Changchun’s Irish visit a boost to Sino-Irish relations

His Excellency Li Changchun, the fifth ranking of nine-member Standing Committee of the Political Bureau of the Communist Party of China – the only political party in the country, visited Dublin today.  The CPC was founded on 1 July 1921 and has almost 78 million members across 3.3 million branches. Over 71% of the membership is under 35 years of age and 21.7% are female members. Li was promoted to the Politburo at the age of 54 in 1998 – making him the youngest person ever to achieve this role.

China has become the 3rd largest economy in the world and having achieved a 9.1% increase in GDP in 2009 is poised to achieve an 8% growth this year.

Despite rapid growth China is still a developing country and although heavily populated it faces problems in the areas of employment, pensions, social security, housing and healthcare. But, according to Li, China is opening up and attaching great importance to intellectual property rights.

Ireland and China established diplomatic relations in 1979.  Ireland has a trade surplus with China and exports to China increased by 17% last year.  China is seeking to secure cooperation with Ireland in fields such as telecommunications, bio-pharmaceuticals, clean energy and other fields.  It is also interested in initiatives to advance culture, education, media and tourism.  Li is the propaganda chief of the CPC.  He mentioned a need to fight against trade and investment protectionism, and to work jointly in areas such as climate change and economic recovery.

Fine Gael’s approach to the presidential election brimming with vision

A brim is the upper edge of anything hollow.  The verb brimming describes something that is full to the brim – and Fine Gael are certainly not brimming with vision when the issue is the next presidential election.

A comment this morning on the Marian Finucane RTE 1 radio programme by Brian Hayes the Fine Gael TD to the effect that ‘an agreed candidate’ might be an option for the next President of Ireland almost induced an episode of collective projectile vomiting in our household.  

Ireland has been afflicted with a Taoiseach who has no public mandate and the suggestion that a so called ‘agreed candidate’ is an appropriate means of determining the next President is an appalling, ugly vista that totally compromises our fundamental democratic rights and falls within the same retarded school of political thinking that advocates gender quotas.

The very least the nation should expect is that the major political parties are capable of sponsoring a viable candidate and if they are unable to do so their chances of governing effectively are correspondingly weakened.  Do  Fine Gael not have the balls to play this game on the electoral playing field?  That need not exclude Fine Gael sharing the endorsement of a candidate but the person nominated must be one of several candidate who must contest a presidential election.

A major weakness in the presentation of those who have tilted at the prospect of a nomination so far is their reluctance to state clearly at a high level at the outset what their credentials are to become head of state. 

Therefore, how can a voter deduce if someone from Kerry who was once president of the GAA is an attractive choice to become President of Ireland because he offers not an inkling as to how he would execute the office?  Does writing about agricultural issues in the media and representing subsidy-hunting farmers in the European Parliament constitute a satisfactory launching pad for the presidency, especially when nothing else is known about the person concerned?  Will the country, where the median age of the population is slightly under the age of 35 years embrace the concept of a candidate who would be 77 years of age at the end of the next presidential term excite voters? 

There will be a gap in each and every instance between the background and current activities of these individuals and their capacity to be a successful president.  There is no such thing as a ready-made presidential candidate.  That is why each one must address the central question as to why he, or she, is worthy of public trust in this supreme office.  Imagine if the nation is be afflicted with another ‘George Lee’ type whose credentials for office are ‘wonderful’ but whose capacity to serve in elected office was pathetic.

It is not for me, or any other commentator, to provide the ultimate answer and that is why there must be a presidential election which offers a choice of decent, attractive candidates.  I trust that Mr Hayes observation is the first and last occasion I hear talk of ‘an agreed candidate’. 

Tom Elliott and the GAA

It is noteworthy that the first days of the leadership of the Ulster Unionist Party by Tom Elliott are characterised by what he will apparently not do rather than what he is determined to accomplish.

Mr Elliott is skittish about attending GAA matches. He was also churlish about supporting Down in the All Ireland final.  If Mr Elliott was really shrewd he would realise, as the incoming leader of a political party that has been consigned to the margins, no longer centrally relevant to society’s destiny and whose dwindling, ageing membership grows more sedentary and apathetic, that he has much to learn from the GAA. A new leader has political capital in the bank.  A new leader ought to be abundant with energy, vision and novelty, not sclerotic, like the centurion guard of a tribe threatened with extinction.

The Ulster Unionist Party is 21 years younger than the GAA – a callow youth in comparison, but, in common with many political parties, it achieves little traction with the age group that the GAA so expertly attracts and captivates.

The GAA has a legacy extending back 125 years and claims a million members, mostly young, able and ambitious individuals whose genius and ingenuity will define the potential of Irish and Northern Ireland society for coming generations. The GAA is an organisation that has thrived on change, embraced diversity and repositioned itself at the mainstream of Irish society, especially among young people and is strengthened as a consequence.

If Mr Elliott believes that he has the imagination and capacity to reinvigorate his moribund party he could also learn much from the organisational skills and grass-roots savvy of the GAA and, especially, how it has successfully navigated fundamental change to its policies and rules without jeopardising its own existence. He could learn how it attracts, inspires and fosters the loyalty of tens of thousands of young members. But to gain these insights personally he must earn the trust of those who can describe the insights and experience. That involves steering his sturdy Fermanagh feet onto the terraces of various GAA grounds from time to time. The fact that Sir Edward Carson enjoyed hurling and was a member of Cumann Iománaíochta at Trinity College prior to the founding of the GAA should not make such a proposition an unduly distressful ordeal for Mr Elliott.

The passage of the British-Irish Agreement in the 19^th Amendment of the Irish Constitution on 22 May 1998 by a majority of 93% of those voting means, unequivocally, that there is no threat to the political interests that Mr Elliott represents - other than through the free will of the people.

