All over? November 18, 2010
Posted by Scandalcentral in Banking & Finance, Current Affairs.Tags: Economy, IMF, Ireland
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So it’s true. The IMF have arrived.
The ultimate shame has hit Ireland. Many months ago we laughed at the Greeks, the whipping boys of Europe. Today we join them, maybe even requiring a larger bailout than even they needed. The only words that each Irish person should feel tonight is shame, embarrassment and anger. The sight of John Bruton is tears on the news earlier truly summed up the dire situation we are in. The lack of a co- ordinated Government response is horrifying. Brian Cowen today appeared to continue the charade that the IMF are only tourists here on a holiday. He appeared lazy in front of the media declaring that the Government was in control and would smooth this bump over as if we had a flat tire. The truth is that the wheels fell of this vehicle a long time ago.
What’s even more amusing is the reaction of the people, which has been totally converse to the Greeks. Greece, once bailed out, hit the streets to protest. Civilians were killed in the mayhem. Here, there is no talk of protest. The Irish people appear willing to accept that there is no other option. The idea that we as a nation can accept the presence of the IMF with such grace highlights the sheer welcome this nation gives to any visitor. Even when down, we still offer the Cead Mile Failte to our guests, even if they possibly might end up slashing and burning our public sector. I must say I do feel proud of our nation as to our reaction, pride is very far from what I feel for the Government, developers and bankers tonight.
The question of sovereignty tonight is key. The debate over whether we would retain it or not has already begun. In my view, if the country does get bailed out to the supposed tune of up to €90 billion, we couldn’t surely retain budgetary control. Naturally, it appears the Government is willing to sacrifice everything except out corporation taxation rates. I personally find this a little difficult to stomach. Are we as a nation really going to protect that one sector while potentially closing hospitals, schools, cutting nurses etc without any issue? The coming days will make clearer who bad things are and how severe the sacrifice of the Irish people will have to be.
Drowning as a nation?
Schering- Plough: Some commitment! September 9, 2010
Posted by Scandalcentral in Current Affairs.Tags: Cork South West, Economy, Job Losses, Recession
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Schering- Plough based at Brinny, just outside of Bandon town in West Cork has once again announced a raft of job losses as it struggles to compete during the recession. Today, it announced nearly 170 job losses. The plant manufactures pharmaceutical drugs for Hepatitis C and Rheumatoid Arthritis. Today the plant employs 519 people, this will be reduced to around 350 staff. This is a fall from 1,000 only a number of years ago. These job losses have huge impact on the most Southerly region which has been forgotten by Government for decades. The region itself has little prospects and this hammer blow will hurt it greatly. The company hopes most the job losses will be voluntary. Once again Councillors and local public representatives are calling on the Government to act to help bring jobs to rural Ireland, which is continually being forgotten.
Schering-Plough Site Director John Howell also said that “a transformation programme, which the company is going through, presented everybody at the plant with an opportunity to secure further investment at the site in the future” This follows after Schering-Plough, last year, merged with the multinational pharmaceutical company Merck in a deal valued at the time at $41bn.
Once again the company’s long term commitment, must be questioned.
SME package, too little, too late! July 14, 2010
Posted by Scandalcentral in Banking & Finance, Current Affairs, Politics.Tags: Anglo Irish Bank, Bank Recapitalisation Scheme, Credit Crisis, Ec, Economics, Economy, NAMA, SME
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The Government has announced yet another plan to get credit flowing to SME’s this week. In my view, this plan is yet another miserable, failed attempt by this Government to get credit flowing. It comes 18 months too late, late as per usual. Why is it now the Government reacts when the situation reaches desperation point? Over the past year, while the Government has been fixated by the banking crisis, it has ignored SME’s and their dire inability to access credit. It has ignored the indicators which suggested that jobs were at risk, due to Government incompetence and ignorance over this issue.
