Political World
Full banking inquiry a potential minefield could politicians rise above takling sides?
World of Politics with Harry McGee – harrymcgee@gmail.com
That was a sensational scoop in the Irish Independent on Monday. Newspapers love nothing better than unearthing secrets and all the better when it is a tape, especially one that is candid and self-incriminatory.
Viewed through the prism of today, there is little in the conversation between the two senior executives from Anglo Irish Bank that is surprising. That is knowing what we know now.
But it is clear that those within the failed Irish bank knew then what we only know now.
I heard people getting outraged on Joe Duffy’s show on Tuesday about the fact that the two fellows were cracking jokes. I actually have no issues with that. It was a private conversation between two colleagues. If you listen carefully to the tone and tenet of the conversation they both realised that the company was in the soup. It was a bit inappropriate, it was a bit of gallows humour. And if you excuse my contradiction of the previous sentence as I mix my metaphors, it wasn’t really a hanging offence. Ok, the laddish quote to the ‘Drummer’ (then chief executive David Drumm) and pulling a figure out of his ass was inappropriate. But it wasn’t that big of a deal.
What was really striking to me was that both knew that the game was up. In the last sentence of the transcript (which I urge you to read in full, it’s on the independent.ie site and also on the irishtimes.com site) there is an admission that the bank is a goner and can’t survive. One of the two is prescient when he says the only solution is for the bank to be broken up or be nationalised. It was as stark as that.
It’s clear from the gist of the conversation that both knew deep down that all of the other Irish banks were so reputationally damaged and weakened (Bank of Ireland might be big here but was a ‘minnow’ in the bigger world) that they were in no position to buy Anglo and, indeed, were in trouble themselves.
What was also intriguing is that they also knew at the time that €7 billion was not enough. They said if the Central Bank was willing to cough up that amount of money it would have “skin in the game” and would cough up more. In other words, the Central Bank would have no choice but to invest much more (and we know the eventual figure came to a staggering €40 billion) in order to protect its initial investment of €7 billion.
The transcript, with its mixture of macho bravado and uncertainty, reads like the script of a David Mamet play (he’s the guy who wrote the seminal play and film Glengarry Glen Ross). There’s even a hilarious parody of the hapless financial regulator Patrick Neary. One of the two mimics Neary’s nervous search for reassurance as he was told that the Central Bank would have to stump up €7bn. Neary championed the now discredited light touch or principle-led regulation of the banks and was unaware that a crisis was about to befall Irish banks until caught in the headlights of the juggernaut bearing down on him.
There are two major political issues that arise from this disclosure. The first is how much of this knowledge was shared with the Government on the famous night of the guarantee in September 2008. All accounts of that fateful meeting seem to suggest that the problem was presented by the banks – including Anglo – as a liquidity problem but one that could fell all the banks if it was not sorted.
It’s clear that Anglo and others were economical with the verité as they obviously knew much more than they pretended and knew that the problems were graver and more systemic and – most probably – unrecoverable.
For more, read this week’s Connacht Tribune.
World of Politics with Harry McGee
Academically, politics is described as a science. But in the real world, it’s more of an art – and one of the big decisions a Government has to make is to decide when to call an election.
Will they see out the full term, or will they go early – either to mitigate the damage they will ship, or to secure a victory before things go awry, or the economy takes a dip, or some kind of controversy erupts?
Timing is everything.
And there’s a bit of art to that – not to mention a lot of luck. If you call it early and win big, you’re a genius. If you call it early and lose, you are the political version of the village fool.
Charlie Haughey was a poor judge of the public mood. Twice he called snap elections and on both occasions they backfired. Haughey succeeded Jack Lynch as Taoiseach in late 1979 and did not – technically – have his own mandate. He tried to remedy that by calling an election in 1981. But it recoiled. Ray MacSharry warned him not to hold it during the H Block hunger strikes when republican prisoners were dying each day. He did not listen to the advice and found himself out of office.
After his return to power in 1987, Haughey tired of presiding over a minority government that kept on losing votes in the Oireachtas (the opposition won nine private members motions).