But if Mr Elliott’s political legacy is to be constrained by archaic shibboleths and yesterday’s thinking then he might as well hide and record his thoughts on his office voice mail to assure his followers that he has nothing new or inspiring to say to them and that their destiny under his leadership will not mean they become more self-sufficient, more prosperous, or more self-confident.

Ireland: Borrowing money to give it away

Mr Justin Kilcullen of Trocaire has severely chastised the Government (The Irish Times Opinion & Analysis, 20 September) for ‘reneging’ on its commitment to spend 0.7% of GDP per annum on international aid, a target set by the UN a decade ago.

The Irish Government is spending €535.3 million on this programme in 2010.  It spent €422 million on development aid in 2002 when our tax revenues were last in the region of €30 billion, when the exchequer surplus was €94 million and our national debt was €31 billion.  The government has spent over €5.8 billion altogether between 2001 and 2010, so even if we stand indicted in the eyes of lobbyists, Irish people have pulled their weight on the delivery of ‘real change’ to the less privileged.

But the view of the aid agencies is that the government needs to commit €1.1 billion per annum for an on-target performance.  They exhort the Government to ‘find the money’ and, in the classical language of a lobbyist, ‘to set out clearly defined, year-by-year steps’ to meet their aspirations – in circumstances of unprecedented turmoil and volatility.  The Government is also asked to introduce new legislation so that Ireland can lead the world in the safeguarding of aid commitments from any and all prevarication, doubt and uncertainty.

This approach would be a difficult challenge at any time because Peter has to be robbed to pay Paul, but when government expenditure is €54 billion and government income is €30 billion that challenge becomes even more elusive because the only source of money is from international moneylenders whose penal rates of interest are a reflection of their below-par confidence in the country’s capacity to recover from the brutal mauling inflicted by our banks and building societies and their capacity to regain functionality.

It still appears that a great deal of money spent on aid by Ireland is based on the ‘black baby principle’ of merely giving it away with no economic advantages being conferred on our economy.  Other countries spend aid on the provision of long-term infrastructure and assets by their own enterprises so as to stimulate self-sufficiency,  not nurture chronic and infinite dependency and, critically, to minimise exposure to bribery, corruption and price gouging – a widespread  experience anecdotally reported following the horrific earthquake in Haiti.

Turning to the future, how can Ireland meet the ambitions of those seeking to alleviate world poverty if our policy is really founded on the practice of borrowing money to give it away and the scale of the expenditure bears no relationship to our capacity to afford it?  It would be preferable for Ireland to participate in the international aid arena with integrity and modesty rather than indulging our vanity and always seeking a status and recognition in the eyes of the world that is beyond our capacity to sustain. Finally, why should our values be shaped dictated by lobbyists who have no mandate beyond the perimeter of their own T-shirt and not the elected Government who are presumed to act vicariously and in the best interests of the people?

Rescue remedy needed for training and education system

The viability, reputation and stature of our national training and education enterprise is sailing like the Titanic en-route to the iceberg and there are no life jackets on board.

Despite recurring and widespread allegations of systemic malpractice and accounting failures at FÁS, SIPTU announce glibly that the ‘problems’ at FÁS can be overcome, a perspective not apparently echoed by IBEC. Is this a case of mutual recognition by birds of a feather, or does it merely imply that SIPTU has a higher than desirable tolerance of mediocrity and slovenliness and an aversion to change and radical reform?  FÁS is a creature of a social partnership process that has self-destructed as a result of insular thinking, incompetent, delinquent and politically compromised leadership. The best days of FÁS are behind it and only those with deep vested interests, most precious to themselves, refuse to recognise this while those most effected deserve a much more enlightened and inspiring response.

Secondly, a stronger level of Government supervision is urgently needed over the plethora of private third-level colleges emerging in this country. This could take the form of an operating licence reflecting the conformity of its teachers and courses to designated national standards.  Some of these so-called colleges are purely money-making rackets promoted by individuals with no background in education and no substantial personal academic credentials. They should be immediately banned from advertising courses that have no Irish State accreditation rather than playing on the desperation and gullibility of an unsuspecting public, presumed to believe that any entity with the initials C D in its identity automatically has the prestige and resourcefulness of a distinguished university. When there is incisive and scathing official criticism of a private college it is no defence whatsoever to state that such criticism is "not as positive as we might have hoped".

Thirdly, the realisation that 40% of our adult population struggle with primary school maths and that 10% of the candidates for ordinary maths in the 2010 Leaving Certificate failed is a symptom of a fundamental failure in leadership at an institutional and also at a political level. If that trend is not successfully arrested the prospects of our society being able to sustain the standard of living it aspires to will be sorely compromised and those adversely affected will find it increasingly difficult to obtain meaningful work at home and abroad because such a wide range of skills are based on some understanding of maths and mathematical relationships.

Mortgage arrears escalate

Mortgage arrears in Ireland continue to climbed by close to 40% while the overall number and value of mortgages declined by 0.6%.

