Political World
Inquiry means Siteserv backlash will be waiting in the long grass
World of Politics with Harry McGee
It’s not Watergate; it’s not Charlie Haughey saying “thanks a million big fella” to Ben Dunne; it’s not the State losing its sovereignty.
But the Commission of Inquiry into the artist formerly known as Anglo Irish Bank (the Irish Bank Resolution Corporation) has the potential to give the Government a bit of a jolt ahead of the election.
So what’s the backstory?
Anglo crashed in 2008. The Government’s eventual response was textbook. Of course that gave it no credibility. It had caused the crash. It was like being knocked over by a driver and being put on life support.
When you wake up from the operation you discover that the surgeon is the guy who crashed into you in the first place.
Some of that response relied on the advice of NUI Galway economist Professor Alan Ahearne who was an expert in this type of crash.
He saw the responses of Governments elsewhere where it was inadequate (Japan) and successful (Sweden).
Where it didn’t work, governments let the banks marriage the distressed assets. In essence, they did nothing and baulked from taking the hard decisions. The result was stagnation and inertia that went on for years.
The ‘tough medicine’ approach was to create a good bank and a bad bank. The good bank would manage the performing loans and assets – the bad bank would work on the stuff that was not going to perform.
The Irish government created the same kind of vehicle in 2009 with the establishment of NAMA. It bought a lot of Anglo’s distressed loans at a very significant haircut (discount).
What was left of the bank was spun into the Irish Bank Resolution Corporation, which essentially was a ‘pop-up bank’ with a specific remit that would eventually also be wound up.
The former Fine Gael leader Alan Dukes was appointed (by a Fianna Fail administration) as its chair and it was given a high degree of independence.
So what’s at issue here? Well, a new Coalition came into power in 2011 and almost immediately the relationship between the Department of Finance and the IBRC changed dynamic.
Michael Noonan brought in John Moran from the Central Bank to look after banking (he later became secretary general). It is clear that he and Dukes did not see eye-to-eye and the Department began questioning some of the decisions and strategies that were being pursued by the IBRC.
Dukes is no pushover and he had very strong views on the remit and independence of the IBRC. The deteriorating relationship between Moran and Dukes is clearly set out in correspondence between the two, obtained by my colleague Cliff Taylor under the Freedom of Information Act.
One of the deals that caused difficulty was the decision to sell Siteserv to a company controlled by Denis O’Brien.
Siteserv was not in great condition. The IBRC sold it for €46m which meant a substantial write-off of €119m of debts. It also allowed the company (rather than the bank) to control the sale process.
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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