, which was announced only this morning.  The extension was carried by a margin of 6 in the Seanad.  The following is an edited transcript of my speech…

It is not irresponsible to oppose, to test government policy or to seek to amend it. The opposition at any period of a country’s history performs a major task for the body politic precisely by being in a position to test, criticise, query and, if it judges it to be appropriate or necessary, oppose. It is for a government to ensure its policies are sufficiently well argued in public and in parliament and that it has sufficient support among the members of a parliament to get those policies through. Opposition parties must exercise a sense of responsibility and, especially at moments such as this, restraint in how they present their arguments, marshal their arguments and participate in the debate. I do not disagree with that for one minute.

I do not believe we have time at this point to rehearse all the arguments that were gone through in the days and weeks after 29 September 2008. I assure the House that at all times the position taken by my party, then and since, has been motivated by no other objective than the interest and common good of the country. The fact we took a different view and opposed a proposal brought forward by the Government does not and should not in anyone’s eyes lessen in any way or suggest to anyone, either in this House or outside, that a political party that takes an opposite view is somehow offside, cannot be relied upon or is in some way undermining the common good. The opposite is the case.

We do not have time to deal with or go back through all the arguments we had then. Some of them have been touched on because they are still live and relevant. That is the basis upon which the guarantee was presented at the time and the basis of the claims that were made for the guarantee. Senator Boyle says it has been very successful. I do not know how it is possible for anyone to say it has been successful. While it would be difficult for me to say definitively that it will historically be proven to be unsuccessful, I do not know how Senator Boyle can say it has been successful because it will not be possible to pass that judgment for many a long year from today. I can understand him defending it but to suggest it has been a success seems contingent on many different things that lie in the future such that it is not possible to make the point.

At the time of the original guarantee legislation in regard to which this proposal is an amendment, the Minister, Deputy Brian Lenihan, stated:

There is understandable concern that the Exchequer is potentially significantly exposed by this measure. This is not the case. The risk of any potential financial exposure from this decision is significantly mitigated by a very substantial buffer made up of the equity and other risk capital in the relevant institutions. It is estimated [he does not say by whom] that the total assets of the six financial institutions concerned exceed their guaranteed liabilities by approximately €80 billion, which is half of Ireland’s total GNP. By any measure there is, therefore, a very significant buffer before there is any question of the guarantee being called upon.

I note the narrative has moved in recent days and weeks in the view of Ministers and certainly former Ministers, such as Deputy O’Dea, and I saw the Minister of State, Deputy Curran, nod his head when someone made the point that the banks had lied to the Government. It may well suit the Government that the narrative now becomes “the lies the banks told the Government”. It may be that lies were told and that the Government can somehow seek to portray itself as being blameless in that regard and being the hopeless victim which has been misled. « Read the rest of this entry »

Is Anglo ‘systemic’ to the Irish economy?

March 31, 2010 § Leave a comment

There is no doubt that Anglo Irish Bank has poisoned the well of this country’s banking sector and also its economy. What happened at that bank led to the making of the decisions that were announced yesterday in the Dáil. I do not accept, however, that this issue can be reduced to alleging wrongdoing on the part of certain named individuals. I agree with people who state that in so far as wrongdoing is found to have occurred, those involved should be brought to book. I would be as strong as anyone in advocating that this should happen.

It is part of an emerging narrative, particularly on the part of the Government, to seek to reduce this problem to the proverbial small number of bad apples. I do not accept that when considering what occurred in the past ten to 12 years, it is possible to reduce the wrong that has been done to the people as something which resulted from the actions of three, four or even half a dozen wealthy, or formerly wealthy, individuals. We would be doing a real disservice to the people and this country’s history if we insisted, even for one minute, that this was the case.

There is a great word which continues to be bandied about in respect of the banks, particularly Anglo Irish Bank, namely “systemic”. I am extremely interested in the use and abuse of this word. Like everyone else, I have a reasonable understanding of what it means in the English language. However, it has been employed by the Government, particularly in the context of Anglo Irish Bank, in the same way that Americans use the phrase “Too important to fail”. As I understand it, if a bank is of systemic importance this means its tentacles and those of its business reach so far into the heart of the economy that if it got into difficulty it would, by necessity, have to be saved.

I am intrigued by the statements made in the past 24 hours to the effect that the contents of the balance sheet of Anglo Irish Bank constitute half of the value of the Irish economy. I had not previously come across such statements. In fairness to the Government, if what is being stated is true then this would point to the importance of Anglo Irish Bank being somewhat systemic in character. Is it truly the case that the contents of one relatively young bank could constitute half the value of the country’s economy? If the answer is yes, how was this allowed to occur? In a country where people were previously informed that competition and the plurality of banking services were extremely important, how was such a position allowed to develop? There is a need for someone to clarify the position, particularly in the context of the absence of regulation for such a long period. How did the contents of Anglo Irish Bank’s balance sheet come to constitute such an enormous part of the economy? « Read the rest of this entry »

Public need to know how DDDA cut so many legal corners

March 25, 2010 § Leave a comment

Why have the documents relating to the Dublin Docklands Development Authority not been published? Senator Dan Boyle indicated he believed they should be published quickly when the former Senator Deirdre de Búrca explosion occurred some weeks ago. Will Senator Boyle indicate to the Seanad when they will be published and, if he cannot do so, can he indicate the reason for the delay? We are informed by RTE that the Minister and the Attorney General have the reports. The Attorney General has seen them. The Minister received them last month. Apparently, the process is ongoing. What is the nature of this process?