Total Mortgages	Number	Balance Outstanding €	Average Mortgage €
Sep-09	794,609	118,648,748,000	€149,317
Dec-09	792,885	118,342,812,000	€149,256
Mar-10	791,047	118,057,227,000	€149,242
Jun-10	789,814	117,717,554,100	€149,045
Change Sep 09-Jun10	-0.6%	-0.8%	-0.2%
In arrears 91-180 days	Number	Balance Outstanding €	Arrears €
Sep-09	8,504	1,589,274,000	47,684,000
Dec-09	9,418	1,745,326,000	52,856,000
Mar-10	10,504	1,943,632,000	50,388,000
Jun-10	11,641	2,142,685,000	72,386,000
Change Sep 09 - Jun 10	36.9%	34.8%	51.8%
In arrears 180 days+	Number	Balance Outstanding €	Arrears €
Sep-09	17,767	3,238,39Bal5,000	306,730,000
Dec-09	19,185	3,588,718,000	361,367,000
Mar-10	21,817	4,160,047,000	414,165,000
Jun-10	24,797	4,805,837,000	486,527,000
Change Sep 09 - Jun 10	39.6%	48.4%	58.6%
Total Arrears	Number	Balance Outstanding €	Arrears €
Sep-09	26,271	4,827,669,000	354,414,000
Dec-09	28,603	5,334,044,000	414,223,000
Mar-10	32,321	6,103,679,000	464,553,000
Jun-10	36,438	6,948,522,000	558,913,000
Overall Change Sep 09 - Jun 10	39%	44%	58%

The travails of Senator Ivor Callely continue

When the Select Committee on Members’ Interests of Seanad Éireann found that Senator Ivor Callely had misrepresented his normal place of residence for the purpose of claiming €81,500 in allowances I contacted the Committee.

I asked on 24 July if the Committee could confirm if Senator Callely has honoured the clear undertaking given in his evidence on 25 June 2010 that he would reimburse, or repay, any overpayment of allowances?  If this undertaking has not been honoured, what steps do the Committee propose to take in the light of their own determination and findings on 14 July 2010 to preserve public confidence in the Seanad and its members and within what time frame will this issue be equitably resolved?

I pointed out that there are, according to statistics provided by the Revenue Commissioners, over 900,000 people in our workforce of 1.8 million that earn €20,000,or less, per annum.  It would take the total income tax deductions in a fully year of over 750 of these men and women to fund the allowances that Senator Callely claimed from his second house in County Cork that were the subject of the Committee’s investigation. 

The Clerk of the Committee replied that the repayment of any allowance is now a matter for Senator Callely and the authorities in the House of the Oireachtas Service and the Committee has no further role in this matter.

Senator Eugene Regan, of Fine Gael, is a senior counsel.  He wrote an opinion article on the Callely issue in The Irish Times on Saturday, 21 August titled ‘Callely not out of the woods on suspension’.

Two points caught my eye:

• Section 10 (1a) of Ethics in Public Office Act 1995-2001 gives the Committee the power to refer a matter under investigation to the Director of Public Prosecutions.  The author states that this provision not only empowers the Committee, but obliges it, to refer a matter to the DPP, if the Committee consider an offence may have been committed.
  
• Section 28 (2)(c)(ii) of the Ethics in Public Office Act 1995, as amended by the Standards in Public Office Act 2001, provides that where a committee reports and a resolution is passed suspending a member for a specified period and where the breach in issue is continuing, then the member is suspended “in addition … until such time after the expiration of the period specified … as he, or she, takes the steps specified … to secure compliance”.

Senator Regan opines that the Seanad is judged by the citizens not merely on the transgressions of individual members but on how it is prepared to deal with transgressions and how prepared it is to exercise the powers available to the full.  His point is well made.

Irish households owing less and saving less

This is a quick overview of the current status of the deposits and indebtedness of Irish households.

INDEBTEDNESS

June	Mortgages €M	Other Loans €M	Total €M
2010	107,677	32,514	140,191
2009	114,306	33,637	147,943
2008	121,260	30,030	151,290
2007	116,434	27,728	144,162
2006	104,897	23,743	128,640

The mortgage figure does not include €37.8 billion outstanding in respect of securitised mortgages.  While overall indebtedness is €10 billion less than it was in June 2008, it is €12 billion higher than it was was in June 2006 and this trend must be seen in the context of a severe increase in unemployment.

DEPOSITS

June	Deposits €M	Monthly Transactions  €M	Ratio of Deposits to Loans outstanding
2010	97,253	-581	69.3%
2009	98,462	-135	66.5%

 

Household deposits are €1.2 billion less in June 2010 than in June 2009.

The negative monthly transactions in each of these months can be viewed in the context of increases in deposits in the prior three years.  Deposits increased by €124 million in June 2008; by €634 million in June 2007 and by €1,572 million in June 2007.

Pakistan’s President flees a major humanitarian crisis to sip tea at Chequers

There are vey few countries whose citizens are abandoned by their Head of State at time of widespread distress and crisis.  The President of Pakistan, Asif Ali Zardari, took himself off on a 5-day soiree to London while those of his citizens that have not been drowned are floundering in flood water, breast-deep.  This very important man is the widower of Benazir Bhutto, who served twice as prime minister and was assassinated in December 2007.  He is also reported to be the 5th richest person in Pakistan

Meanwhile, the Irish people have been bombarded with advertisements this week to provide succour.   David Cameron must have been deeply impressed with this visiting personality cult but Cameron would also know that were he to abandon the Brits in a crisis of similar gravity his  tenure as prime minister would come to a very abrupt halt. 

The 11^th President of Pakistan maybe very rich and very privileged but he is a disgrace.  He has treated his office and his people with contempt. Spineless leaders are bereft of priorities formed by empathy and basic moral authority.

I saw this pathetic weasel of a man speak on BBC Television last night and it is a long time that I have listened to such inconsequential waffle and blather as he explained the significance of his visit to the UK.  He came across as an empty-headed, vain, self-absorbed fool who is wholly disconnected with his own people and whose capacity to deliver anything of value anywhere in the world is severely compromised.

Genuine leaders display loyalty to their own people, especially  at a time of severe distress and their priorities and presence are with them.  They deal with a crisis directly – even if that is only a matter of providing moral support through their presence.  Is there any tragedy in Pakistan that would keep this naïve clown at home, or is his infinite vanity and pompous nature such that he resides in a bubble above the aura of human distress and misery? 

Perhaps he should be  reminded of the international travel pattern of Nicolae Ceausescu, especially his very important trip to Iran on 18 December 1989 and the consequences of that episode of presidential delegation.

