March 1, 2011

Time for Ireland to act boldly

Posted in Politics · 84 comments ·

For us in Ireland, the example of New Zealand should give us cause for hope, because it reveals that a new government with a fresh mandate can reverse the decline

In a crisis, some countries choose to survive and others don’t. If you are prepared to act boldly, you can turn things around. History is full of such examples. In the 1950s, both Uruguay and New Zealand were among the richest countries in the world. Both went into decline as agricultural markets in Europe shut down to them. Both have survived. Compared to other countries in Latin America, the Uruguayans have performed extremely well and their default on their national debt in 2002 did nothing to affect that performance.

But of the two, the turnabout in New Zealand has been the most dramatic. For us in Ireland, the example of New Zealand should give us cause for hope because it reveals that a new government with a fresh mandate can reverse the decline. Not only did the Kiwis dust themselves down and turn their fortunes around, but they did it in the traditional way. While they deregulated, education didn’t suffer. While they stripped down their health system to rebuild it, the provision of healthcare didn’t suffer.

The Kiwis didn’t just change how their public service operated, they changed their laws. Can you imagine Ireland introducing something as logical as a ‘no fault’-based compensation system for personal injury? So if you fall down and break your leg, you get a fixed compensation and you can’t sue anyone for more than that. This seems completely logical and maybe that’s what clear thinking government, unencumbered by vested interests, gets you.

Today, for example, did you know that the average child in secondary school in New Zealand has a mathematical achievement standard that is twice as high as the average child in school in Ireland?

Yes twice as high. In New Zealand, according to a study from Stanford University, 16 per cent of 16-year-olds are performing at an ‘‘advanced level of maths proficiency’’. In Ireland the corresponding figure is 7.9 per cent.

The reason this is important is because it matters to potential job recruiters. We talk about the ‘‘smart economy’’ and have given over much discussion to our corporate tax rate, yet the key to investment is the people not the tax rate and if your people are not as qualified as their counterparts abroad, we become less and less attractive, irrespective of the tax rate.

So how did the Kiwis do it? And could our new government do something similar? In the late 1980s,New Zealand was devastated by the collapse of its main industry – agriculture – its public sector was grossly inefficient and expensive, it suffered persistent fiscal deficits and successive regimes valued mediocre stability over ambitious innovation. In the 1970s, New Zealand had lost access to its traditional food market in Britain after that country joined the EEC. This meant that exports of agricultural products were not producing the returns they had for previous generations. Couple this with the global slowdown from the oil crisis and by the start of the 1980s New Zealand found itself in dire economic straits.

The New Zealand economic model had been one of protectionism, tight regulation of many industries and state support for indigenous industries. What we would now call ‘big government’.

By the time the 1984 election came, the writing was on the wall for the incoming Labour government. Luckily for New Zealand, they had Roger Douglas as finance minister, who had clear ideas on reform. He devalued the currency by 20 per cent. He deregulated many industries.

He set about changing the way the government of New Zealand worked.

He said that he had to work fast in implementing his policies, because if he slowed down, interest groups would have time to get in the way of his reforms. His big message was that the interest groups needed to be smashed if New Zealand was to survive and thrive. Sound familiar?

In 1990, the incoming National Party government of James Brendan Bolger, the son of immigrants from Gorey, faced exactly what Enda Kenny will face today: a banking crisis. The largest bank in New Zealand needed to be bailed out after Australian mortgage loans went bad.

Bolger injected capital into the bank only after forcing the bank and its bondholders and shareholders to take losses.

He also had an exit strategy, which was to sell it to a bigger Australian bank and to get it off the New Zealand books as quickly as possible. Two years later it was sold for a profit to National Australia Bank.

The New Zealand approach of completely changing the health and education services, forcing all public servants to take individual contracts to reduce collective bargaining and removing the ban on firing public servants might not be exactly what is needed here, but it does suggest that it can be done.

The most interesting thing about New Zealand is that someone with a new political mandate decided that change had to come. This is desperately needed here.

Ireland is at that tipping point. We can go on pretending that everything is all right, that everything will work out, or we can face the unpalatable reality and admit that we are on the wrong road. If we do not change, we are going to lose a lot more than billions of euro on the banking system. We are going to lose our sovereignty.

Bolger and the other Kiwis realised that they had to have a credible plan to balance the books. The second thing they realised was that it was not the government’s job to pick industrial winners.

Bolger removed subsidies on industries (especially agriculture).He said that the government should not choose which industries should survive while allowing others to fail. He stated that government subsidies were a function of influence/ lobbying of government by powerful industries.

He would never have believed in the ongoing corporate welfare that has been extended to our banks. In New Zealand, they fixed the banks quickly and then sold them on for a profit.

Today, New Zealand is a rich country. The health service is cited by many as an exemplar, both in terms of the system itself and the way in which it is funded. We can see from the figures that its education service is in the top 2 per cent in the world, while ours is falling back.

However, as we arrive at the point of no return, the New Zealand case is interesting because it shows that the lead has to come from politics.

Now that we have a new government, we have a new opportunity. Our only hope is that this new government seizes the opportunity and, although we know it will be nasty for the next year or two, it has our support. Go for it.

  1. Tull McAdoo

    I have spent most of my life negotiating various deals in the Financial Markets and on that basis I am prepared to give my opinion as to what the new Government should do now. First let me remind people of a well known fact and that is ……. Any threat if it is to be effective must be credible…….. Having said that then, it should be very easy when re-negotiating with Europe with regard to Ireland and its “support funding” as I will now call it. The key to this is to tell Europe that what ever deal is agreed upon, and given the enormity of the issues involved, the new Government feels that a referendum of the people of Ireland will be necessary.
    Europe knows full well that Ireland was capable of saying NO to Lisbon. In order to convince the Irish to change their minds on Lisbon, promises were made, but these promises were never delivered. The Irish will be very sceptical of promises made at this point, so therefore only concrete and workable solutions will be accepted.
    It is the threat of holding a referendum that will ease the negotiations as the Europeans can not be seen to favour Bondholders or any other vested interests over the Democratic wishes of its Irish citizens. Remember the last thing Barroso, Trichet , Rehn and there ilk would wish for is for somebody to threaten them with “Democracy”………Now lets have at it………

    • A threat?

      No, this referendum should take place.

      But it won’t….

      ….Our only hope is that this new government seizes the opportunity and, although we know it will be nasty for the next year or two, it has our support. Go for it.

      Yeah, right!

    • EDBernays

      I have create a site to demand a referendum on the bailout.

      All are welcome, we need people and ideas to push this champaign forward.

    • Deco

      The power centre in Brussels does not give a toss about the Irish, or democratic process here.