The sad reality in relation to this plan is that it still, may not get credit flowing. The banks are out for themselves, they always have been and always will be. This Government seem’s to only be waking up to this reality around now, a shocking indictment of a failed coalition. The banks have cared little up to now to what the Government has ordered, so why now should anything change? The Minister seem’s to think that our endless bailouts will compel the banks to act, a foolish assumption by a Minister of Finance who now carries very little respect or authority.
The Minister himself has been found to be bluffing so often in relation to Government banking and fiscal policy over the past 24 months, it’s truly shocking. The Minister claimed that the bank guarantee scheme would prove to be the cheapest of its kind in any country, this has now proven to be the total opposite. We were also told that very scheme would get credit flowing around the economy once again, a promise we are still awaiting to turn true. We were guaranteed by Minister Linehan that NAMA would beckon the banks to resume business as usual, this sadly has also fallen through. Even more recently we were told that the vision of profit for NAMA was a total delusion. The common consensus is now that Linehan is out of his dept and is now making one last attempt to kick-start the credit. It’s very clear that under the current administration things have got a lot worse before they have got any better. At every hurdle, this Minister has failed to deliver on his promises. His word now rings very hollow indeed. Hence this weeks announcement must be taken largely with a sizable pinch of salt and holds little water in my eyes.
It is simply too late and is not enough from a Government which has been chromotised by an ever growing banking crisis. We now lie in ownership of a zombie bank, in the form of Anglo Irish Bank, for which the Government all along denied that it would end this way. We also own must of the rest of the banking system, which must be threatened to engage in business. It’s clear to me that we can’t trust the banks. It’s only this week the Minister appears to have realised that simple fact, for which the dogs on the street have known for some time, after the initial performance figures quoted by the banks were found to by grossly under stated.
Sadly this package is far too late for the thousands of firms who have ceased trading while the Minister dithered. On a day in which the ERSI confirmed that by next April 120,000 more will have emigrated and that employment will remain stagnant until at least 2011, it is sad that the threat of that double dip recession remains. For it’s quite clear that Ireland and the Minister is finished if that particular doom’s day scenario does come to light.
What this nation has needed and is still in need of, is real decisive action. The banks should have been forced to lend a long time ago. Or the Government could have listened to Richard Bruton and provided €2 billion for businesses through the existing wholesale banking system as he suggested a long time ago. Instead we are now placing the gun on the banks, the sad situation is if they turn the barrel back on us. Your play Minister.
Recovery begins, unemployment worsens! June 30, 2010
Posted by Scandalcentral in Banking & Finance, Current Affairs, European Affairs, Politics.Tags: ECB, Economics, Economy, European Central Bank, GDP, GNP, Live Register, Quantitative Easing
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The CSO today confirmed that Ireland had technically exited recession. However hold the champagne, we have only left recession based on GDP. GDP includes profits made by foreign multi-national companies. In relation to GDP, the recession continues. GNP fell by 0.5% in the last quarter and over the 12 month period dropped by 4.2%. Personally I feel GNP to be a more accurate measure of growth for the Irish economy and hence I don’t believe the recession is over. The GDP figure today saw growth of 2.7% signalling positive movement with foreign firms based in Ireland. This is positive as it gives arise to hope that they may now begin expanding their operations and hiring new staff. This is clearly only a hope. Excluding those firms, domestically things are still declining. However GNP is usually not far behind GDP, so I would predict that this too would exit recession towards the final 2 quarters of this year.
But regardless of the growth positivity the employment situation has continued to worsen. 452,882 (444,900 when seasonally adjusted) are now signing onto the live register- a shocking indictment of the effects of the recession. It is also a clear indictment as to Government policy. They have totally forgotten the now nearly half a million people who cannot find work and are failing to offer any real solutions. There have been no stimulus packages, no real re-education scheme’s and overall no innovation from the current Government. An even bigger issue is that they don’t appear to fully understand the scale of the issue. Batt O’Keeffe was on the papers last weekend hailing an announcement of 50 new jobs (Some of which turned out to be existing)… even say there was 50 new positions, 50 jobs? With nearly half a million unemployed! But that is the kind of innovation we are getting from Ministerial level at the moment. The DAA last week announced 500 new jobs for its Terminal 2 project. Yesterday we found out that in only a number of days it has received over 9,000 applications! Some of the positions are as simple as cleaning jobs, but it proves people are willing to do anything right now just to get employment.