His ambassadors ought to make a public statement as to whether the people around the world should open their purses and wallets while President Ali Zadari behaves as he does.  How much of Ali Zadari’s personal wealth will be donate to the alleviation of this crisis, as he is reputed to be one of the five richest people in your country and will the amount of his donation be a matter of public record, or does he also delegate that matter to the UN? 

The World has arrived in Dublin

The World has dropped into Dublin.  This is a cruise ship with a difference because it is the first ever residential cruise ship.  Built in Oslo in 2002, it has 166 residential units that sell in a price range from €500,000 to €10 million for a suite that can accommodate up to 12 people.  One, two and three bedroom residences are available.  Monthly dues start at €20,000 to cover travel and overheads, including meals from the liner’s four restaurants, deli and gourmet grocery store.  The owners of these residents enjoy a net worth from €5 million+.

The vessel’s tonnage is 43,524 gross.  It is almost 197 metres long and 30 metres wide. 

The World departs for Cork on Sunday, 8 August and for the remainder of the year its itinerary will include Faroe Island’s, Greenland, Iceland, Newfoundland, Boston, Fort Lauderdale, Rio de Janeiro, Montevideo, Buenos Aires and Christmas will be spent on an Antartica expedition.

The New Year will shepherd the fjords of Chile, the west coast of South America with many 5-day stops en route before reaching the Panama Canal in March.  The voyage then proceeds around the Caribbean and up the east coast of the US, stopping at New York before heading to Portugal, Bordeaux, London, Edinburgh by mid June.  From there the vessel proceeds on a tour of Baltic ports including Helsinki and St Petersburg before heading to Amsterdam, the Mediterranean and onwards to Capetown, South Africa for Christmas 2011.

Laws governing Irish building societies must be changed

The report published by the  National Institute for Regional and Spatial Analysis (NIRSA),  A Haunted Landscape: Housing and Ghost Estates in Post-Celtic Tiger Ireland was described in the media  as 'a scathing and unambiguous attacks on the role of politicians' in the housing debacle.  The report highlights how ludicrous fiscal policy and reckless planning decisions resulted in thousands of uninhabited and unwanted, exorbitantly priced, houses being built in hundreds of estates at undesired, remote and poorly serviced locations across the country.  It is a pity that the report did not also shine a tangential bright light on the toxic and corrosive impact of building societies, driven by the legislation governing them.

When environment minister, Pádraig Flynn, was steering the Building Societies Bill 1989 through the Oireachtas in February of that year he said that it would ‘set very few boundaries to the future and scope of societies’. This included the empowering of building societies to acquire, hold, dispose of and develop land where the land is used for commercial purposes – other than residential.

The Bill was welcomed by Fine Gael spokesman Alan Shatter with an exclamation that Irish building societies 'must not be constrained by legislation enacted for a different time'.  It was also welcomed by Ruari Quinn and the Labour Party although he expressed reservations about their capacity to compete in financial services and a desire that the historical role of the building societies would be retained..  Building societies were granted virtually unlimited freedom to act like banks and their attempts to do so subsequently imploded in abject failure.

There were 23 building societies in existence when the State was founded. There were 10 in existence when this legislation was passed. The savings of their 1.25 million members’ at that time was equivalent to 20% of all savings in the country. More than six of every ten persons who financed the purchase of their own home in the late 1980’s did so by means of a loan from a building society.  Two failed building societies remain in existence, courtesy of NAMA and the taxpayer.

But there is a thriving, if more rationalised, building society sector in Britain. The 50 building societies there have deposits of £220 billion, accounting for almost 22% of all deposits. These finance residential mortgages of £225 billion, about 19% of the total residential mortgages outstanding. Apart from offering their members better value than banks, British building societies must not raise more than 50% of their funds from wholesale markets, but the average proportion raised from this source is actually closer to 30%.

The scale and success of the credit union movement in Ireland reflects a strong appetite for community-focused savings and loan institutions with mutual status. Should the inquest into the demise of our housing sector not also include a recommendation for revised legislation that ensures building societies stick to their fundamental mission of making loans that are secured on residential property funded substantially by their own members? 

How else can the young families of the future avoid being trapped in unfinished estates bearing burdensome loan liabilities on terms that are utterly unsustainable, even in a recovered economy?

TOP of the TOTS : Most Popular Baby Names in Ireland - 2009

REPUBLIC of IRELAND

	Boys	Girls
1	Jack	Sophie
2	Seán	Ava
3	Daniel	Emma
4	Conor	Sarah
5	James	Grace
6	Ryan	Emily
7	Adam	Katie
8	Michael	Lucy
9	Alex	Aoife
10	Luke	Chloe

 

NORTHERN IRELAND

	Boys	Girls
1	Jack	Katie
2	Matthew	Sophie
3	Daniel = James	Grace
4		Lucy
5	Ryan	Erin
6	Adam	Emily
7	Ethan	Emma
8	Charlie	Eva
9	Thomas	Chloe
10	Conor	Anna

Brian Lenihan’s illness, John Crown and TV3

It was on the News @ 5.30 on St Stephen’s Day 2009 that TV3 broadcast that Brian Lenihan was seriously ill.   This report, included a contribution by the distinguished cancer specialist, John Crown, in which he described his expert knowledge of pancreatic cancer, including the implications of both timely and untimely diagnosis.

The report prompted a considerable number of complaints to the Broadcasting Authority of Ireland, including one from me.  The Authority issued a finding on 9 March 2010 that this broadcast was within the requirements of the fairness, objectivity and impartiality rule, as defined by the Broadcasting Act 2009.    The Authority found on viewing the report that the reference to the type of cancer was editorially justified and in the public interest. 

