Category: EU

Labour could be casualty in Treaty Yes vote

by dsmooney, posted in EU, Fianna Fáil, Fine Gael, Government, Irish Labour Party, referendum, Sinn Féin

My Evening Herald column from today’s (Thurs May 24th) edition:

voting
Many different reasons to vote yes or no

With less than a week to go the referendum campaign seems more and more to be about less and less.

On the face of it, if you believe the posters, the choice is to Vote Yes to achieve stability or to Vote No to end austerity.

But do any of us really believe these claims? Regrettably, like previous EU referendums the debate has been conducted at the extremes, not the centre. It was the case in the Nice and Lisbon referendums, remember those “€1.84 Minimum Wage after Lisbon” posters?

Mercifully, we have been spared the malign input of Cóir and Youth Defence this time. The are no loss, especially as most of them wouldn’t know a treaty from a tea-bag (to rob a line I recently overheard)

But this absence of any significant ultra right involvement on the no side does highlight a curious undercurrent to the campaign, one, which I suspect, may be a factor in how some people decide how to vote next week.

While the slogans maybe about the EU and the Euro the referendum has morphed into a proxy battle on the future of left / right politics in Ireland.

From the start the battle front was drawn up along left versus right lines.

On the Yes side you had the right and centre right parties: FG, FF and Lab (more about them later), the employers’ and business organisations, the farmer’s groups and the more established/mainstream trade unions.

On the No side you had the socialist and hard left parties, People Before Profit, Joe Higgin’s Socialists, Sinn Féin, the more radical trade unions.

While the entrance of The Declan Ganley somewhat clouded the the Left/Right delineation, it hasn’t ruptured it.

The sight of him sharing No platforms with irredentist left firebrands is a joy to behold, especially when you consider that they agree on virtually nothing, including Europe. Most on the hard left are euro-sceptic while The Ganley is avowedly Euro-federalist.

While passing the Fiscal Treaty will herald no major day to day changes – mainly because it just restates the centre/centre right economic orthodoxy in place since 2008 – it will cement it into domestic law for the foreseeable future.

It is this that the left fears and opposes most.

Passing the Treaty would recalibrate the centre of the Irish political spectrum a few points to the right. It won’t be a seismic or noticeable shift, but it torpedoes the Left’s ambitions of shifting it the other way.

It doesn’t vanquish them, nor does it make them to tone the rhetoric down. If anything, it will do the opposite, but in their hearts they will know that their ambition to shift Ireland economically to the left has been reversed.

This explains why the campaign from Joe Higgins, Boyd Barrett and Sinn Féin has been so fierce. But not as fierce as when its over and they start to target each other.

I am not predicting that their poll rating drops are set to drop. They won’t. They will probably rise as voters use them to express their disapproval of government parties going pack on pre election pledges.

But the Irish electorate is sophisticated. It is overwhelmingly aspirational. This applies across all social classes and communities. They want their kids to do better than they did. That decides voting intentions more than anything.

In the meantime Sinn Féin will continue to do well at Labour’s expense, after all Gerry and Mary Lou are saying now what Éamon and Joan were saying two years ago.

It is Labour who will be the biggest casualty. Polls showing 40% of Labour supporters voting No could have longer term ramifications for the leadership. But whatever they may be, they can be so where near as damaging as Gilmore’s infamous “Frankfurt’s Way or Labour’s Way” slogan.

It may turn out to be the most devastating political slogan of recent times – devastating to its authors, that is.

Referendum is as much about Left vs Right as it is about the €

by dsmooney, posted in EU, Fianna Fáil, Fine Gael, Government, Irish Labour Party, referendum, Sinn Féin

What will we be voting about on May 31st? It is one of the toughest Treaty referendum questions to answer.

European Central Bank
The ECB on Frankfurt’s Way?