The figures today also highlighted how far behind are youth have been left by this recession, over 91,000 of those on the Live Register are under 25 years. The vast majority of those are sadly male. It is our youth which really could do with a major stimulus package and not some irrelevant FAS course on basic IT. These facts appear to fall on deaf ears within the walls of Dáil Éireann. Yes to be fair Fine Gael produced their plan to tackle youth unemployment and naturally the Government failed to implement it, however the point is, when will the Government actually produce their own plan? Why this week was Government time wasted discussing a pointless Wildlife Bill that affects few in this country when we have nearly half a million seeking work? Why are the Green’s not pushing for more Green jobs? Why is Fianna Fail chromatized and seemingly unable to come up with idea’s to tackle the purge of unemployment?
The economic facts are clear, the economy is beginning to move again but we are in no position to take any benefit from this, aside from slightly better exchequer returns (possibly) over the next 12 months. The unemployed will remain unemployed for some time to come. The social unrest will continue and families will continue to struggle to provide for themselves. Even more of an issue is that businesses will continue to struggle. Many are in trouble simply because they just can’t get credit. It was this week pointed out that it is a disgraceful scenario for the Government to own more or less all of our banking system and yet not be able to force these banks to offer credit to our businesses. For it is these locally run firms which will help us emerge from recession, grow and create new jobs. Ireland is an open economy and therefore our exit to this recession must be in an export lead recovery. It is true to say that trade was up in the current figures by €2.6 billion against figures from last year. This pattern of trade expansion must continue so these gains can benefit the wider economy. The multiplier effect would then allow indigenous industry to grow and expand. Ireland’s short to medium term strategy must be based on indigenous firms, for they will support communities and restore pride to many area’s which have been hit hard by the economic hardship. However this will be hard to achieve with the banks having their doors firmly shut to those who need them most. While the obvious solution might be for the Government to push their weight around, this may not happen. Another solution is quantitative easing. This is a form of monetary policy in which the European Central Bank would start “printing money” or essentially buying bank bonds and paying with money that it has simply ‘created’. This would indirectly increase the amount of money in the economy. The increased money supply encourages banks to lend money. It was done in Britain and in the US in the 2008-2009 period.
It has also been used regularly in Japan in the past. Concerns lie in relation to the inflationary pressures it creates, however it is my belief (shared by certain economists) that when used appropriately it wont have a negative effect. In the past it was used poorly for example by Zimbabwe, which resulted in hyperinflation. If used in Europe it should be noted that the ECB couldn’t buy Irish Government bonds, for this would be financing national deficits from producing money from thin air, which clearly would be a very dangerous thing indeed. However the ECB could buy bonds from the Irish banking system. (and even in turn, the Government could buy or sell them back off the banks) Naturally too much of this would lead to serious inflationary pressures something which rip off Ireland certainly doesn’t need. However the chances of quantitative easing are slim. The ECB is based on the Budesbank and we all know the Germans are allergic to the sight on inflation, unless it’s a crisis they wont try it. This means Ireland is all alone, on the periphery of Europe, fighting this battle firmly in isolation, with unemployment continuing to rise. It’s no surprise therefore that hope is lost on the ground and the Live Register is now at a mind-boggling 13.4%.
Things can only get better? June 26, 2010
Posted by Scandalcentral in Banking & Finance, Politics.Tags: Austerity Measures, Budget 2010, Economics, Economy, Euro, Honohan Report, IMF, Recession, Regling Watson Report
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Clouds building over Euro-states?