But the Authority also found that the content of the report could have been considered by some viewers as distressful and / or offensive. TV3 stated that it is solely responsible for its decision to broadcast the news report, including the timing and the manner of the report and TV3 acknowledged that its news bulletin caused genuine upset.

I wish to retract my criticism of Mr Crown’s contribution to the report and express regret for any personal offence, or hurt, that he might have felt as a consequence of my criticism.

Elect the HSE chief!

The change of leadership at the HSE ought to have prompted a radical, far-sighted overhaul of its accountability, if the Government was really putting the interests of citizens first. 

The scale and complexity of the HSE is such that it functions like one of the major metropolitan cities of the world. The role of chief and deputy chief executive of the HSE is comparable to that of the mayor and deputy mayor of a major city, like London, Paris, Rome, Istanbul or Moscow. 

The HSE’s enormous budget (€15 billion) is significantly greater than the combined budgets of the city councils of Boston, Chicago and Los Angeles. The salary of its incoming chief executive outstrips the combined salaries of the executive mayors of Chicago and Los Angeles, who oversee the needs of a population of over 6.6 million people.

The mayor who leads these huge cities faces the electorate every four years. The responsiveness of these mayors to the needs of the public is dynamic, focused and robust. Indifferent standards of hygiene, premature deaths as a consequence of an MRSA infection, botched operations, or prolonged delays in accident and emergency departments are unlikely to feature in the manifesto of a successful candidate seeking election nationally to run a health service system - anywhere in the world.

The board of the HSE could continue to be appointed by the Minister for Health and Children.  But we, the people, need to feel we can strongly influence the system directly. Would the citizens of Boston, Chicago and Los Angeles feel short-changed if an anonymous apparatchik, chosen by unelected individuals, who are strangers to the public at large, were to emerge as leader of their city, spending their taxes? This issue is not one of promptly dealing with snow clearance from footpaths, policing or the consequences of devastating flooding, but it concerns matters that have a direct and immediate impact on living and dying.

Is it not reasonable, therefore, to want some say in who is in charge and to fire them if they fail?  Such an initiative would redefine the relevance and value of social partnership in Ireland.

NAMA and the Irish hotel industry

I am cringing with horror and revulsion at the report in the Irish Independent on Friday, 23 July that Mary Hanafin TD, Minister for Tourism, Culture and Sport is to meet NAMA to discuss ‘the problems’ in the hotel industry.  Their industry spokesmen concurrently attempt to blackmail and browbeat the citizens of Ireland by telling us that their demands to eliminate unwanted capacity  would cost less than the welfare costs in the event of the subsequent, but inevitable, meltdown of this industry.  She must not cave in to this delinquent posse and they must endure the total impact of the unmitigated consequences of their own decisions.  You must especially stamp on their demand that those who benefited from €1 billion in tax foregone should be let off the hook in meeting all obligations and conditions attaching to this.  Jimmy Deenihan, the Fine Gael spokesman on tourism is quoted in the article as saying – you “must show leadership” and so must he.

Public confidence in the NAMA enterprise is sceptical and uncertain, at best, and if it is demonstrated that NAMA is prone to heavy-handed political manipulation at the highest level the public will be extremely distressed and angry.

Hoteliers exist in a capitalist system which functions on the basis of risk and reward, as is the case with our economy as a whole.  Nobody forced them to increase capacity by 18,000 rooms since 2003 and this reckless expansion occurred without any commercial rationale, or informed foresight,  whatsoever to justify it.  The hotel industry had already expanded by 60% between 1997 and 2003 at a cost to the taxpayer of €140 million in taxes foregone.  This vested interest was therefore totally indifferent to risk and acted as though the only price on risk is that paid by the State with our money.

They also have the audacity to demand a State-sponsored ‘high-level’ committee to gerrymander their industry by selecting which hotels would be eliminated and which would be maintained for strategic posterity, featherbedded, of course, by impoverished and stressed taxpayers who have contributed €1 billion in taxes foregone since 2003 to create massive unwanted capacity.  

While the EU Commission approved the accelerated capital (depreciation) tax allowances as a legitimate State aid on 23 December 2002, Commissioner Monti did point out that “the Commission regrets that Ireland put the aid in question into effect, in breach of Article (88)3 of the Treaty.”

When hoteliers successfully lobbied the Department of Finance they argued that these very generous tax allowances would induce speculators (should I have said investors?) to build hotels at regional locations where there had never been a hotel before - and which saw very few customers subsequently.  When the EU Commission wanted these allowances guillotined on 31 July 2006 the Department of Finance persuaded the Commission to extend them to 31 July 2008 on a tapering-out basis  “because there was a very large backlog of pipeline projects and the rush to complete construction would inevitably lead to short-term overheating of the Irish construction sector” – not because the State aid was yielding positive results in the form of viable sector at remote regional locations.

The hotel industry speaks of the importance of its economic contribution to the State.  A critical illustration of economic stature is money in the bank.  Central Bank data indicates that hotels and restaurants increased their bank deposits since 2003 by only  €115 million to a total of €655 million in 2010 – less than one third of 1% of the total deposits in banks by Irish residents.  That is equivalent to less than €9,000 for each of the industry's 60,122 rooms.  But the very prudent and far-sighted Irish banks lent the industry €4 billion since 2003 to build the unwanted capacity and the average indebtedness in respect of each of the unwanted rooms is now over €350,000.  The tourist industry as whole owes the Irish banks over €10.9 billion - €1 for every unit of integrity and intelligence quotient that exists in the top-level of our banks.