If you are to believe the thousands of posters that adorn our street lamps we are either voting yes to stability and jobs or voting no to austerity. A simple enough choice… or so you’d think? Unfortunately, as the campaign progresses, it is becoming clear that neither the Yes nor the No poster claims stands up to much scrutiny.

Do we really think we will suddenly achieve stability and more jobs if we vote yes? I suspect that even the most ardent of yes voters believes that to be case.

On the other hand does the most convinced no voter think that the austerity measures, including household and septic tank charges will disappear if 50% plus one of us votes no? I doubt it.

So what are we voting about?

The best answer I have heard so far has not come from a member of government, the ULA or Sinn Féin. It came, peculiarly enough, from a Euro bureaucrat, a former member of the board of the European Central Bank member. Not the type of person you would expect to speak with simplicity and clarity, yet he did.

Speaking on RTE Radio One’s This Week programme, Lorenzo Bini Smaghi described the decision before us with a cheque book analogy. After years of having separate current accounts, he explained, the Eurozone countries have decided to have one current account and one single chequebook between them for certain purposes.

The risk with this is that any individual country could abuse their access and stick others with the bill, so it is important to agree a set of strict and enforceable rules beforehand. These rules are set out in the Fiscal Treaty. If you want to be able to use the joint account, you need to agree the rules. Refuse to agree the rules and you won’t be allowed near the chequebook.

It is a simple and effective explanation.

What we are voting about is our relationship with the Eurozone countries. Do we want to continue and strengthen that relationship or do we want to weaken it. This does not mean that voting No is the same as being against the Europe, but the choice we are facing has become starker than we would like it to be.

Ok. So now that I have attempted to make the issue a little clearer and get behind the hype and hysteria printed on the posters let me now reverse the process and confuse it again.

While much of the debate has been about the EU and the Euro let me point to another level in the debate. Though it does not get mentioned so much, this referendum has become a proxy battle on the future of left versus right politics in Ireland.

Before The Declan Ganley entered the fray the battle lines had been drawn up along clear Left/Right lines.

On the Yes side you had the right/centre right parties (FG, FF and even Lab), the employers’ and business organisations, the farmer’s groups and the more conservative trade unions.

On the No side you had the radical and left parties, People Before Profit, Joe Higgins Socialists, Sinn Féin, the more radical trade unions.

A Yes result would recalibrate the centre of the Irish political spectrum several degrees to the right. While this would not vanquish the left, it would limit their scope and hem them in.

This could help explain why Sinn Féin has been so fierce in urging a No. A Yes vote would place a definite ceiling on their ambitions and make the centre/centre right economic approach the norm for at least the next decade.

This would leave the hard left /socialist factions with no influence, just sitting on the sideline spouting rhetoric – so, no change there.

The main casualty could be Irish Labour Party, no matter what the result. “Frankfurt’s Way or Labour’s Way” may turn out to be the most devastating political slogan of recent times – devastating to its authors, that is.

Time to Postpone #EURef ?

by dsmooney, posted in EU, Government, Irish Labour Party, Politics, Sinn Féin

Text of my Evening Herald column considering the consequences of the French & Greek election results for our forthcoming Stability Treaty Referendum vote

The EU political landscape has changed dramatically in the last 24 hours. The election of Francois Hollande in France and the defeat of the pro bailout parties in Greece will have repercussions far beyond the borders in both countries.

While both results will come as no great surprise to politicians who have been following the campaigns in France and Greece; it seems no one has given any serious thought as to what may now happen.

The focus of such thought, in so much as there has been any, has been on what Hollande might do to make good on his campaign promise to move the EU’s focus on to growth and investment.

There seems to have been very little thought as to what might happen in Greece. As recently as last week, pundits were citing polls that showed that up to two thirds of the Greek electorate accepted the need for a bailout.

Perhaps they did tell the pollsters that but, as we discovered last night, that sentiment did not transfer itself to the ballot box. The reality is that two thirds of Greek voters opted for anti bailout parties of various hues – from far left to far right, leaving the two pro bailout parties in tatters.