The past few weeks have been somewhat shocking in terms of revelations. Both the Honohan report and the Relging-Watson report pointed the blame for our economic collapse at the doorsteps of Government policy, reckless banking procedures and lax regulation. The Government has defended itself by stating that they genuinely didn’t know any better and that they acted based on fatally inaccurate assumptions from different organisations like the OECD and even the Central Bank. Equally, they have tried to deflect all attention from the blame element of the reports to the slight commentary which praised the Government for its fiscal measures in the last number of budgets. In recent day’s the Government returned to the famous hymn sheet of “things are getting better” and that the Government has weathered off the recession. I fundamentally disagree.
Personally, I’ve grown tired of hearing this tripe about things improving. The simple fact is that it will take a long time for anything in this country to improve. I even wonder if the Government fully realises how long it will take us to overcome this massive crisis. For this has not only been a banking and fiscal crisis, it has been a crisis of faith and most definitely a crisis of belief. We have lost belief in ourselves, something the Celtic Tiger created. It made us feel invincible meaning when we were to fall, we were always going to crash. It also means that building the house back up will take a lot of time. The first step I believe is honesty from all parties.
Many people in this country don’t understand what has actually happened to the economy. They understand it has crashed and they understand who is to blame, but in many cases they are ignorant to the effects it will have over the next number of years. The opposition parties claim they are dying to get into Government to solve the crisis. It bewilders me as to why anyone would want to tackle this complete disaster nothing short of a basket case. Lets talk simple numbers. This week Ireland was borrowing a at dizzying 5.6% on our sovereign debt. We share the same currency as the rest of Europe and hence by extension to this theoretically the same level of risk, yet Germany is managing to borrow at 3% less than us. This has been the case for some time. The key worry is that the gap isn’t closing. The Government claims it has a handle of our fiscal crisis, yet why have the markets not reduced our borrowing costs to reflect this view? Perhaps because no one actually believes their Bertie-like spin. The next budget is approaching fast and it will be easily the worst budget in the history of the state in terms of pain to be felt by citizens of Ireland. The “Croke Park” deal has ensured that the public service must be spared all pain this time around meaning that other and in many ways more contentious issues must be tackled. So far the Government appear slow to reveal how exactly they will chop another 3 billion off our expenditure. It has been suggested that the old age pension might be cut of even scrapped. While I might be all for fiscal prudence, but there is no way that would be socially acceptable. Many in this country rely on the weekly pension as their only means of survival. The Government is acutely aware of this but will play its cards well so it secures a sizable cut to the state pension. Either way, if we are talking about the old age pension it means options are very sparse on the ground. This naturally lead us back to the McCarthy report, a report gathering dust which may (Will in my view) have to come into play. Right on cue, Colm McCarthy himself this week warned that as long as our borrowing remains above 5% things will remain “challenging”. However he failed to expand on what he refers to when he says challenging. One would have to assume that he is insinuating that unless the cuts continue the markets will not regain confidence in us.