The hotel industry lobbyists hum like choir boys about the €10 departure tax as though it was a red-hot poker impediment to their prosperity.  Their cute-hoor mentality, of course, precludes any suggestion as to who will provide the revenue were this tax to be eliminated.  The old-age pensioners and the infirm would bear the burden, I presume.  I suppose their next melodic aria will be to lobby the relevant authorities to increase the UK minimum wage from £5.80 per hour and the US minimum wage from $8 per hour to enhance the prospects of filling their bedrooms and meeting the exorbitant charges from time to time – ‘because these markets are so important’.

The hotel industry is the author of its own catastrophe havoc with the connivance of the State, the EU Commission and its ever-friendly bankers.  They tell us that it will recover in five years if it is kept breathing through one nostril with relief from local authority rates and additional large dollops of cash from our national debt.  Recovery of the incumbent regime is a most unlikely prospect and there is certainly no evidence to support a 5-year time frame.

The vacuum that is created by the destruction of this industry will be filled in due course by a new generation of hoteliers whose understanding of capitalism, providence and insight will hopefully be better honed that the current generation of losers and the Minister of the day might even have the possibility of presiding over an industry that is viable and functional while NAMA will have reached the geriatric stage of its natural life uncorrupted by political meddling.

Cowen needs to mobilise public opinion on expenditure cuts

Brian Cowen needs to successfully mobilise public opinion if the exchequer deficit is to be tackled and the shoots of economic stability are to yield jobs, stability and opportunity.

During the first six months of 2010 our national debt has increased by €9 billion and the amount of interest paid on it has increased by 20% between June 2009 and June 2010. Interest now accounts for over 15% of all tax revenue, up from 11.5% a year earlier. When the State had tax revenue of almost €46 billion in 2006 the government spent €44 billion. This year spending will be in the region of €60 billion but taxes could be as low as €31 billion.

The Finance Minister has indicated that serious expenditure cuts can be anticipated in the next Budget if the exchequer deficit is to be tackled in a meaningful way – and it must. But in the run up to the Budget the media will be cluttered with a cacophony of special, frequently vacuous, pleadings of vested interests seeking to defend their own resources typically citing some really heart-rending testimonials as a defence that are often quite atypical. Furthermore, the availability of the resources many of them will speak of are of relatively recent origin given the explosive and often wholly indiscriminate growth in government spending as was demonstrated vividly, for example, in FÁS and the HSE; when paying off delinquent executives in public institutions and the banks and building societies now controlled by the State and spending commitments based on benchmarks that are obsolete, or unsustainable.

If this government was not so snookered by a bunker mentality they would mobilise support through the public identifying spending cut suggestions rather than relying exclusively on the observations and advice of An Bórd Snip.

Would the Taoiseach’s much criticised capacity to communicate not be somewhat remediated if his own Department’s web site included an e-mail 'have-your-say' input facility for a finite annual 60-day period for the public to make practical suggestions that would save public money? These could be coordinated by an identified champion and criticised by interested members of the public before being presented to ministers for consideration. The cost of gathering suggestions need not be too burdensome, nor the electronic administration too onerous in the context of there now being fewer human resources in the public service working for less money.

Practical suggestions, illustrated by specific application in given instances, such as saving electricity, saving money through recycling, less travel and greater use of conference calling and video conferencing technology, less spending on contractors and consultants, using more efficient double-sided printing, greater sharing of resources, tighter rules on sick leave, more critical evaluation of discretionary spending, and more economical computer costs are examples of what might emerge. The compacting, postponing or elimination of certain academic programmes could also stretch educational resources and redefine priorities.  A critical review of publically funded advertising expenditure ought to enhance its relevance, focus, impact and practicality.

Apart from the practical benefits that might emerge from such an initiative, surely it would enhance the overall process of governance by a regime headed by a Taoiseach who does not yet have the reassurance of his own electoral mandate and who seems increasingly shy of connecting to the electorate by holding three long overdue by-elections well ahead of the next Budget.  He would be seen to be directly and robustly engaging with the general public on a matter which needs their widespread support and commitment, rather than merely consorting with the 'shakers and movers'. 

President Obama successfully mobilised public opinion in 2008 through the slogan ‘yes, we can’. This is an opportunity for Brian Cowen to emulate his approach through 'have your say'. It might also severely discourage his party colleagues from threatening to replace him with someone else who has not earned a mandate from the electorate to serve as Taoiseach and who would therefore be devoid of political capital and street credibility.

Will credit really start to flow to Irish SME’s?

Finance Minister Brian Lenihan has published and SME Lending Plan from AIB and Bank of Ireland in which each of them indicate an intention of making €3 billion available to SME’s in 2010/11

Which customers are likely to be in a position to use such additional resources and what impact will the provision of these facilities have on lenders? Borrowers that qualify are supposed to be exporting firms. .

An SME employs fewer than 250 persons; have a turnover of less than €50 million and a balance sheet less than €43 million.

Total lending to SME’s at 31 December 2009 amounted to €32.28 billion

	€ Million
Loans	26,340
Overdrafts	2,833
Finance and Leasing	2,407
Invoice Discounting	700
	€32,280

This proposal indicates a potential 19% increase in credit availability

There were 33,192 applications for credit amounting to €1.854 billion in the fourth quarter of 2009; 131,500 for all of 2009. Credit applications for the fourth quarter of 2008 amounted to €2.892 billion. The approval rate is estimated to be 84%. The utilisation rate for overdrafts is 52%.

Profile of Credit Applications

Sector	Number of Applications Q4 2009	Amount Sought € Million	Total Borrowing
Agriculture and Forestry	9,512	379	4,150
Fishing	128	10	325
Mining and quarrying	89	9	303
Manufacturing	1,742	198	2,630
Electricity, Gas and Water	63	16	279
Construction supply	1,808	61	1,249
Wholesale and repair	4,507	346	6,954
Hotels and restaurants	1,776	125	7,327
Transport, storage and communications	1,442	69	1,512
Financial intermediation	251	15	348
Real estate and business activities	7,783	390	3,816
Health and social work	1,071	99	1,472
Other community and personal services	3,030	137	1,915
TOTAL	33,192	1,854	32,280

Each of these sectors has issues from a banking perspective which I will comment on in the context of the change in their overall borrowing profile between December 2005 and December 2009

Credit Trends 2005 – 2010

Resident non-government credit, excluding personal borrowing, residential mortgages and lending to the educational sector increased by 121% in this five-year period.