      It is institutional power, and the preservation of institional power that registers. Functionally, we crossed the Rubicon in the Treaty of Maastricht. After that it was about forming an Imperial concern.

    • CitizenWhy

      A Referendum is a great idea. But the Lords of Europe, to whom all Irish politicians bend their medieval knees, will say no and that’s the end of it. New Zealand is an independent country. Ireland is not. The Lords of Europe would fear referendums in other countries, which will not go their way. Combined with the huge increase in energy costs that are coming, referendums could spell the end of the Euro, or the EU itself.

      The Lords of Europe covet the Irish gas fields, and they will seize them one way or another should Ireland default, as it must even if it does not want to.

      What is to stop an organization from forming to a People’s Referendum (if the government won’t)? Remember the Land League? What about calling this organization Land League 2.0?

    • donal jackson

      I believe you really don’t understand the agreement. We cannot interfere with it because we made it. The government negotiated and signed it. What we need to do is solve our own problem on our own. There are ways to do this but until we recognize the fact that we are on our own we’re at nothing. Of course we can default, that’s a given in any deal but the consequences of this type of action is something you don’t want to experience. We elected a government to democratically represent us and they gave us this deal. If the EU/IMF want to re-negotiate the deal we can then dictate. We must solve our problem in a way that brings them back to the table. (1)I can suggest how we can achieve this if you like? (2) I can show you how we can put our people back to work. (3)I can show you how to get our tourist industry re-energized. (4)I can suggest how we might solve the huge expense of the health services. All the above would be a start. I can then show you how to get serious and really solve our problems.

      • Hi Donal,
        I’m not sure who you are addressing but if you’re asking if anybody is interested in your suggestions? Well Yes!
        I’d love to see you expand on your points please!
        Thank you.

        • donal jackson

          Hi Paul,
          I am addressing anyone who believes deliberate default is the answer.We must be proactive in our endeavours.I will give one example tonight and follow up tomorrow if that’s ok? As you know we are facing water charges or rates in the very near future.We will be asked to pay this charge with nothing in return except the possibility of the water services being privatized. I suggest, say for residents a €200 per household per year.Lets offer this as investment opportunity for the citizens through infrastructural bonds. Money gets paid up front with the interest in water. 1 years payment in advance gives 1.5 yrs of water in return with the bond for anyone who wants to buy it. Money ringed fenced and used to put people to work on installing the new system. We can do this for our broadband and electrical grid systems also. More tomorrow….

          • Yes, I like it Donal.
            Some very tidy lateral thinking going on there –
            However, and this is not a criticism, merely a fact; the Irish Political establishment doesn’t do lateral thinking.

            One of the key concerns here is what it will it take to get this type of thinking and initiative into effective policy?

            While the Fine Gael / Labour negotiations are in full swing I wonder whether the Independents have done any worthwhile negotiation to establish themselves as a powerful voice in the Dail?
            I’m looking forward to your next examples but I think it’s important to find a some type of effective lobby for such ideas. I seriously doubt that the mainstream parties would adopt any form of genius?
            And yet it must be obvious to anyone with half a brain that our ultimate return to prosperity and full self determination will have to involve at least structured default and a touch of genius!
            Thank you!
            Keep it up Donal!

        • donal jackson

          Thanks for that Paul. Let me explain further. (1)This means we don’t have to borrow and no extra interest payments. The first people employed for this work should be off the register for unemployed and then others who have emigrated.(2)Mr Manuel Jose Barosso, president of the EU, told Joe Higgins in no uncertain terms the problem was ours and was caused by ourselves for differing reasons.In my opinion Mr Barosso should resign for this comment as he is telling the world to be careful of Ireland. Intentional or not?? (3)These bond holders are other banks, pension funds through managers and what is called hedge funds. This hedge fund is a little misleading as they are just aggressive investment funds that have nothing to do with hedging. However, in relation to our problem what they all have in common is they are German and French.Are you beginning to see the picture now? They have to find investments that are worthwhile. Infrastructural investments are ideal because they come in the form of PPP entities. Mr Claude Trichet chairman of the ECB stated that no bank would default on bond repayment. Ask yourself why he said this.If we start by investing in this as citizens we deprive them of the opportunity.(4) We must attract foreign companies to set up in Ireland by reducing our corporation tax by 2.5% to begin with and further if it does the job of attracting them.Can you imagine what the foreign companies in Germany and France will say to this?? They may want to move here and then imagine what Mr Barosso will have to do..He will have to come back to the table? But he better bring the money we have given already?? This reduction should be viewed as an equity investment by the government on behalf of the people. We can get a dividend when the board of the company decide to pay.Every company in Ireland should have the opportunity to avail of this investment.This would be a significant statement by the Irish government that we are involved and willing to work for these companies. Think about the principle behind what I am suggesting for a while…more later.

          • Hey Donal,
            I find it absolutely refreshing the thought of an Irish Government saying to EU/IMF gurus;

            “You wanted us to change our Corporate Rate? Well we have – It’s now 10% or even 5%!”

            Now that would attract more Foreign Direct Investment! And lead to more jobs and therefore a bigger tax take and smaller social welfare bill! And actually such a reduction would have little negative impact on our coffers in the short term but might offer significant benefit in the long term!

            -”Mr.EU/IMF we’re doing it in order to generate more income so we can pay you guys back! Because as you know at the current state of play we have no hope!”


        • donal jackson

          Good morning Paul, Other points in numbers; (1) The people who are taken from the long term unemployment register can be retrained at the coal face and not Fas thus saving more money?. 5 years of zero rate employers PRSI contribution for doing this and for other short term 3 years.(2) We have the best potential for wind and wave energy in the world on our coastlines, New Zealand and Hawaii are next best but some way back. We can build clusters of wind turbines and wave elements to power water pumps and pump water behind the Hydroelectric dams we build at the mouth of our natural fjords.We can become the battery of Europe. I can show how this can be funded.(3)We connect these works to our sight seeing tours for our tourists, giving information packs and show where we will run the cable cars when finished for those tours.(4)3rd level education in the USA is very expensive. We offer places to our wider Irish diaspora both Parents and Gran parents to educate their children here, even paying for accommodation here its cheaper than there. We work to make every one of these foreign students Ambassadors by default for Ireland and promote our tourist industry this way as well as bringing in the vision of the sports on the water lakes we create. We keep in mind the world sporting events and look to stage them here? more later…

          • irishminx

            I like your ideas Donal. I just wish someone who could implement them, would see them.

            Thank you for the time you give.



          • Donal
            I’m very interested in the funding you mentioned re us being the European Battery.
            What’s most amazing is that it’s been so obvious for so long and yet our politico’s just never seem to mention it?
            My fear is that they’ll barter away any hope that we as a people will properly benefit from it.
            If left to them the benefits will be siphoned off by “the people we owe the money to”.
            Keep it coming Donal!
            And we’ll try and find a plausible home for the ideas!
            Regards again

        • donal jackson

          Does anyone have a line into or a ph no for David Mc Williams.