The net result, in the short to medium term, will be political stability that will make markets jumpy and herald problems for counties such as Spain and Italy when they go to the markets to borrow money.

The instability in the Eurozone that we thought had abated for a while looks like returning with a vengeance. M Hollande may not have time to set out his vision for a growth and investment plan for the EU – events may well overtake him.

Uncertainty may now be the name of the game in the EU and the Eurozone – yet the Government here seems to think that nothing that has happened in the last 24 hours has changed the mood music here.

To judge from Tánaiste Eamon Gilmore’s comments the coalition government here believes that the result there has no consequence for the Stability Treaty referendum. The Tánaiste was in Paris, in a signal of European Socialist grouping solidarity, with PES colleague M Hollande. This contrasts with the fickleness of the FG party chairman,Charlie Flanagan’s “Bon debarras (Good Riddance) Nicolas ! Bye Bye Sarkozy” tweet last night.

@Charlie Flanagan FG Chairman
@Charlie Flanagan FG PP Chairman

In Feb 2011 Fine Gael were championing their relations with Sarkozy, Merkel and the EPP – now they deny their former friends. You could almost hear the cock crow three times.

I am no fan of the Stability Treaty. Like others. I believe it is a missed opportunity. It fails to tackle the root cause of the problems in Ireland and Europe – a failed and dysfunctional banking system. But I am not convinced that voting it down brings us one millimetre closer to resolving our problems.

I am a reluctant Yes voter. I hope that passing it may give Germany the cover it needs to allow real reforms to the European Central Bank and the Euro architecture,

For that reason I want to give the Treaty every chance to gain public support. I do not believe that ploughing ahead with a vote on a Treaty that may yet be further reformed – or even improved – serves any purpose. I genuinely fear that going ahead against a background of uncertainty and volatility puts the outcome in doubt.

It is not that I think the combined forces of Sinn Féin and the ULA will convince the people to vote No, but rather that the public will opt not to endorse a Treaty that may be defunct within weeks of passing it.

This is not a new fear. I wrote about the imprudence of holding the vote this early on my website some weeks ago. While I know many would suggest that postponing the referendum sends out the signal that the Government is weak, I think that is better than landing itself with a no vote based on bad timing.

While the Tánaiste is technically right in saying that we wouldn’t need to come back and vote again if a growth package were eventually added to the Treaty – can he really justify putting only half the question to a vote? Would it not be wiser, and more democratic, to wait a few months and put a definitive position to the people?#

It would require more courage and leadership to postpone the referendum than proceed with it. This just may be the reason why it doesn’t happen
May 7th 2012

Independent Study Shows Ireland had 5th Highest Attendance at EU Council Meetings 2000 – 2010

by dsmooney, posted in Brian Cowen, EU, Fianna Fáil, Fine Gael, Government, Politics

The attached research paper Report on EU Attendance was conducted by Markus Johansson and Daniel Naurin of the Dept of Political Science at the University of Gothenburg and presented at the SNES spring conference in Uppsala 22-23 March 2011.

SNES (Swedish Network for European Studies in political science) is Sweden’s leading research network dealing with questions of European politics and governance.

The study examined 808 EU Council meetings between 2000 and 2010 and found that Ireland had one of the highest average Ministerial attendances at Council of Minister’s meetings, 5th out of the 27 member states.

The authors of the study argue that attendance is an integral part of EU engagement and reflects the priorities of the governments involved. Ireland’s position as 5th highest out of the 27 member states from 2000-2010 is a testament to Fianna Fáil’s committeeman to Europe and strong engagement

This exposes the hollowness of claims repeatedly made by Government Ministers and the Taoiseach that Fianna Fáil failed to attend EU meetings.