The following table summarises the change in each sector and the relationship between the deposits maintained in each sector and how these relate to borrowing by these sectors as a whole:

Sector	Change in borrowing Dec 2005 – 09 € Million	Resident Deposits Dec 2009	Resident Credit Dec 2009
Agriculture and Forestry	1,554	2,496	4,933
Fishing	-70	112	336
Mining and quarrying	177	294	415
Manufacturing	1,628	5,989	7,137
Electricity, Gas and Water	513	898	1,120
Construction	5,495	3,578	15,042
Wholesale and repair	4,867	4,591	12,591
Hotels and restaurants	3.903	655	10,905
Transport, storage and communications	781	3,766	3,005
Financial intermediation	46,540	45,106	82,676
Real estate and business activities	61,598	14,781	93,845
Health and social work	1,845	894	2,679
Other community and personal services	1,034	4,800	2,832
TOTAL	€129,865	€87,960	€237,516

These sectors, in their entirety had credit outstanding of over €237 billion at the end of December 2009, a year in which our GDP reduced by 7% to €176 billion. The SME component of this, €32.2 billion was 13.5% of the overall total.

The level of credit they were responsible for increased by 121% in the previous five years. The deposits of these sectors maintained. €87.9 billion means that the overall ratio of deposits to loans was 2.7.

It is very hard to see much action in the construction sector given the collapse in demand or in the hotel and restaurant sector given the huge overcapacity as a consequence of tax breaks valued at €1 billion. Real estate is dormant and there will not be much international growth in agriculture.

Supply Perspective

The Financial Regulator has insisted that Tier 1 capital at AIB, which in common with its counterparts, is to be 8% means that additional capital of €7.4 billion is necessary by 31 December 2010. It is not yet clear where this is to come from.

AIB is the dominant force in the Irish deposit market laying claim to customer current and deposit accounts worth €52 billion of its total customer account base of €83.9 billion.

Bank of Ireland has a similar customer account total, €85 billion – but only €35 billion of this is derived in Ireland. The remainder is sourced in the UK and capital markets. Additional credit means additional capital.

AIB’s credit commitment to these sectors at 31 December 2009 and its NAMA relationship is as follows:

 

Sector	Change in borrowing Dec 2005 – 09 AIB Resident Loans € Million	Resident Deposits NAMA AIB Bound Loans Dec 2009 €Million
Agriculture and Forestry	2,015	24
Fishing
Mining and quarrying
Manufacturing	3,108	37
Electricity, Gas and Water	844	64
Construction and Property	15,930	18,055
Wholesale and repair
Hotels and restaurants
Transport, storage and communications	2,382	621
Financial intermediation
Real estate and business activities
Health and social work
Other community and personal services
TOTAL LOAN BOOK (IE)	€69,911
TOTAL LOAN BOOK (GROUP)	€103,341

Bank of Ireland had an Irish loan book of €63,450 million, slightly less than that of AIB. The make-up of it was:

 

Residential mortgages	28,350
Property and Construction	9,450
NAMA	8,100
Corporate and SME	14,850
Consumer	2,700
TOTAL LOAN BOOK (IE)	€63,450
TOTAL LOAN BOOK (GROUP)	€119,439

Credit availability crisis for Irish bank customers

Irish retail and business bank customers are continuing to experience a great deal of uncertainty in securing bank financing.  The latest monthly statistics published by the Central Bank illustrate the dependency of the banking system on funding from sources other than the deposits of Irish customers.

Retail clearing banks include AIB, Bank of Ireland, National Irish Bank, Ulster Bank and permanentTSB.  There are about 25 non-clearing banks

April 2010

€ Million	DEPOSITS FROM IRISH RESIDENTS	TOTAL LOANS TO IRISH RESIDENTS	EXTERNALLY FUNDED
Retail Clearing Banks	€113,804	€197,611	€83,807
Non-Clearing Domestic Banks	€50,335	€130,815	€80,480
	€164,139	€328,426	€164,287
Non--Clearing Foreign Banks	€7,901	€18,097	€10,196
	€172,040	€346,523	€174,483

 

May 2010

Retail Clearing Banks	€112,491	€196,674	€84,183
Non-Clearing Domestic Banks	€50,764	€129,517	€78,753
	€163,255	€326,191	€162,936
Non-Clearing Foreign Banks	€8,217	€18,749	€10,532
	€171,472	€344,940	€173,468

 

Total private sector credit amounts to just under €352 billion of which almost 93% is funded by the above sources.

The loans outstanding above include residential mortgage finance of just under €108 billion.  There is also an additional €37 billion in securitised mortgage finance bringing the total owing by the residential mortgage sector to €145 billion.  €57 billion was provided by the retail clearing banks and €51 billion by the non-clearing banks / building societies.

2010 World Heritage Site candidates to be decided in Brazil

The World Heritage Committee of the United Nations Educational, Scientific and Cultural Organisation (UNESCO) is to meet in Brasilia for its 34th from 25 July to 3 August and will decide on new candidates to be listed as world heritage sites.

There are two world heritage sites in Ireland. Newgrange, Knowth and Dowth archaeological sites on the River Boyne was listed in 1993 and the 7^th century monastic complex at Skellig Michael 12 kilometres of the coast of Kerry was listed in 1996.  There is one site listed in Northern Ireland – Giants Causeway and Causeway coast.