So he called a snap general election and it backfired. Fianna Fáil lost seats and had to broker a coalition deal with the Progressive Democrats and his long-standing political adversary Dessie O’Malley.
For more, read this week’s Connacht Tribune.
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World of Politics with Harry McGee
I was cycling down Mount Street in Dublin on Tuesday. It’s a wide esplanade that links the Grand Canal with Merrion Square. The street is a mixture of fine Georgian buildings and modern office blocks.
About half-way down is the office of the International Protection Office, which deals with asylum seekers who have arrived in the country.
Needless to say, the office has been overwhelmed in the past year. Besides an estimated 80,000 refugees who have arrived from Ukraine, there have been about 20,000 people from other parts of the world who have arrived into Dublin (mostly) claiming asylum.
The numbers peaked around Christmas, but they have been falling a little. In January, more than 1,300 people arrived seeking asylum but the numbers fell back to 831 and 858, in February and March respectively.
They are still huge numbers in a historical context.
So back to my cycle on Tuesday. I knew that some asylum seekers were camping outside the International Protection Office, but I was taken aback by how many. There were six tents lined up on the pavement directly outside. Then on the ramp that led down to the basement carpark on the side of the building, there were about another 20 tents.
It looked like what it was, a refugee camp in the middle of Dublin’s business district. If you pan out from Mount Street, you will find tents here and there in nearby streets and alleys. There were a good few tents in an alleyway off Sandwith Street about 500 metres away.
For more, read this week’s Connacht Tribune.
Connacht Tribune Digital Edition App
Download the Connacht Tribune Digital Edition App to access to Galway’s best-selling newspaper.
Click HERE to download it for iPhone and iPad from Apple’s App Store, or HERE to get the Android Version from Google Play.
Or purchase the Digital Edition for PC, Mac or Laptop from Pagesuite HERE.
Get the Connacht Tribune Live app
The Connacht Tribune Live app is the home of everything that is happening in Galway City and county. It’s completely FREE and features all the latest news, sport and information on what’s on in your area. Click HERE to download it for iPhone and iPad from Apple’s App Store, or HERE to get the Android Version from Google Play.
World of Politics with Harry McGee
God that was a dramatic and historic weekend in England, wasn’t it? So much excitement, so much change, so much hype, so much out with the old and in with the new, and what looks like the coronation of a new leader. Yes, the local elections in Britain were something else weren’t they!
Apologies for not going on about King Charles III but the contract I signed when I became a lifelong republican forbids me to discuss the topic!
I know the British local elections sound a bit boring by comparison, but the results were stunning.
The Conservatives lost nearly 1,000 seats, the British Labour Party gained almost 500 and both the Lib Dems (with 350 gains) and the Greens (gaining over 200) also had amazing days at the polls.
It was Labour’s best day since 2002 but its victory was only partial. The Greens and the Lib Dems actually made gains at the expense of Labour in more affluent areas, and in parts of Britain where there were high numbers of graduates.
It was in the Red Wall constituencies in the North of England where the Labour recovery was strongest. These are working class constituencies with pockets of deprivation where people voted for the Labour Party forever. But all of those constituencies voted for Brexit and then voted for the Tories in the next general election. Labour is now winning back some of those votes.
Local elections are classified as second-tier elections which essentially means – from a national perspective – they are not life-or-death affairs, and not everything turns on them. Of course, it’s really important to have good local representation. But they are not an amazing weather vane for who rules the country.
For more, read this week’s Connacht Tribune.
Connacht Tribune Digital Edition App
Download the Connacht Tribune Digital Edition App to access to Galway’s best-selling newspaper.
Click HERE to download it for iPhone and iPad from Apple’s App Store, or HERE to get the Android Version from Google Play.
Or purchase the Digital Edition for PC, Mac or Laptop from Pagesuite HERE.
Get the Connacht Tribune Live app
The Connacht Tribune Live app is the home of everything that is happening in Galway City and county. It’s completely FREE and features all the latest news, sport and information on what’s on in your area. Click HERE to download it for iPhone and iPad from Apple’s App Store, or HERE to get the Android Version from Google Play.
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