Rebel Ó Cuiv is risking a life in political exile

by dsmooney, posted in EU, Fianna Fáil, Politics

My column from today’s Evening Herald on Éamon Ó Cuiv’s Craggy Island Act

Craggy Island

 

If you think Fine Gael or Labour party backbenchers have it tough; spare a thought for Fianna Fáil’s sole backbencher: Éamon Ó Cuiv. He has been rarely out of the headliners since quitting as his party’s deputy leader and communications spokesperson.

Though he served as a Minister for the duration of the 1997 – 2010 Fianna Fáil led governments, it took a few disloyal acts as a back bencher to bring him to some form of public fame.

His newly found rebellious streak comes as a bit of a shock to those who remember his ministerial days, particularly his almost eight year stint as Minister for Community, Rural and Gaeltacht Affairs.

That department’s acronym (D/CRGA), coupled with his peculiarly laconic style, earned it the title Craggy Island during his tenure – though whether this was a reference to Fr Jack, Fr Ted Crilly or Fr Dougal was never fully established.

His reinvention as a latter day rebel is not his first metamorphosis. Despite his Man of Aran manner and demeanour he actually hails from the leafy and affluent, Dublin 4. His success at portraying himself as the archetypal westerner possibly owes as much to his lineage as it does to his conscious efforts.

His excellent track record as a public representation in West Galway, has gained him much respect in the party: almost as much as his position as Dev’s grandson.

This is the Catch 22 he seemed to have missed. While the reduction in the size of the parliamentary party has made him a bigger player, the cachet his political heritage confers is also somewhat diminished. The events of the past few years have reduced the currency value of dynasties in the new leaner Fianna Fáil. Isn’t the concept of dynasty incompatible with a truly republican party?

His outspoken comments on Europe, urging the party to a more Tory-esque euro sceptic position have not been the rallying cry he may have hoped for. Many share his view that Europe has not been working together in partnership or solidarity. They see that Europe’s “failure to act decisively and cohesively damaged its reputation and standing amongst its own citizens”.  But they do not see voting No as the logical or sane answer to that problem.

I put that last line in quotes as, significantly, it does comes not from an Ó Cuiv speech, but rather from Michael Martin’s February 9th address to Institute for International and European Affairs, Dublin.

Ó Cuiv’s belief that he is the lone voice criticising the EU does not stand up. Despite his contentions, voting Yes does not require one to draw a veil over the glaring flaws in what the EU have done in addressing the European banking and economic crisis.

While many in the party may be prepared to allow him the occasional euro-sceptic outburst, they draw a definite line at his idea that Fianna Fáil should be cosying up to Sinn Féin. That is simply not on the table for the vast majority of the party’s public representatives at national and local level.

While some see Ó Cuiv’s grá for such an arrangement as a product of the shinner’s relative weakness in his bailiwick, others suggest it exposes his ill-founded, romantic notions of reuniting republicanism.

The Shinner’s provo-ism is the antithesis of Fianna Fáil’s republicanism. The two strands are simply incompatible and have been for generations. For Ó Cuiv to imagine that they are reconcilable does a disservice to those who adhered to the constitutional republican path and underestimates the ambitions of those who espoused the provo alternative

The irony is that Ó Cuiv’s truculence runs counter to the approach his grandfather adopted. Dev believed that being an elected representative of a political party brought responsibility and required discipline. The party decided its policies behind closed doors and everyone stuck to the party line, whether they personally agreed with it or not.

While there is no desire to grant Ó Cuiv the martyrdom that some think he seeks, he may yet force their hand and find himself banished to a Craggy Island of his own making.

May 4th 2012

Is Government the Biggest Threat to a Yes Vote?

by dsmooney, posted in EU, Fine Gael, Government, Irish Labour Party, Policy
The next French President? François Hollande
(Photo taken from the Hollande Campaign site)

Though the early polls have been positive I am getting a sense that the No side may picking up some momentum as we near the May 31st polling date for the Fiscal Stability Treaty Referendum.