Ireland has submitted 7 sites to this year’s convention. These include:

• The glaciated karst landscape of The Burren
• The historic City of Dublin based on the Georgian architecture developed from 1714 to 1830 that was developed speculatively by the owners of the great estates that resulted in the city becoming, after London, the second city of the British Empire.
  The Neolithic landscape and examples of human settlement of the Céide Fields and north Mayo boglands
• Western Stone Forts in Clare, Galway and Kerry to illustrate a class of enclosed drystone circular monument used by maritime communities
• The monastic city of Clonmacnoise which marks a significant stage in the development of early medieval Christianity
• Early medieval monastic sites in Clonmacnoise, Durrow, Glendalough, Inis Cealtra (Clare), Kells and Monasterboice.
• The royal sites at Cashel, Dún Ailinne, Hill of Uinseach, Rathcroghan and Tara

The convention governing world heritage was ratified in 1972. Ireland became one of the State Parties to it in 1991. Three of those State Parties – Marshall Islands, Kiribati and Tajikistan - have no properties inscribed on the World Heritage List to date.  Ireland is represented on UNESCO by Ambassador Paul Murray.

Thirty two new properties in total were submitted for inscription on the World Heritage List this year: 6 natural, 24 cultural and 2 mixed (i.e. both natural and cultural) properties, including four transnational nominations. In addition, 9 extensions to properties already listed have been proposed.

The Committee will also review the state of conservation of the 31 World Heritage properties inscribed on the List of World Heritage in Danger and may decide to add to that list new properties whose preservation requires special attention. The In Danger List features sites which are threatened by a variety of problems such as pollution, urban development, poorly managed mass tourism, wars, and natural disasters, which have a negative impact on the outstanding values for which the sites were inscribed on the World Heritage List.

To date the World Heritage List recognizes 890 properties of “outstanding universal value,” including 689 cultural, 176 natural and 25 mixed properties in 148 States Parties.

The Convention encourages international cooperation to safeguard the common heritage of humanity. With 187 State Parties it is one of the most widely ratified international legal instruments. When signing the Convention, States Parties commit to identifying sites for potential inscription and to preserving sites on the World Heritage List, as well as sites of national and regional importance, notably by providing an appropriate legal and regulatory framework.

The World Heritage Committee, responsible for the implementation of the 1972 Convention, comprises representatives of 21 countries, elected by the States Parties for up to six years. Each year, the Committee adds new sites to the List. The sites are proposed by the States Parties. Applications are then reviewed by two advisory bodies: cultural sites by the International Council on Monuments and Sites (ICOMOS), and natural sites by the International Union for Conservation of Nature (IUCN), which inform the Committee of their recommendations. The International Centre for the Study of the Preservation and Conservation of Cultural Heritage (ICCROM) provides expert advice on conservation and training in restoration techniques.

The World Heritage Committee also examines reports on the state of conservation of inscribed sites and asks States Parties to take appropriate conservation and preservation measures when necessary. The Committee supervises the disbursement of over $4 million annually from the World Heritage Fund aimed, among other purposes, at emergency action, training of experts and encouraging technical cooperation. UNESCO’s World Heritage Centre  is the Secretariat of the World Heritage Committee.

Exorbitant judicial salaries in Ireland

The publication of the Report on Senior Salaries for 2010 in the United Kingdom provides interesting evidence of how the Irish taxpayer is once again screwed.

The following is a comparison of judicial salaries in the Republic of Ireland, the United Kingdom as a whole and in Northern Ireland, where special allowance is made in the case of county court judges who carry out significantly different work than their counterparts elsewhere in Great Britain – presiding over non-jury trials under the ‘Diplock’ system for dealing with terrorist cases, even though the number of such trials is lower than in the past.  But the provisions which were due to expire in July 2009 are to continue until at least July 2011.

 

	Ireland	United Kingdom	Northern Ireland
Chief Justice / Lord Chief Justice	€295,916	€290,212	€259,140
President of the Supreme Court		€250,297
President of the High Court / Chancellor of the High Court	€274,779	€250,297
High Court Judge	€243,080	€209,031	€209,031
President of the Circuit Court / Recorder (of Belfast)	€249,418	€167,640	€167,640
Circuit Court Judge / County Court Judge	€177,554	€155,238	€167,643
President of the District Court / Senior District Judge	€183,894	€146,150
District Court Justice	€147,961	€124,534	€124,534

 

Ireland has 147 judges – 7 in the Supreme Court; 36 in The High Court; 37 in the Circuit Court and 63 in the District Court.  The United Kingdom has 2,151 judges.  That works out as one judge for every 28,550 citizens in the UK and one judge for every 30,000 citizens in the Republic of Ireland.  The Chief Justice of Ireland was paid €295,916 last year.  The Lord Chief Justice of the United Kingdom is paid €290,000 and his counterpart in Northern Ireland is paid €259,000 while the Chief Justice of the US Supreme Court is paid €173,000 - 60% less than his Irish counterpart.

Irish judges were not charged the pension levy applicable to all public servants in Ireland in 2009.  However, by October 2009 72 Irish judges made voluntary payments that amounted to €698,000 and standing order commitments amount to €45,200 per month in addition.  There is no specific ‘due date’ for these voluntary payments.

Members of the judiciary are unique insofar as they receive no incremental salary increases, nor performance related pay. 

The prevailing economic climate in the UK and Ireland has led to a healthy situation as far as the recruitment and retention of judges is concerned.

Research carried out in Britain suggests that salaries are not the most important factor in encouraging or discouraging applications.  The most unattractive feature of being a judge is the isolated nature of the role, loss of flexibility, the requirement for travel or relocation.

Judicial pensions are an attractive element in the total reward package of the judiciary and the terms of their pensions were enhanced following a High Court case in 1994.