Also right on cue the IMF have given their 2 cents declaring that “Staying on target is critical”, warning that now is not the time to be backing down from the continued austerity measures that must be implemented if Ireland is to reach the holy grail GDP target by 2014. One massive obstacle remains, which the IMF and also the OECD appear totally aware of. The Government is ignoring this scenario, but I wont. The IMF this week also gave this stark warning to both the Irish people and to the Government, even if the media seemingly ignored it. The Armageddon scenario is where GDP growth levels are lower than currently foreseen. For it is on these figures that the Government has made its predictions of how much cutting it must do over the next four years. If GDP is slightly lower than predicted it would mean the Government would have to reduce its spending by even more. What effect could this have well, to quote the IMF …“a fraying of the necessary social cohesion cannot be ruled out. For this reason, greater specificity on further proposed measures is necessary. Sustainable expenditure savings will be central, including through efficiencies in public services. Broadening the tax base for revenue enhancement will also be necessary” They have made it quite clear that many of the McCarthy proposals which have been sidelined now must be re examined, including the key public sector reform. The only political party which seem’s to really understand what that means is Fine Gael. Labour have continually failed to comment on what it would actually do, while the Government appears scared of its life of the Trade Unions. But serious reforms are a necessity. When the HSE was set up, nearly all responsibility went to them from the department of health including the management of our hospitals. Yet the Department of Health still exists in the same form as pre-HSE, yet now it’s only portfolio is of general health policy. It’s my argument that this also should be HSE territory and that the Department of Health should be disbanded. Just to quote you the figures, over 500 of the 650 staff have been retained. Ironically, the HSE has hired nearly 2,000 new management and administrative staff up to when the hiring embargo was placed. The claim is that the Department is solely responsible for the development of health policy while the HSE simply run’s it ship accorded to these rules. Duplication is rife, there is no doubt of that fact. This is yet another example of Government waste, but more importantly another example of inaction. If we are seeing inaction due to the unions, then that is disgraceful. Those that set up the union movement have only helped to destroy our economy along with the bankers and politician’s. The other key change the IMF hints at is the tax base. This can interpreted in some many ways, to quote Shakespeare “A devil can cite scripture for his own purpose”, how right he was. For Labour will claim this backs up their idea of taxing high earners into oblivion. Except they don’t call them high earners, they call them “The Rich”. For the Government (and to a degree Fine Gael) it backs up their idea of bringing some of the bottom 1/3 of workers, who pay no tax at all, into the tax system. I’m sure where Fine Gael and the Government will clash is how it should be done and how many should be brought into the lower rate of tax. I personally believe a third-rate of tax should be introduced of (roughly) 15% for the top half of the bottom earners. However I don’t believe anyone earning less than say, 17,000 per annum should be taxed. It’s unclear what the Government will do in this regard and only time will tell. Either way, don’t expect Labour to commit to anything!
The next budget is going to be very tough for the Government to get through Dáil Éireann but so will budget 2012, 2013 and 2014. The interest we are and will be paying on our borrowings is going to continue to cripple this state for a long time to come. Much of the public doesn’t appear to understand this. What I find quite humorous is that more and more of the electorate are siding with left leaning parties, but I fail to see how they could possibly be in Government when massive cuts must be made. I can’t see Joe Higgins helping our his “workers” by reducing their tax credits or health benefits or shutting Garda stations or any of the other measures that will have to be undertaken. I equally struggle to see Labour sitting in Government, simply because I don’t see what they can do in the current economic environment. (Some policy documents would help us Gilmore) Labour and even socialism can work in the boom, but during a recession there must be austerity measures to ensure the future of Ireland, the Euro currency and fend of the dreaded IMF. I trust that the right-wing parties will do that, I don’t trust the left. However in a somewhat oxymoron, I also feel that the current right-wing government is not being fully honest with the people as to how cutting the next number of years will be and as to how no one is predicting an improvement in the scandalous unemployment scenario for some time. The real reality is that the pain is not over, the unemployment rates will remain among the highest in Europe for some time and all the time, in the background, is that possibility that our growth figures are a hope. A hope that may turn out to be very false, like the falsity that was the “soft landing” claim and previous to that the claim that the boom would last forever…and if our hopeful growth rates do turn out to be wrong or the global economy fails to grow by as much as we need to help stimulate exports and by extension GDP…can we cope? A tough budget is coming this year, next year and for the foreseeable future. Yet all the while, they may not be tough enough… The Government claims things are getting better. The Irish people will soon discover this to be another down right lie. For when another 3 billion is removed from the economy, it will dampen growth. (Our growth rates are already very frail and volatile.) But to quote the Fianna Fáil poster in 2007, “the best is yet to come” Somehow I feel that the 440,000 on the live register, along with the 80,000 who have emigrated may disagree fundamentally.