One of the main grounds for this sense of foreboding may indeed be the May polling date itself. I fear having the poll this early may prove the biggest threat to a Yes outcome for three reasons:

1. It allows no side to raise the prospect of a second referendum later in the year. The more astute and sophisticated side of the No campaign is starting to run an argument that goes as follows: We have voted twice on the last two EU treaties.In each case we have come back with a better deal the second time. This Treaty does not come into force until January 2013. We have the time to Vote No now and use the following months to go back and get a better deal and then Vote Yes later in the year. A late September polling date would have denied this argument to them

2. This Sunday see’s the first round of the French Presidential Elections, The Second roubnd of voting will be two weeks later at the beginning of May. While Sarkozy has had a good campaign to date and has closed the gap in the first round the polls there still suggest that Francois Hollande will win the Second Round by approx 55:45.Hollande is standing on recovery platform that rejects Sarkozy’s austerity plan and talks of renegotiating the Fiscal Compact,

While this position may be dismissed as a Gallic version of Gilmore’s “Frankfurt’s Way or Labour’s Way” – ie a promise that sounds good in the campaign but doesn’t survive past polling day – it does look like Hollande is serious. His determination to imeddiately set out a renegotiation the Fiscal Compact to include a growth programme, Euro Bonds etc has probably been strengthened by the attempts of Merkel and other Centre Right EU leaders to snub him.

We will be going to vote during the first days of a Hollande presidency, the background noise to ouyr vote to pass the existing threaty will be his moves to renegotiate that very treaty – almost making a farce of that vote. The politically astute move for our Government would have been to hold off until September and see if Hollande will make a difference.

3. The one great lesson learned from previous referenda, particularly NIce I & II and Lisbon I & II is that the public needs a longer run up/lead in period to tease out the issues. The traditional three or four week campaign has been found to be insufficient, particularly in the absence of “on the ground” campaigns.

Though polling day is about six weeks away there is little sign of that debate is starting yet. Will the Refendum Commission have the time to do the job? Based on the last referendums, it would certainly appear not.  The Tanaiste and Minister for Foreign Affairs had a thirty minute slot on RTE 1 last Saturday where he could have used 5/6 miinutes to explain why voting Yes is important. He didn’t. He chose instead to just give the poll a passing reference, 125 words in a script over 3100 words long. “referendum” featured only once in his script.

While the timing of the polling day is just one factor, it may prove a crucial one. The Treaty should stand or fall on its own contents alone. I am on record here as having my own qualms about the Treaty (see my post here on why I will be a reluctant Yes voter). The debate will be essential. This vote is not like others, we do not have a veto, we cannot delay or deny the progress of this Treaty by our vote alone. The EU has been horrendously slow to act to save itself from the start of this crisis. It has chosen the path of half measures over swift decisive action – usually at the behest of a Franco-German leadership that put domestic political considerations ahead of pan european ones. But we should not be blind to the developing EU real politik.

The appointment of Simon Coveney and Joan Burton as the Fine Gael and Labour campaign directors somehow does not imbue one with a sense of confidence. Coveney’s nomination does echo Charlie Haughey’s appointment of Paddy Lalor as Fianna Fáil national director of elections – a move that spurred the late Frank Cluskey to comment: “There’s confidence for ya”

Cowen Talks Ireland Up Seeking Inward Investment

by dsmooney, posted in Brian Cowen, EU, Politics

The speech at Washington DC’s Georgetown University by former Taoiseach, Brian Cowen, has attracted some comment since it was reported last week in the Financial Times and Irish Times. Much of that comment has focussed upon just about everything about from its contents. It is a well drafted and cogently argued analysis of the crisis that befell both Ireland and the EU and well worth reading in full: Speech By Fmr Taoiseach B Cowen – 21.03.12

Given the venue and context it is evident that this was meant as a low key, considered and informed contribution and not as a political foray. While I think it will, in time, be seen as an important analysis of the situtaion from 2007/08 onwards. I also think it is important to note how the former taoiseach took the opportunity present to talk Ireland up and to touts for business and investment for Ireland. This is particularly evident in the final paragraphs of the speech:

