Categories
Banking

Cyprus : The Burning Season

Cast your mind back four or five years, to when the full extent of our banking collapse became apparent.  In particular, look at that fateful night in September 2008, when the two Brians decided to guarantee the entire Irish banking system, including two of the worst banks in the history of finance: Nationwide and Anglo.   Nobody knows why they chose to commit an act of such monumental stupidity, but we’ve been living with the consequences ever since.

Barely a month ago, the government was claiming a great victory for renegotiating the repayment schedule of the Anglo promissory notes, and it’s worth pausing here  to remind  ourselves what exactly that means.

We’re no longer paying the Anglo bondholders.  They have all their cash.  They’ve already been given their money back, even though the  business they lent it  to went bust.  The Irish State made sure that no bondholder would lose out, even though they had taken a risk in advancing the money to the failed bank.  In order to finance this, the government issued promissory notes enabling the Central Bank to print money, and each year the government agreed to pay several billion back until eventually the value of the promissory notes was written down.  That’s still the case.   We’re still on the hook for thirty-something billion euros which we borrowed  to make sure those who gambled on Anglo didn’t suffer.

Enda Kenny’s great victory was nothing more than getting a concession over the length of time we have available to pay back the money.  But we still have to pay it.

Contrast this with the Cyprus bailout, which involves burning even the senior bondholders who, in all likelihood, will be lucky to get away with a haircut, and who, more probably, will lose everything.

Why was it impossible to do this in Ireland in 2008, but five years later, perfectly acceptable in Cyprus?

Could it have to do with the fact that the Cypriot politicians were outraged at the injustice being inflicted on their citizens and pushed the ECB to the brink?

Lenihan didn’t do this, and neither did Cowen.  When Trichet was making his midnight phone-calls, Lenihan, so proud of his French language skills,  didn’t tell him va te faire foutre, as he should have done..  When Kenny and Gilmore took over, they were just as craven, continuing to pay off debts we, the Irish people, did not incur, until every last bondholder was looked after.

trichet cowen

Cyprus might be in serious trouble right now, for various reasons, but when they get out of this, they won’t have the legacy of a debt raised to pay off international investors who knew they were taking a risk and factored that into their calculations.

We, on the other hand, will be paying that kind of debt for generations because our politicians didn’t have the guts to say no to the ECB, even when the IMF was saying that bondholders didn’t necessarily need to be paid in full.

It’s true that the Cyprus situation is robbery, but no more so than the robbery that continues  in Ireland to ensure that vast hedge-funds are protected from their own mistakes.

Categories
Economy

Cyprus — Bucking the ECB

Remember all those warnings about what would happen if we didn’t bail out the sharks who owned our banks’ bonds?  The ATMs would stop giving out money, the banks would all collapse, little children who could neither walk nor talk would be running in the street, cursing their maker, the sun would rise in the north and sink in the south, the world would end.  And KPMG would get no more fat government contracts.

The people of Foxrock huddled by their plasma-screen radios listening for the crackling words of our leaders from deep in the Merrion Street bunker, not knowing from one moment to the next if their second Merc was safe, nor even how many buy-to-let properties they might be reduced to.

Dark days indeed but in the end, the elected representatives did the right thing by KPMG and turned the debts run up by a few crooks into a legal obligation on all of us.  The Battle of Ireland was won, if only by a whisker, and the people of Foxrock rested easy again.  Young Fiachra would have that month in Zermatt with his school pals after all and Dearbhfhorgaill could afford to buy that Lexus SUV and still repeat Second Orts.  Because she’s totes, like, worth it?

Never was so much done by so many for so few.

Bank of Cyprus

Guess what, fools?  As pointed out widely at the time by many sensible folk and also by me, it was all a scam, as the Cyprus parliament has shown.

In the face of similar threats from the ECB, they said no.  They voted unanimously to reject the moronic, idiotic, ham-fisted attempt to rob the people who held deposits in Cypriot banks, and quite properly so too.

Now, I don’t know how many Russian oligarchs have money in the banks of Cyprus.  And I don’t know how much of that money is dirty, though it seems obvious that most wealthy Russians got there by dubious means,, but it doesn’t matter.  Collective punishment is wrong, especially when that punishment is inflicted on small people who have their life savings on deposit.

It’s theft, in other words, and here’s the irony of it.  According to a recent paper by Lee Buchheit and Mitu Gulati (with thanks to the Prof), a large chunk of the next Cypriot bond to mature has been bought at a discount of up to 30% by international hedge funds, otherwise known as sharks.  What does this mean?  Simple: it means that the original bondholders have already been stiffed, and the bailout serves only to give the sharks a huge return on their investment.  I wrote about this some time ago in relation to Roman Abramovich’s purchase of Irish bonds, for which we, the patriotic Irish, paid him full face value.

Cyprus is not playing the ECB game and guess what?  The ECB blinked first.  They backed down.

This gives the lie to every word of nonsense Fianna Fáil, Fine Gael, and, to their endless shame, the Labour Party, used to intimidate the Irish people and it shows quite clearly that all the threats were hollow.   We could have safely allowed Anglo and Irish Nationwide to collapse, with no consequences at all, since these were not real banks, but instead our elected representatives chose to cower beneath ECB threats and inflict their losses on us and on our grandchildren.