          • Donal,
            I don’t personally have an “in” there but please let me know how you get on! I’m aware that some of the posters have a direct line to the man.
            Maybe there are more effective ways of getting those ideas into the system. There’s some very hungry and broad thinking Independents out there at the moment and soon all of their emails will be available on
            Furthermore there’s these guys
            And they seem to be a lobby group for transformational government. (See their ideas for transport)
            Don’t forget my updates! My email is should you require it.

    • phineas56

      Did any of you read the article by Mary Ellen Synon in the Irish Daily Mail last Monday? She is a deep eurosceptic and argues that a referendum is a waste of time and money as the result will be ignored by the mighty machine that is Brussels. Like Lisbon…vote again. Or get lost and pay up.
      Have Enda and Eamon got the point? We are going to default.
      What about being less died in the wool at this time of huge crisis and think about going to sterling as McAvaddy just suggested eh David? The alternative is to take our riding orders from Germany an outcome Casement and 1916 leaders seemed to want Ironically their wishes seem to have come true. Is it time to go another direction with the Anglophone world? Do we want a post-nationalist country?
      New Zealand may have solved their problems but they control their currency, interest rates and I suggest the debt crisis was nothing like as deep as ours.


  2. Burdenedbydebt

    Irish people should be the only interest group in this country, Whats best for us is not always whats best for vested interests and so we all lose. We are like a big dysfunctional family. Lets start with this bank bail out: Please sign this petition I created, so that the Irish people are the only interest group when it comes to renegotiation.

  3. Deco

    There is a lot of relevant information for us, in what happened in NZ.

    But, I don’t expect any of it to matter. The Beards were soiling their pants over the fact that a government was going to be elected that would not have a SIPTU/ICTU proxy at the cabinet table. And the far from giving FG a boost, the intervention of Jack O’Connor and David Begg scared some people away from FG and Independents into voting ILP.

    The Beards are still in control.

    I can also tell you that if FG do a deal with the ILP, you can forget about any form of institutional state reform or efficiency/effectiveness drive. There will be lots of superficial gimicks, like the virtual commitments in the Croke Park Deal. The only hope we had of seeing a more efficient more transparent state system was to have FG needing support of Sommerville-Ross. The party machine minced up Sommerville. The beards were terrified that Shane Ross might influence matters.

    This also tells me that despite all the optics setting, and the spin from the ILP, you can expect them to do a deal with FG. Basically the ILP might pretend to drive a hard bargain. But is blatently obvious that Jack O’Connor (their main paymaster) will not under any circumstances allow them to walk away from influencing matters.

    New Zealand wasted a lot of time before realising that their delusions were unsustainable. We will do likewise. The union fat cats still have an unbelievable amount of power, and they know how to exercise power to get what they want.

  4. Deco

    By the way, as a result of compromise with ILP, FG’s 5 point plan will be reduced to a two point plan. The biggest loser of all will be the health system. As things stand IMPACT effectively run the hospitals in the EHB area. And SIPTU run most of the others. The ILP and Gilmore will not end this under any circumstances.

    Gilmore has already stated that he will retain the HSE. Even more alarmingly, his pet project (I have impeccable sources here) is to extend the same central authority model to the education system. It is part of his “one Ireland approach”. One central superquango directing everything. Competition in such an environment is a complete non-runner.

    You cannot learn lessons from New Zealand when you are trying to apply nonsense that you have been craving to implement for all of your adult life. In other words, while NZ faced one direction – there is a strong power base in this country to facing in completely the opposite direction.

  5. Lius


    Is there any way of forcing a section 27 referendum by going to the courts to declare additional funding of the banks excessive for a country with only 1.8m workers.

  6. adamabyss


  7. DC

    John Mauldin outlines the stark future facing Ireland and other heavily indebted western economies in this article.

    In reality the Irish Debt Problem exists only as a subplot to the greater drama playing out all over the western economies.

    The decision that faces Ireland will also have to be taken by Japan U.S. U.K. France etc.

    The consequences of the inevitable boom bust crackup have yet to be fully discussed.

    We had the prophets (DMcW etc)telling us rightly what would happen after the housing/credit bubble bursting.

    We really need to have a similar clear vision of what will happen when the debt bubble pops.

    Kicking the can down the road is an imbecilic strategy that will cause massive social, political, and economic upheaval.

    We must take the pain now to provide for a workable economic infrastructure once the reset button is hit.

    • Deco

      The decision that faces Ireland will also have to be taken by Japan U.S. U.K. France etc.

      The consequences of the inevitable boom bust crackup have yet to be fully discussed.
      Correct. Of more immediate concern is the other PIGS and US states like Illinois, California, Ohio, Michigan, New York, New Jersey, etc…

      Ireland being forced to go into Austerity is an important face-saving exercise component of the strategy being employed that is termed “kicking the can down the road”.

      And it is relevant that you should mention Japan. Because Japan is hitting a turning point with regard to it’s public debt financing, and all those pointless Keynesian stimulus packages that were recycled into more public debt.

      The cost of interbank borrowing has been kept at a low level, via co-ordination of the interest rate policies of the central banks. But, I cannot see it lasting forever. It is causing inflation.

  8. John Q. Public

    There is nobody to ‘act boldly’ for us. This will be a benign government, it will just be there and have little or no effect. There is a range of opinion on how to deal with bondholders from the Sinn Fein/Shane Ross stance who say ‘burn ‘em!’ to Peter Mathews who would probably be the best negotiator (if he is not gagged like George Lee was)but Enda and Co. will just twiddle their thumbs on the issue with a ‘wait and see’ attitude.

    • Deco

      Google “Anglo Bondholders Revealed”.

      And remember the news comes to you, in consideration of the advertising revenues that come on stream to the media organization that is “informing” you…..

  9. Deco

    David – your article is one week too late.

    But if you published it last week, the power of the institutional left would make sure that you were finished. Therefore, in consideration that you actually gave us this, we can forgive you.

    The beards are still in power. It is like the “good ol’ days” when Bertie the Socialist was in power.

  10. Dorothy Jones

    ‘Our only hope is that this new Government seizes the opportunity, and, although we know it will be nasty for the next year or two, it has our support. Go for it.’

    Things change. They do.

    Things have an extraordinary capacity to re-generate under extremely adverse conditions.

    I had given up on them. In their little pots outside. Sometimes covered with snow, but almost always, over a period, with lids of hard ice, over the small amounts of soil beneath. Without any sunlight during the cold dark days.