“I believe Ireland is one of the best locations in the world to establish and to grow a business. This is not just rhetoric but is reflected in the rapid on-going overseas investment which is occurring in Ireland. Ireland is not just open for business but as, I believe, any independent assessmentwould indicate it is among the best places in Europe to start and grow an international business. This will ultimately pay off for our citizens. Indeed all of the fundamental strengths which prior to the crisis meant that Ireland had one of the highest growth rates of GNP per capita among advanced countries for a very long period are still in place and in many respects our advantages have improved in terms of increased cost competitiveness.”

 

 

I Don’t Like The Fiscal Compact Treaty, But I Will Still Vote Yes

by dsmooney, posted in EU, Government, Policy, Politics

My thoughts on why I am not impressed with this Fiscal Compact Treaty, but why I will vote for it and urge others to vote Yes too.  

A few nights ago I was on the cusp of penning a piece as to how it was possible to be a committed pro European and still urge a “No” vote at the forthcoming Fiscal Compact Referendum.

My reasoning broadly ran as follows.

  • While the Fiscal Compact does contain some important measures that would have addressed the fiscal problems that others, not Ireland, had experienced in the run up to the crisis – it effectively does nothing about the core issue facing the EU and the Euro: the dysfunctional European banking system.
  • The EU Council and Commission have wasted over two years taking pointless half measures that tinker about with the symptoms of the problem while studiously ignoring the core problem: the banking crisis.
  • This fiscal compact is just the latest in a series of well intentioned, but minimalist attempts to assure the markets that it ready to address the crisis. Like the others it will fail.
  • What the EU needs now is a short sharp shock to jolt it into effective and decisive action. By decisive action I mean tackling the banking and credit crisis head on and bolstering the role of the European Central Bank to become the lender of last resort.
  • Ireland can not only deliver that shock by rejecting the Fiscal Treaty as inadequate and lacking substance, but it can take the lead – particularly among the smaller, peripheral nations – in demanding that the Commission, particularly President Barroso stop acting as the servants of the French & German governments and get the EU back to being a Union of countries that work together, in partnership and in solidarity for our mutual benefit.

That was my broad theory.

It is not heresy or anti European to say that the Fiscal Compact Treaty does not address the biggest problem facing the economies in both the EU and the Euro.

The point is not that the Fiscal Compact goes too far – it is that it is too one sided. It addresses a secondary problem – not the primary one. It almost completely omits the measures required, specifically on the ECB, to tackle the real problems facing us all.

As I was writing the piece I realised that while I still fully believe in points 1 – 4 the reasoning underpinning Point 5 was fatally flawed.

Ireland rejecting the Fiscal Compact will not be seen as us rejecting it as a half measure. It will be seen as Irish petulance. We have thrown down the gauntlet before – on Nice 1 and Lisbon 1 for reasons that most in the EU failed to grasp.

The Taoiseach and his Ministers have shown not the slightest interest in showing Leadership at the EU Council or of building any consensus among the smaller peripheral countries.

Rather the Taoiseach has been content to roll over and have his belly tickled (metaphorically – I hope) by the big two, and hope that no one will ask him any difficult questions.

He has consistently underplayed his hand for the past year. Stories that talked tough and banged the table at his first Council meeting yielded nothing. Since then he has been content to keep his head below the parapet. The same applies to Eamon Gilmore.

There is nothing to suggest that either are capable of building a consensus across the EU. The reality is that neither have attempted it. Their antithesis to travelling to meet other leaders or hold bi-laterals here is mind boggling, especially when you consider how they howled in opposition that the last Government was allowing Ireland’s reputation to slip.

None of this augurs well for Ireland’s forthcoming EU Presidency, but that’s another story.