If such reports are in existence I am not prepared to absolve in advance the Fianna Fáil party and its leadership in respect of what has taken place. In fairness, I may do so when I read the reports but I wish to see the reports first to make up my own mind.

Planning permissions apparently given by the DDDA were considered ‘non-compliant’. That is the phrase RTE has used. RTE did not inform us with what the agency was not compliant. I presume it meant the agency was not compliant with the planning code as we understand it.

It is an extraordinary situation whereby an agency, set up for a very good reason to foster development in a particular area, could end up being used as a conduit to circumvent the planning code and to cut corners. We have seen so many corners cut in recent years by persons in the private sector. We hope we will not find out now that this public body was set up to facilitate private persons and institutions circumventing the law.

Banking policy is now an unclear mess

February 23, 2010 § 2 Comments

Senator Joe O’Toole seems to be in a better position to explain Government policy than the Government. He said on the Order of Business today there is double speak and double think on this issue of credit.

The principal basis upon which NAMA was advocated by the Minister for Finance, put through these Houses and supported by Members on the Government side was that it would lead to the availability of credit to small businesses. Every time anybody on the Government side says anything about NAMA, they claim that it is necessary so that credit can be provided to business. It is not leading to the provision of credit to business at all.

We now have a policy that is not clear and is in a mess, and when the Labour Party was told a year ago that our position on nationalisation was ideologically based, the Minister is now doing precisely what we said he ought to have done in the first place.

More :: State forced to take 16% stake in B of I in lieu of €250m cash (Irish Times)

Not quite the ‘whole truth’ on NAMA

February 9, 2010 § Leave a comment

In the course of debates about NAMA, the Minister for Finance was keen to tell us how supportive the IMF was of the project. Why did he not inform the Houses that the IMF was of the solemn view that the NAMA project would not have any impact and would not lead to a significant increase in lending by Irish banks? There have been many references to the quality of the debate in these Houses, so why did he not give us that single, important piece of information?

Of course, he did not give us that information because it did not suit his purposes to tell us. It is a dereliction of duty to these Houses not to tell us what the IMF has said just because it does not suit the Government’s case, especially since the Government is so quick to invoke the IMF in its support. That is wrong. Why is a freedom of information request by a newspaper required to extract what the IMF thinks on these matters?

The following statement also had to be extracted by way of a freedom of information request and it will surprise colleagues to hear who the author is:

This legislation does not guarantee that credit required by the economy will be provided. This is a life-support measure for the banking system, ie, a bailout for the banking system and primarily for AIB and Bank of Ireland.

Deputy Seán Fleming, Fianna Fáil, Chairman of an Oireachtas committee, made that statement but it had to be extracted by way of a Freedom of Information request. We must have all the information available to us when we have a debate in these Houses. There is no point in the Government selecting the information that suits. If it wants to tell us the IMF is in favour of something, let it give us all of the information coming from the IMF and not be selective for its own purposes. I do not have time to debate whether NAMA will lead to credit flowing – it is incorrect to say the Government side did not make as a central part of its case that NAMA would restore lending to the economy and small businesses in particular

That was the case made over and over again. The case was made as recently as yesterday by the Minister for Finance when he said the purchasing of bad loans by NAMA would increase to ensure the banks could get back to lending. That was the case being made and there is an attempt being made to resile from that position.

Plan to help homeowners needs to come to fruition

February 5, 2010 § Leave a comment

For the sake of the people facing searing debt I hope the proposals the Minister for Communications, Energy and Natural Resources mentioned last weekend come to fruition. However, people will excuse me for expressing a certain amount of scepticism about that particular statement because it bears closer scrutiny. It refers to the setting up of an expert group, presumably to come together and bring forward recommendations.

The Minister used the term “rolling recommendations”, whatever they are, in respect of what would be done to address this problem. First, it is an expert group set up to make recommendations. From what one can see, it not a group set up to do anything, although perhaps I can be corrected on that if I am wrong. Second, the expert group is not to be set up imminently. It will be set up within weeks.

Senator O’Toole has said, “Fair play to the Greens if they make it happen”, but there is no particular evidence that anything will be made happen from this statement. There is simply a statement of intent to have a group of people come together to discuss it and make recommendations. That is very different from the concrete proposals that have been brought forward, including proposals by Labour, in respect of addressing this very serious and urgent issue.

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