    But there they were again. Their little yellow daffodil heads bobbing away in the cold breeze; the Trade wind at this time of year. And when this wind settles, the air smells different along the estuary. The soil temperature rises. Things grow again. It’s only a seaside town, but,…. boy,… when it gets the sun…..

    ….Die waesserige Sonnenstrahlen durchdringen diese Stadt; die ersten Knospen sind da……..

    Things change. They do.


    NZ doesn’t have fixed a exchange rate! No chance of Suds and Cox giving the finger to europe.Will the Brits take us back ?

  12. Ive heard from reliable sources that there are stil non-exec bankers working in Anglo on half a mill p.a. We still need to sort this sh*t out as they are effectively public sector workers. Noone seems to be able to do do the maths in this country.

  13. paulmcd

    Latest Heist by Irish Nationwide Building Society

    This is the smallest snatch to date. The 80% discount (so-called) will result in c. 100 euros being snatched from the pockets of every working person in the State.

    If you are a central bank governor or regulator on €350,000 per annum what is €100 here or there?

    INBS is insolvent and the bonds are worthless so the DISCOUNT should be 100%; but the HEIST continues.

    What is Enda going to say or will he reveal himself to be gutless in the face of ECB dictats?

    • Deco

      Somehow or other, with all the bailouts of the too big too fail, I would settle for being robbed 100 Euro from the system, of that put an end to it.

      But, nobody seriously thinks it will.

      There was a massive transfer of wealth to some people and debt to others during the binge era. People were roused up by the entire Property Porn culture thing into thinking that house prices would go up forever. The Irish Times in particular went completely overboard with this propaganda for estate agents nonsense.

      And now we are trying to save those deposits, along with the deposit money held by people who kept saving so that they would some day own a home. Because the bondholders are a really small part of the overall scale of things. Of course low ECB interest rates were an incentive to people to gamble rather than save. Which fuelled a tulipmania type binge.

      We need that deposit base, because without it the capital intensity of the Irish economy would drop, and you would get loand being called up on small businesses. But we are ending towards that anyway.

      I can only say, that if we were not so proud and arrogant, more of us would have been less inclined to beleive all of the nonsense that was prevalent in the Irish media at the time.

  14. uchrisn

    How about leaving the EURO and asking not the U.K but Sweden or Norway to let us use their currency.
    The germans are going to rack up the interest rates over the next couple of years and thats not what Ireland needs.
    If the EU give Ireland too generous terms for our bailout they will have to do the same for greece and then perhaps portugal etc. Their hands are kind of tied becuase they have to answer to their own financial lobby, banks and people so they don’t want Irish banks to defualt on the their debt either.
    In this case the only choice is for Ireland to decide themselves to simply withdraw support from the banks. However Fine Gael will not do this. Cue another bailout when the 45 billion for public services runs out and the banks get worse. Cue Fine Gael failing in the next election. If only they had the sense to see their own futures.

  15. Philip

    We have to make serious changes to the cost of running this country. ILP cannot and will not be allowed get in the way. The elephant in the room is the shockingly inefficient union protected PS. We simply cannot afford it any longer – with or without the bank guarantee. Ditto for all the quangos which cost us umpteen billions per annum.

    So forget about what ILP may or may not do to water down FG…will not happen…and if it does, forces outside our control will force a default and then more mess.

    Die is cast. Change is inevitable. Embrace it.

    • Deco

      The beards made sure that they got themselves in the way last weekend. David Begg (director on the board of the Central Bank of Ireland since – never seen this coming either – “the problem is lack of regulation”) was the first use the phrase “BALANCED” government.

      All last week, one ILP representative after another was on RTE talking about “balanced” government.

      Some local authorities already have this form of “balanced government”. And it is a joke.

      So what is to be done next ? Promote that model of competence to national level.

      ICTU/SIPTU are in control.

      Apart from anything else the institutional survival of RTE is at stake. Therefore a union friendly party must exist at the cabinet table. RTE might be privatised. Last year there was a union conference in Galway. The delegates complained all weekend. RTE brought the story about all the complaining. Ingrid Miley, RTE News.

      They then went to the bar, and spent 48 grand getting drunk off their heads. The story about the all night pissup was brought to us by Newstalk.

      Not a word from RTE. Zero coverage. That is why RTE cannot be endangered. Because they are Pravda-RTE. They uphold the institutional state, and the veneer that it projects.

  16. malone

    Interesting article David. However there is one major flaw in the theory. Yes what you say is correct , it could be done but we are now probally going to be led by the party who snuffed out George Lee and his ideals.He had a new way of doing things but came up aginst a brick wall in Fine Gael. According to Fine Gael there was a set way of doing things and everybody had to follow this.

    Now you put that party with their set ways of doing things in charge and expect there to be major change in the country ? I dont think so

    The other fact is that you still have the same political elite in power , they are all still members of the same club that the Fianna Fail party belonged to and as somebody mentioned in another comment the vested interests still are still right behind the club and have the”beards” the unions in their pockets.

    On the other hand which is new is that you have now the emergenence of Sinn Fein and Gerry Adams will be
    making his voice felt in the Dail as will Shane Ross
    which is a sign of change but unfortunately at the minute they are too few in number.

    As Shane Ross said on television we need in Ireland a new force in Irish Politics and has been also said a number of times here. The old guard of civil war politicans in Ireland like MuBarrack was in Egypt and Hussain was in Libya still hold the majority of power here Imagine for a second the difference if instead of the media spotlight being on Kenny it was on Adams or Shane Ross as possile leaders of the new goverment . The Old Guard would not be slinging back cocktails at 4.00 pm in their offices

    There is one light at the end of the tunnel however
    Fianna Fail got decimated in the election as did the greens. They got decimated because they were shown up to be totally incompetent. Now Kenny and the Labour party are at the helm and and very possibly will face, in their term of goverment, a complete default by Ireland on its debts , sovereign and bank debt which like the volcano is on its way and the huge social upheaval that will come. Whether or not
    Ireland can reduce it interest rate on the IMF loan
    could be deemed irrevalent. Now if Kenny and his gang can stave off ” Juggement Day” then they will have earned themselves an overall majority in the next election . If not they will shown up just the same and will not just decimated in the next election but completely wiped out like the green party were as they will be the ones held responsible for allowing ” Judgement day” to happen”

    Then you will see change, the end of the old order.

    The first word that should be said to Kenny when he takes office as Taoiseach are ” Congratuations on your new command Captain and Welcome on board the new ship . Its name is the Titanic !”

    • coldblow

      Hi Malone. Good post. Just one thing caught my eye though, when you talk about the old guard of civil war politicians. You hear this a lot, as if things would be significantly improved by removing this old guard and somehow remoulding the political setup. The way I see it the political set-up serves particular interests among the population and its civil war flavour is more cosmetic, particularly if you accept that these interests extend back well beyond the founding of the state. J. Lee talks about the possessor principle versus the performance principle. The former applies to land, wealth, and state, professional and sheltered private sector employment sinecures. Somehow we have to reward performance over possession.