Those pointless rejections of Nice 1 and Lisbon 1, are now coming back to bite us. Those who urged us to say No then, are once again in the vanguard urging us to Vote No once more. Their reasoning has not changed. They are as Eurosceptic and anti European as they ever were.

Saying No now would be seen as biting the hand that feeds us – even when that hand has been making a few bob from what its been doing.

Worse still saying No would not gain anything by saying No – except to put ourselves in some undefined limbo beyond the revised European Stability Mechanism. Whereas our saying No in Nice 1 and Lisbon 1 held up the process of ratifying those treaties, saying No now will halt nothing.

We have no veto. We have no bargaining chips on this one. There is no point in threatening to pull the trigger when everyone else knows we have no ammo in the chamber.  UCD’s Dr Ben Tonra makes this point very clearly in an excellent post on the politicalreform.e page here.

The conclusion is that we must pass the Fiscal Compact treaty and then use that passing of the Treaty to build a coalition of smaller countries across the EU to tackle the real problem facing us.

I would love to think that saying No would urge the EU into actions that are long overdue. The sad reality is that it will not.

So, just like the French Socialists who were compelled to vote for Chirac in Round Two of the 2002 Presidential elections, rather than seeing Le Pen slip through, I may be taking a disinfectant mat with me to the polling station as I vote Yes.

I want a better treaty. I want a treaty that tackles the real problems. This treaty itself even acknowledges the need for a further treaty.

If passing this one is the price we must pay to get to that point – then let us do so – and quickly.

To burn bondholders or not to burn them – is there a third option?

by dsmooney, posted in EU, Politics

Is it any wonder there is so much confusion about what to do with the bank bondholders?

Less than twelve months ago (February 10th to be precise) Leo Varadkar was saying:

“Any bank coming to us looking for more money is going to have to show how they are going to impose losses on their junior bondholders, on their senior bondholders, and on other creditors before they come looking to us for any more money. Not another cent.”

That was before the General Election. Eight months after the election; the now Minister Varadkar had changed tack and was saying:

What’s happening in relation to the Anglo bondholders is they’ll be paid from Anglo’s own resources, from the sale of its own property assets, for example.

By last weekend the line had developed further. On Sunday he was  says that the Government “had to weigh up the costs on the one side and the risks on the other.” and that not paying the €1.2billion of Anglo bonds due this Wednesday: “…would have implications for other State companies like ESB and Bord Gáis,”

It is probably a littler bit unfair to single out Minister Varadkar like this. He was saying pretty much what everyone else was saying in FG during this period. His skill and talent was that he said it more directly and concisely than almost any of his colleagues. It is what makes his quotes more memorable.

Whatever about the changes in the Fine Gael script, two bigger truths have not changed over the past year. The ironic part is that these truths are contradictory.

The first is that the ECB is still holding to its line that bond holders should not be ‘burned’. By that they mean that bond holders should not be forced to accept any reduction in the monies due to them.

The other is the reality that there is a very active market in bonds being sold off at a discount in return for hard cash. These discounts can be fairly hefty, particularly where those bonds have a tasty coupon included.

This trade in bonds was touched upon at a recent seminar on the issue of offset debt, hosted by Thomas Pringle TD and how it could ease the plight of those in negative equity.

Some bond holders are deciding, in their own business interests, to mitigate their losses and sell bonds at a discount. Their rationale is that a bird in the hand is better than two in the bush: a not uncommon business approach.

They sell the bonds on to vulture capitalists who buy the bonds at a 30, 40 or even 50% discount. They retain the bonds face value, and so, they stand to make a hefty profile when the bonds are paid off.

While bondholders may choose to do this, the ECB says they must not be made to do it – except in the case of Greece, but let’s put that to one side for the moment.

This leaves a classic Catch 22. Investors, speculators and traders are selling bonds between each other at varying hefty discounts, with the prospects of making even bigger profits.