Gerry Adams:Still Here!!! March 6, 2010
Posted by Scandalcentral in Current Affairs.Tags: Ard Fheis, Economy, NAMA, Politics, SF
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It’s the little things that bemuse me. For example: the top story right now on rte.ie/news is Gerry Adams and his Ard Fheis. A man who leads his party from another country! This party he leads has never been in Government in the Republic of Ireland. This is the party that never once has been asked my the Irish people to help out in the running of the state. Yet according to our national broadcaster it is more important than those that today called from our laws to be changed to allow pubs to open on Christmas Day, more important than the Unions threats, ,more important than the poor girl in Dublin who is missing. Can we count the party will the second lowest support levels in the state and the lowest representation in the Dail even important?
So what did Gerryeven promise us [http://www.rte.ie/news/2010/0306/sinnfein.html] Well apparently he wants to introduce a tax on assets worth over million. Now how exactly would that work? Will all the bankrupt develops pay a tax on the estates is it? Furthermore, even the dogs on the street know that most of what the developers paid is no longer there- i.e. those estates, sites etc are worth a fraction of what was paid for them. How exactly will we know whats worth over 1 million Gerry? At the end of the day, an asset is only worth what someone is willing to pay for it. How many people will be queuing up to buy any property etc in this climate? Whats more interesting about this Sinn Fein proposal is that fact that the figure given is 1%, yet no figure is given on what this will yield the exchequer! At the last general election SF were widely criticised for a lack of economic policy. The real question is has this changed? From reading this press release I cant say I see any progression.
Of course the big press topping news item to come from the conference was the motion to bin NAMA- which passed. While this is excellent, it does nothing for the country. Many parties have disagreed with NAMA, but they are got on with trying to make it work. SF have just decided to sit out, wait and think they will get some support from the electorate. The electorate want this thing solved as quickly as possible so the country can get moving again. Is opting out at this stage even a logical option? Have SF not just shot themselves in the foot? If they haven’t, where is their alternative plan? (The press release didn’t contain any- hence I have to assume there isn’t-further reinforcing my previous thought that there is an obvious lack of progression.
But it was this one which really made my year.
“Members also called on the Government to introduce legislation that would write off the difference between the purchase price of a house and its current market value.”
Is that even legal? Being completely honest it sounds like something one would hear in Cuba. Negative equity is a fact, it seems to daft to try to overcome this with some loopy law.
There is a reason these people have never got into government. From what I’ve read tonight- thats not changing.
P.S.- would they ever get a leader that actually lives in this country? 
Note: this is written in a satirical fashion, please don’t take the jokes too seriously!
2010:A new dawn…. December 31, 2009
Posted by Scandalcentral in Topical.Tags: Cork, Economy, Ireland, Roads, Weather
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After a year of rain, floods, frost, snow, recession, job losses…. ( I could go on, but wont to spare you the misery) 2010 approaches and with it brings a new optimism. Economists are predicting it will be the year that the economy leaves recession. However I do believe it will be late 2010 and the improvement seen on the jobs front for example, will be small. Nevertheless any improvement in the economic situation is welcome. One thing however that is very very worrying and possibly just as worrying as the economic situation, is the weather! Now global warming sounds bad in theory…but in reality? Its a million times worse. Yet maybe in Ireland we were always ready for it, especially considering the way we count it not as smalltalk as in other states, but as quality conversation. Even if we were mentally ready, we were not physically ready. Over the last 6 weeks, flooding has resulted in homes being destroyed, businesses being wiped out and even Universities being shut down! Right now, most of the western sea board is over a few feet of snow with half of the countryside impassable with huge numbers of (especially) elderly people housebound unreachable. Our new found climate is precarious to say the least and yet the country still appears to be slow at learning basic lessons of this. Anecdotal evidence in the media is appearing to show that some drivers are attempting to drive the normal 100km on icy roads and that will without doubt lead to a further loss of life on our roads. But the big question on everyones mind, is what will 2010 bring? Well weather wise, I’m not confident.
Tadhg J