      • Deco

        If you look at the changing of the guard that occurred when CJH took over FF from Jack Lynch. Effectively the objective was changed from the performance principle to the possessor principle, across Irish society.

        Also I am reminded of the official reaction to the Roy Keane episode in Saipan. The Irish people needed to be educated/informed in such a way as to completely distrust Keane. Because he was talking about the performance principle.

        The performance pinciple is not relevant to the careerists running IBEC. It is all about the possessor principle. If you possess power, or market rigging/price setting power, or if you can buy media influence then you are able to extract an increased profit stream from this.

        For this reason, deceit is pretty much prevalent. Forget knowledge economy, because deceit is rampant. All that matters is the maintenance of a sufficient veneer to keep people pre-occuppied so that they will not know they are being robbed blind. Beer and Circuses. Europes greatest shopping centre (for a few months). Fuelling your imagination with distraction.

        For this reason the social partnership is at the core of the rot in Irish society. The entire consensus is a massaged veneer hiding massive amounts of corruption, and scandal.

        And, I will tell you now – you don’t know the half of it. And if you did, and you said it here, David would be in serious trouble.

        • coldblow

          I just ended post with the question (before I spotted this): “Will we ever get to the bottom of it” and it seems you are ahead of me there. Not difficult as I’m always the last one to find out. “See that bloke there, the sap who’s coming in the door? Don’t tell him.”

          Also, Lee makes the point that the possessor principle was in charge from the beginning. Crotty would agree. There was never, in Ireland (at least since the Elizabethan conquest and settlement), a prelapsarian state of grace.

        • coldblow

          I need to amend that last post. Lemass had I think, according to Lee, dedicated himself to reversing the roles of possession and performance, so you’d be right to that extent. It’s interesting that Lee also pointed out how dependent and lacklustre Irish industry/ enterprise was over much of the life of the state, at least in the earlier years (can’t find the quote for this), and how the Church in some areas was one of the few exponents of the peformance principle (eg your second-hand Micra-driving nuns). This might invalidate my earlier points in the eyes of some. Et alors? C’est pourtant vrai. The challenge is to hold a number of facts in the mind at the same time – if they appear to contradict each other the pov needs to change as the data, by definition, cannot lie(?) Those arguing with it would presumably feel that the greater good requires the suppression of inconvenient facts, and so on and so forth…

          “Don’t know the half of it” – perhaps you could attempt something in code? Or couch it in a way to avoid legal action, you know the way the Sunday World used to report on Martin Cahill, referring to him as “the man who denies he is the General”.

  17. dymps

    Was New Zealand ever under obligation to a new ‘family’ of countries like Ireland when it joined the EEC, big brothers and sisters lending us money and telling us what we should and should not do with our resources etc. only for their own good. If we pull out default on our debt etc (even go back to our own currency?) will our European brother and sister countries turn their back on us and boycott our new independently run and regulated export trade in agriculture fisheries etc.,
    in retaliation of our ungratefulness…just an uneducated thought from a concerned citizen

  18. coldblow

    Good positive article. That’s all one can do, keep looking for solutions. Rambling post follows.

    I suppose I have an anti FG/Tory bias in me as the pictures of them rejoicing made me uneasy (more fear than hatred, probably just mere dislike), but then again there was plenty of cause for concern the way things were anyway.

    I don’t go as far as Deco above as regards the malign influence of the unions, in fact on the whole I’d take the very opposite view in global terms and see the last few decades as the super-rich rolling back the gains made in the 20th century by ordinary people (maybe he does too). But I also subscribe to the Crotty view that in Ireland the unions have been more about protecting privilege than looking for fairness.

    So while I’d support a radical recasting of the economy and society (seeing as events will force it anyway t’were better that it were done now, as the man said, while we have the means to do it in an organized way) my real concern is that it will be a partial job, with labour very likely to get the worst of the deal.

    I’d want to see the following included: wealth taxed effectively, the law reformed and enforced on the banksters and their fellow travellers, land taxed, pc sacred cows confronted, private schools left to fend for themselves, vexatious and trivial bureaucracy tackled, price gouging and professional fees reduced, organized crime and antisocial behaviour taken on, RTE and the media called to heel, and the abolition of all special cases. Every special case or privilege for one man is another man’s disability. (It’s always enjoyable writing this stuff.)

    Ireland seems to be built on privilege and special pleading at all levels just like (to return to Crotty) all postcolonial states, or so it seems, and so it will be extremely hard to reform. But he could be wrong. Anyway, the process should start from the top, not the bottom. I don’t buy the ‘reduce tax to encourage enterprise’ line in the light of what same “enterprise” has wreaked in recent years, and anyway I suspect it is a lie.

    Only if FG make a sincere effort to take all this on would they have my support in any reforms. Obviously it’s beyond anyone but a start should be made, it just needs to be transparently fair for everyone. A FG/Labour coalition would be very unlikely to do this as they would probably concentrate on defending their own respective special interests.

    I suppose I’m wrong, but as I’ve said before the political “deal” over the past so many years seems to have been: let the rich away in return for ‘soft’ politically correct concessions. My hope is that any new deal is not to let the rich off (again) in return for concessions to the mob (whatever the contents of the new revised pc prayer book are).

    Finally, as David mentioned in a recent article, the plug may finally be pulled on the banks, but only once enough of the middle classes have got their savings off-shore. Let’s be honest, this is a likely outcome, although it would be dressed up in idealistic cliches from the very same off-shorers. We need a trasnaparent register of interests for everyone voicing an opinion (ie everybody). I see the only effective solution in the end as lying in the ECB inflating the debt away via QE along with the value of savings/’savings’. Those ol’ IOUs will just have to take a hit.

    • Deco

      The Chinese workers sleeping at the end of 12 hour shifts need unions. It is about human rights, health and safety concerns, etc…

      But the clowns in FAS, CIE, the ESB, RTE, etc.. are only using collective bargaining to get disproportionate resources from the rest of the population, for themselves. Marx advocated using politics to decide economic resource allocation, and this is exactly what they are doing. When asked, they explain their societal remit. “Education” of the rest of us, and the continual reinforcement of “the policeman inside” is part of the process in making sure that we were compliant.

      • coldblow

        Hasn’t politics always decided economic resource allocation? I agree with your post anyway.