It is one thing to say that bond holder’s rights should not be ridden over and allow the market to function, but telling European taxpayers that they should not enter the open market and offer to buy back those bonds, is another.

Its like signing an IOU and watching it being traded among your friends for less than its face value, but being told you cannot dare attempt to buy it back: even if the guy currently holding it would be willing to sell it to you.

Ireland cannot do a solo run and give two fingers to the ECB, but it needs to start canvassing opinion around the EU table to start looking at this issue again.

The noises coming from the new Belgian government, coupled with the prospect of a new occupant of the Élysée Palace come the summer suggests it may be a route worth exploring. Something, perhaps, for the Taoiseach to consider as he heads to Brussels?

Enda’s State of the Nation fails to Inspire

by dsmooney, posted in Brian Cowen, EU, Fine Gael, Politics

An Taoiseach’s national address was well intentioned but badly executed. 

To his credit; from the moment he became Taoiseach, Enda Kenny has shown that he realises the importance of talking to people. He has demonstrated regularly that he knows the job of Taoiseach is not just the traditional one of government Chairman or Chief.

He understands that it is also that of the “confidence giver in chief”, particularly at times of crisis like this. The person who tells the rest of us what is happening and how he and his team have a plan to get us through the difficulties.

Television has not been his friend. Neither have the formal set pieces: Ard Fheis speeches etc. He has been more comfortable in informal situations, particularly those where his words and message are delivered unmediated: live to a flesh and blood audience.

For all these reasons, last night’s TV “Address to the Nation” was going to be a big ask. The fact that it was billed as the most important address he would ever give, the “speech of his life”, did not help.

In the event, the speech did not succeed in achieving its desired result.

A speech is not about offering a litany of facts and figures, it is about putting across a clear message. The Taoiseach acknowledged this truth in his address saying that he was “outlining the Government’s strategy.”

The pity is that while this may have been the aim, the content and delivery failed to convey any sense of strategy or coherent plan.

The address should not just have been another element of the package of budget speeches: but an opportunity to set out a vision of where we are going and how we can get there together.

It could have been a vision of the kind of Ireland the Taoiseach wants to see in place by 2016, the centenary of the Easter Rising and an exposition of how he sees us achieving that.

Instead of the expected “state of the nation” we got a curiously cold and passionless presentation that omitted both vision and purpose. A bland party political broadcast that seemed, in part, to be an attempt to explain both why The government was now implementing policies it had opposed and why it had abandoned promises made only nine months ago.

It was less an “address to the nation” and more an apology from the leader of Fine Gael.
As the Taoiseach and his advisers are now starting to realise there are some very obvious risks with such addresses.

The expectations were high.

People expect to be better informed and maybe even more confident after the broadcast than they were before. Looking at the online commentary as I write this, I do not see this being the emerging consensus. Most politically unaligned posters appear to be seeing the address as a “wasted opportunity”.

But there are other risks too. The leader comes on TV to say that things will get better… but, they don’t. As a consequence we lose faith in them.

The other worry is that the Leader comes on TV to say that things are even worse that he had suggested they were… the opposition have a field day using his own words to attack him and his popularity plummets

Though I have no firm evidence for thinking this, I believe that these were the two of the key factors behind Brian Cowen’s reluctance to make a similar address in 2008/2009. The one issue Cowen would not have had to address if he had chosen to make such a speech then is the crisis facing the EU and the Euro.

In my view the Taoiseach made a mistake in not devoting more of his script to this crucial issue. Not only did the EU section amount to less than 10% of the total text, the section was bland and failed to seriously address any of the issues facing us.

In other EU countries they are talking of having “less than a week” to save the Euro. Within the coming days we will learn more of the Merkel/Sarkozy plan to fundamentally change how the EU and the Euro function, but here our Taoiseach reduces the matter to almost an afterthought in his keynote address to the nation.

It kind of sums up the whole exercise, well intentioned, but poorly done.

Twitter:  @dsmooney