        Here’s an interesting recent post in

        “48. grumpy Says:
        February 26th, 2011 at 8:13 pm
        @Ari from Iceland
        Outsiders will find the wage deflation reality a bit odd. There was a cut to public sector wages announced in December 2009 – when most thought there was a little local, temporary difficulty. Basically that reversed the froth from the peak of the boom only. That was then turned into perma-negotiations about efficiency gains under the “Croke Park Agreement” in March 2010.
        This agreement was subject to the clause that it would not apply should there be “any unforeseen budgetary deterioration”. However the looming election meant every politician had to studiously ignore the fact that there was a whopper of a budgetary deterioration, the IMF arrived and many mainstream analysts consider the state insolvent.
        Some figures here from a bloke who works for IBM:
        All this has left the private sector, student nurses, carers and the disabled as the most economically and politically vulnerable to take the brunt of the income reductions. So you have skewed deflation – skewed away from that part of the wages bill that is a draw on state borrowing, so you get the deflationary spiral but keep the big deficits that shut you out of the bond market.
        There are therefore a lot of people in Ireland in state or semi-state jobs which are among the highest paid in the Western World, who have very low interest rates on mortgages – many with trackers which are very very low – who are actually economically better off than they were a few years ago as their purchasing power goes up.
        Many, probably most Irish people assume this is sustainable under Euro membership and this is why the country in in such a weak position to “renegotiate” with the EU and IMF. They will not jeopardize this, they will have to actually see it demonstrated to be unsustainable.
        Personally I’m with the Keynesians on this generally, but Ireland has such a perverse economy that what would normally be the “left” actually ends up sticking up for overpaid inefficient, entrenched, stifling semi-elites that are actually some of the most privileged in the country. This is probably something an American would find hard to imagine.
        I think default and / or/ devaluation would be exactly what Ireland’s insiders would want – so they could continue, business as usual.”

        I don’t understand the last sentence, I’d have thought it would be the opposite.

        Some interesting discussion on the same thread about the merits of leaving the euro, internal vs external devaluation etc.

        Even accepting these arguments I still think looking exclusively at the public sector is missing out so much. For example, remember my earlier post about how it was impossible to recruit CS staff at CO level in Dublin in 2001 (there was a Prime Time piece about it and this was backed up by my own experience), albeit before bench-marking, as the pay was too low for people to be able to rent and eat simultaneously.

      • coldblow

        This post from the same thread shines some light on maybe the real (as opposed to “semi”) elites (also seeing as David mentions the legal profession in his article):

        “36. Michael Hennigan – Finfacts Says:
        February 26th, 2011 at 8:50 am
        @ The Alchemist
        I have said many times that the culture is one of grabbing as much as possible from the public purse, while the going is good.
        It’s more exciting then to get Johnny Foreigner to pay up when the till is empty.
        People investigatiing corruption were overpaid €1m because of a clerical error and the money wasn’t paid back.
        The Oireachtas Public Accounts Committee published a report the day the GE was called and it shows that public bodies are the largest procurers of legal services in the State with an estimated spend of anything up to €500m.
        The Committee said it heard evidence to suggest that the cost of legal services in Ireland is amongst the highest in the developed world and it has been suggested that the State itself is one of the primary drivers of high legal costs.
        Overall, the report stated that the likely cost to the State of three public tribunals based on the pattern of costs experienced to date is estimated to be in the range of €336m to €366m.
        The Committee also reported that five of the barristers working for the Mahon (Planning) and Moriarty tribunals earned in excess of €5m, with two of them earning almost €10m.
        The Committee referred to “three senior counsel at the Moriarty Tribunal being paid €2,500 a day for an extraordinary 304 days in 2008. The Moriarty Tribunal sat in public session for an average of 20 days in each of the past three years. The report advised that there were no specific attendance records for the legal teams maintained at the Morris and Mahon Tribunals. The Moriarty Tribunal records attendance of tribunal legal team members but does not take account of arrival and departure times.”
        The Committee “was exercised to learn that at the Moriarty Tribunal, an extra €1m has been paid to counsel because of an error in the Department of the Taoiseach, where counsel have been paid a per diem rate of €2,500 instead of €2,250 and where the matter was allowed continue without rectification.”

        So we have the legal profession. Then there’s the financial people and related professionals, insurance, builders and tradesmen who were creaming it, farmers, media, rentiers…

  19. EOC

    Great article as usual David but I’m afraid we will have to dream on. We all know this will never happen here. We are currently waiting for Portugal to fail so that the EU can solve our problems for us. There will be no bold steps from any politician on this island. A civil servant has just described self employed people to me as “leeches on the state”. Thats what you are up against I am afraid.

  20. Deco

    There is a big issue made of the Civil War.

    If you look at a map of England you will see that the Conservatives get most of the vote that sided with the Parlaiment in the English Civil War in the 1640s.

    Scotland and Northern England – which fought for the Royalist side votes predominantly Labour.

    The South West of England, and the Welsh borderlands vote predominantly Lib Dem.

    In the US the Republicans could not get elected to any state in the former Confederate states for 100 years, voting solidly for the Democrats, in contempt of Abe Lincoln.

    Not too sure that it will end that quickly.

    To be honest, on reflection, it started over very little in the first place, and might have stopped faster if the leaders decided to talk it over. Bear in mind that the pragmatists at that stage are the idealists today, and the idealists back then have given us the pragmatists today, who are arguing that the IMF deal is a good deal which will give us back the sovereignty we seek.

    Another complicating factor is the fact that the practically the entire leadership of the current left in Ireland consists of people who held extreme views on the Northern question, at the height of the troubles. The left in Ireland are not as immune from the issue of the Civil War, or the more recent Civil War (called the Northern Troubles) as their publicity department would have us believe.

    Maybe the real purpose of FF was to lose one civil war, and prevent a far more serious and explosive one two generations later. And maybe now purpose is done.

    • Deco

      The South West of England, and the Welsh borderlands – which were evenly split in the English Civil War, today vote predominantly Lib Dem.

      What I am saying is that there can be fundamental perspectives concerning authority, that can last a very long time.

  21. adamabyss

    Not getting any notifications of posts by email. This site is a shambles in terms of functionality.

  22. paulmcd

    Iceland Planning to Improve Its Lot

    Pity the Greens did not have the imagination or vision to argue that the 35 billion euros which has been dumped into the Anglo/INBS black hole should be channelled into massive alternative energy projects.

    Based on estimates I have been given for a single wind turbine built at a cost of one million euros capable of providing for the annual power consumption of 200 homes we could in theory have put up 35,000 such turbines capable of generating power for 7 million homes.

    Bondholders could have been obliged to participate in this venture and receive savings from the fact that we would no longer need to import fossil fuels and in fact could have become net energy exporters for up to 5 million homes in UK and European mainland.

    • paulmcd

      I have been a Green Party voter but will,in future, only support the Party in local elections.

      The wipe-out of the Greens at national level is regrettable but was inevitable and, in the final analysis, well-deserved.

      If the history of war reparations and the bailout of AIB’s Insurance Corporation of Ireland debacle are anything to go by, the best we can hope for is a 65-year time span to elapse for final settlement of accounts.

      The State’s liability for ICI-related claims remains operative until 2050. No doubt we will continue to pay the Government Levy on insurance products indefinitely thereafter.

      • adamabyss

        You also need to get rid of that charlatan Gormley as your leader too paulmcd, if the party wishes to regain any credibility (unlikely).

      • paulmcd

        I voted this time for an Independent who had made the separation of banking debt from sovereign debt an absolute priority.

        I do not like the idea of voting for Sinn Féin/IRA; but, under a first past the post system, I might well have been obliged to award Gerry Adams my one-and-only vote.

        FF/Greens have done more economic damage in the past 3 years than Sinn Féin/IRA over 3 decades.

        In addition, I believe that the number of suicides over the coming 3 decades which would be directly related to the dire state of the economy and lack of opportunity will greatly exceed the 3000 violence-related deaths during the Northern ‘troubles’.

        • adamabyss

          That was exactly my rationale when trying to persuade my mother to give Eoin O’Broin (SF – Dublin Mid West) a no 1. vote (she gave him no. 2 in the end). SF would charge the likes of Bertie Asshole Ahern with Economic Treason. He is certainly personally responsible for more deaths than either side in ‘the Troubles’.

          • paulmcd

            I believe that there are untold tens of thousands who voted in the same way as your mother and the fact has not been appreciated because it may not have been necessary to distribute the no 2 votes.

            If FG-Labour were to provide a CONTINUITY-FF form of government, we will all be losers bar the Sinn Féin political movement.

  23. paulmcd

    I watched PRIMETIME’S interview with Prof Honohan tonight – what a waste of time, and, yes, I should have known better!

    I feel Patrick Honohan should have been shown the replays of quotes/misquotes one-by-one and asked to confirm EXACTLY what he said or wrote in each instance.

    His evasiveness was an obscenity when one reflects on the fact that we pay him circa €350,000 per annum – 2 times the salary of Bernanke. What’s happened to ACCOUNTABILITY?

    I have lost all confidence in PROF. HONOHAN:

    He fails to acknowledge that the United States will recover more quickly thanks to banking failures, especially the systemically important and critical failures of Lehman Brothers and Bear Stearns.



    The bondholders in Irish banks took a risk and they lost, unless they had insured themselves. THE IRISH TAXPAYER DOES NOT OWE THESE FUND MANAGERS ANYTHING AND MANAGERS WHO ARE TRUE PROFESSIONALS DO NOT EXPECT ANYTHING.

    • Deco

      Honohan’s position at the moment is that the truth is bad, and he cannot reveal it. Nothing against the many. He got landed in it, along with Matthew Elderfield, Lenny, now Kenny and the population as a whole. But he has to maintain the veneer.

      • coldblow

        In connection with the bank bailout here’s an interesting anecdote from a recent post to irisheconomy (sorry for the spate of these today but they are interesting):

        “40. grumpy Says:
        February 25th, 2011 at 4:27 pm
        @Andrew S
        I was asked my view on whether an Irish bank might go under and whether deposits might be at risk back in mid summer 2008. My line was that they all were in theory but in reality the state would have to step in and nationalise or preferably liquidate and move the business on from AIB and BOI if they were stuffed because they were too important for the economy and had too many customers.
        My exact wording wrt Angllo was “Anglo though, who the feck needs Anglo? They will have to let that go under and the deposits could go with it.”
        The bonds didn’t even come up because they were obviously going to have to take a hit and anyway they were already out there and it was just pass-the-parcel.
        I am fairly cynial in general but was outdone here, because the reaction to my view was along the lines that although I might be right in theory, I just didn’t understand how small Dublin was and that it would all come down to who had money where.
        There has been a cadre of naive decision makers and advisers inolved in this farce from the very beginning, combined with the likely fact that they were all pulled from the constituency of “true believers” so they never really got round to the idea that they might have to do some off-consencus thinking. Some probably wouldn’t know how to.”

        “…and that it would all come down to who had money where.” This is what I have always suspected. Will we ever get to the bottom of it?

  24. MK1

    Hi David,

    I hope you had a good election, although I didnt hear did any of the New Vision candidates get in? Politics is a long-term ‘game’, or should be.

    I agree that reform of many areas is required. Our lists of problems are long. Lance The Boil = Reform.

    DavidMcW> Can you imagine Ireland introducing something as logical as a ‘no fault’-based compensation system for personal injury?

    well, I wish tere was. People fail to realise that large payouts is a zero-sum game (mathemtically) so those that domnt benefit must pay those that do. Payouts can be warranted but its the amounts that are crazy.

    DavidMcW> forcing all public servants to take individual contracts to reduce collective bargaining and removing the ban on firing public servants might not be exactly what is needed here, but it does suggest that it can be done.

    This IS exactly what is needed here. Without carrot and stick, us humans are a lazy inefficient shower! I cant remember your 10 point ‘manifesto’, but this should have been one of the points, if not no.1!

    DavidMcW> Our only hope is that this new government seizes the opportunity

    Yes, I agree. This new government has an opportunity to change many things and due to the nature of our situation many (or a lot) of the faults, could be rectified. It will depend if they have the wherewithal, the leadership and the mantle to do so. Sometimes in life people are not qualified to do a job, but once in the job they can excel. All of us should give the new crew, and they have many failings from past records, a chance.

    Lets see what they can do ….


  25. Deco

    Well the big news this morning is the Wright report.

    Bertie Ahern was not listening to the DoF – he was reading the prognostications of Dan McLaughlin (and Austin Hughes) from the IT Business Supplement every Friday.

    The astounding thing about Ahern is that on the one occassion when McCreevy decided to rein in spending, and encourage people to save their money – he got lamabasted, castigated, plotted against. And then Ditherer sacked him.

    I can remember 2003-2004. The social partners, the media and the rest of the cabinet all decided that McCreevy was going down the wrong course. When McCreevy refused to budge, and produced such unsympathetic statements like “throwing money into the Health Service is not making any difference” there were massive calls for him to be moved. Ahern duly obliged. He bough Cowen in charge. And Cowen “delivered” for IBEC-ICTU-CIT-etc….

    It also proves that anybody who is waiting for Morgan Kelly to tell you that you are in a boom will be informed far too late to do anything about it. In fact you cannot rely on the public discussion on these matters.

    Bertie the Socialist, and the bankrupt economy. Let’s face it Ahern was a proxy for a collection of vested interests who wanted their own objectives met regardless of the consequences to the rest of us.

    It really pays to be extremely sceptical of authority and the media in this country. “Support our advertising sponsors”.

  26. Deco

    This is what the Wright report had to say about social partnership (aka IBEC-ICTU running the country).

    Basically, what I have been saying for a long time, and what many others have also been saying.

    It is a failure.

    Now, can we see Shane Ross, Donnelly, Ming, etc.. talking with FG, so that we can have government without ICTU-IBEC in the back seat ?

    • Deco

      No back seat drivers. At the behest of our advertising sponsors we repeatedly hear about Independents being “high maintenance”.

      The fact is that IBEC, ICTU and the social partners greatly resent governments that depend on independents to carry them through. They make it obvious that government is all about horse trading, which incriminates their behaviour.

      How exactly should we define the cost of keeping Jack O’Connor sweet, along with David Begg, and Peter McLoone ? Based on track record they are very expensive to “accomodate”. The Healy Raes bring a shopping list with potholes to be fixed, and cheaper insurance for young people. Finian McGrath wants better performance of the Health service. Ming wants Bord na Mona to use less peat, and wants individuals with bogs to be able to cut their own. This is all trivial stuff from a state administration that is chronically inefficient and sloppy. A lot of this is stuff that should be happening anyway.

      ICTU and IBEC both functioned as backseat drivers for much of the last ten years. This model has failed. It is a serious compromise to democracy. It should be binned.

      • Deco

        I should also include the cost of keeping Danny McCoy, Turlough O’Sullivan, and Tom “now is a great time to buy property” Parlon happy !!!

  27. It’s great to finally see that our friends in FF consistently ignored the best quality advice.


    Is it just me but has anyone else noticed that some Irish people think there is an inherent fault in getting outside advice?
    Is it a type of insecurity but I’ve often been at meetings where I might suggest we talk to somebody “who’s done it already” only to be told we’ll do it ourselves?
    There is also a line in yesterdays report that says the Dept of Finance should welcome the opinions of external Economists – Which strongly indicates that the external Economists are most unwelcome along with their opinions!

    • Deco

      A bit of a pattern developing here. Pay for advice, and then ignore it because it does not suit your political requirements (or those of the main vested interests).

  28. Didya see the Primetime interview with Prof Honahan last night. As we all know Honan is governor of The Central Bank, a banker. If you missed it,

    I’ve previously compared Prof Honahan to Lord Cardigan who led The Charge of the Light Brigade:

    “Cardigan survived the battle. Although stories circulated afterwards that he was not actually present,[7] he led the charge from the front and, never looking back, did not see what was happening to the troops behind him. He reached the Russian guns, took part in the fight, and then returned alone up the valley without bothering to rally or even find out what had happened to the survivors.”

    So the Professor was treated deferentially by Richard Crowley on Primetime. The questions put to Honahan were excellent. But Honahan’s answers were not challenged enough and so Honahan got a free platform to lecture the government and us all. This morning Sean Whelan and Áine Lawlor took this to an elegaic level in viewing us Honahan’s views.

    Basically, Honahan’s views are as follows: 1. burning bondholders is out; 2. renegotiating the IMF/EU deal is out apart from some vaguely nuanced shading to be wrought from careful negotiation; 3. negotiations to refactor the deal will be done for decades to come by future governments to adjust it to provide for growth in the Irish economy.

    ‘But we’ve just heard that tune sung by FF’s Micheál’, you say! Yes, word for word. But Honahan here is directing his imprimaturs at the incomings. We don’t want them stepping out of line, do we? The pressure is on from Dukes, John Bruton, Fitzgerald,
    and others lying in the grass, to back the banks and screw citizens.

    Should we listen to Honahan? Well, no!

    Honahan is the guy who got Nama to look at Anglo’s loan book and gave us Spring 2010 a figure for Lenihan of €3 bn that by Sept 2010 had Lenihan about-face to a figure ahemmm, had risen to €34.5 bn of toxic debt exposure, according to the rating agencies. But if you listen to Alan Dukes, there could be another €10 – €15 bn of toxic debt on top of that, we’ll find out from March stress tests!

    Honahan is the guy whose view was that the IMF/EU would not need to intervene in Ireland. That Ireland’s debt was manageable.

    Wait for it, Honahan was Our Lord Cardigan, who led the negotiations that gave us our death rate of 5.8%. Honahan is the guy telling us the Russian guns will be fine tuned not to annihilate our economy, because if they do, they’ll have nothing to shoot at.

    FF who believed this ridiculous guff have been rightly annihilated for believing it. If this government is serious about dealing with the banks, first in the firing line should be Honahan. With him in charge, we risk annihilation in coming negotiations.

    We need a new Governor of the Central Bank of the calibre of Ólafur Ragnar Grímsson, President of Iceland, Bo Lundgrum of Sweden, or as DmcW writes:

    “In 1990, the incoming National Party government of James Brendan Bolger, the son of immigrants from Gorey, faced exactly what Enda Kenny will face today: a banking crisis. The largest bank in New Zealand needed to be bailed out after Australian mortgage loans went bad.

    Bolger injected capital into the bank only after forcing the bank and its bondholders and shareholders to take losses.”

    If we follow Honahan, this country will face catastrophic default. If we initiate a fair restructuring of our banking system on the basis of burning bondholders with debt for equity swap, we can both save bondholders and this country.

    Otherwise, don’t bother to bring a paddle, we’re goin up sh.. creek.

  29. ex_pat_northerner

    A question to those who know a bit more than me.. but if a bank/bondholder made an investment (loaned money) to Anglo or AIB, would they also not take out some sort of insurance ? When we say “burn the bondholders” surely we’re saying let them claim on their insurance ?
    Or do they “self insure” ? Is there any figure for how much of this money was insured, or is that deemed “financially sensitive” ?

    • irishminx

      I read somewhere ages ago that the Banks and bondholders DO have insurance. I haven’t been able to clarify if this is true or not, so didn’t ask the question.

      Good question and thank you for asking it. I too would like to know the answer.


  30. [...] calibre of Ólafur Ragnar Grímsson, President of Iceland, Bo Lundgrum of Sweden, or as DmcW writes “In 1990, the incoming National Party government of James Brendan Bolger, the son of [...]

  31. wills


    Article reads an interesting case.

    Ireland to follow New Zealand s example has to extract the levers of power away from the insider elites before any of these ideas can be implented.

    Any ideas on how to do that ?

    Cos the political system and the economic system rigged as it is and over run with crony networks as it is are all standing in the way of every idea above outlined in your article.

    So before we live in a hope of a worthiness and innocence one must face the reality of the underlying dynamics blocking the reformation the outsiders demand.

  32. Maeve Harrison-Barbet

    Dear David,

    Are you suggesting we follow NewZealand’s line of attack? And, would that work given the new Government we now have?

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