The leading actor in this farce in Germany, and so much for the myth of German efficiency.  At every stage of this crisis, all their politicians and technocrats  have demonstrated is a heavy-handed unimaginative arrogance.  Inflexible, overbearing and domineering, they’re reinforced every stereotype we’ve ever known and added a few, since we wouldn’t normally associate stupidity with the Germans.

Study the Cyprus farce and be very angry for what the ECB, driven by Germany, has done to Ireland.

 

__________________

Elsewhere: Germany’s dilemma

 

Categories
Economy

Fifty Shades of Property Tax Grey (well, brown)

So the revenue have produced a heatmap of the country, at DED level, to give you a guide as to the property tax you will pay. Or, not.

Its fifty shades of brown …well, seven anyhow. Take a look at Kerry and Kildare (yes, yes, I have two houses…one in Kildare where I live, and the other the old family home in Kerry) Anyone want to tell me that this is clear? Why not seven distinct shades?  Yes, one can increase the contrast but then if its too high and one is on the border of two bands you cant see….

screen-shot-2013-03-10-at-14-36-48

 

screen-shot-2013-03-10-at-14-40-01

Contrast this dog’s breakfast with some of the work by AIRO and we see night and day.

I’m going to send a copy of The Visual Display of Quantitative Information  by  Edward Tufte, the best book ever on graphics, to the revenue for Easte   Maybe the Troika have insisted we sell off all our colours or something.

 

_________________

Also posted on Brian’s blog, here.

Categories
Economy

Anglo Promissory Notes Illegal, Says Noonan

For once, I don’t know what to say, so maybe the best thing to do is rely on our Finance Minister.  After all, who could possibly be  more reliable than this man who has just rescued our nation from penury?

 

Michael Noonan

Interviewed on radio, Michael Noonan explained that the European Central Bank agreed to the Anglo financing deal because it was slightly less illegal than the existing promissory note arrangement.

Really?

I thought the ECB were sticklers for the rules.  I thought that was the whole reason why it took so long to get a deal.  But no.  Apparently, it took so long to get a deal because the ECB wanted to stick with an illegal arrangement.  So much for rules.  Who knew that the ECB were so against doing things properly?

Apparently, according to Noonan, there was no point going to the ECB and saying, look, this Anglo deal is completely illegal.  The ECB would have said legal schmegal, in Noonan’s opinion.  Instead, he had to come up with something slightly less illegal, in the process making certain that for ever more, the Anglo debt would be visited on the Irish people even though they didn’t incur it.

I’m delighted that Michael Noonan is happy tonight after his victory, but did it ever occur to him that there might have been an alternative strategy?  After all, since he himself acknowledged that the promissory notes were illegal, did he perhaps consider pointing out that fact to the ECB and walking away from the obligation?

Apparently not.  Instead, we’re now celebrating the fact that our children and grandchildren will end up paying a debt none of us caused.

 

Categories
Economy

No Deal on the Anglo Burden

So much for the promissory note deal.  Despite all the posturing by Kenny and Rabbitte, we’re as far away from getting a break as we ever were, so why precisely would we continue with this nonsense?  Fitzy and Fingers between them ran up a loss of €34 billion in their privately-owned lending institutions.  These companies had nothing to do with mainstream banking and even less to do with the broader economy.  They were little more than funding vehicles for the small bunch of cronies who destroyed our country.

If they had been allowed to collapse, no-one would have suffered except the international investors who routinely calculate such ups and downs into their plans, but the two Brians decided to bail them out anyway by placing a huge burden on the Irish people.  Of course, both Anglo and Irish Nationwide are dead banks  that will never trade again and never make a profit.  Therefore, the huge cash injection went straight to the bondholders and the huge corresponding debt burden went straight onto the shoulders of our children.

Why did Brian and Brian decide to bail out the investors in two failed businesses?  Perhaps we’ll never know.

Would they have done the same thing if Anglo and Irish Nationwide happened to manufacture clothing or hamburgers?  Almost certainly not, and yet, they chose to enslave future generations of Irish people in order to protect the investors in these two private companies.

Anglo-Irish-headquarters--006

The consequence is that every year for the next ten, our government must pay €3 billion to pay off this awful promissory note.  Not to the bondholders, remember, since they already got all their money, but to our central bank which, in turn, destroys that money in order to balance the books.  It’s utterly absurd.   €3 billion every year, to pay for the incompetence of two failed banks, even though we don’t own the debts they ran up.  This money is the difference between decency and misery, between people dying on trolleys or going home alive, between police protection and rampant crime.

That’s the cost of bailing out the Anglo billionaire investors to make sure we won approval in Europe and got a pat on the head.

Fast forward to today.  Enda Kenny, Pat Rabbitte, Eamon Gilmore and Michael Noonan in their various ways have reassured us that a deal was on the cards.  Draghi was behind it.  Von Rompuy was behind it.  Osborne was in favour.  Barroso thought it should happen.  Olli Rehn said it was only right.

Well, guess what?  The governors of all the central banks have said no.  There isn’t a deal for Ireland, even though we took onto ourselves a huge burden in order to save the Eurozone.  It turns out that paid officials, and not elected representatives, are in charge of Europe.

Maybe it’s  time to stop being the best kids in the class and instead threaten to pull down the whole tent on top of everyone, just as we should have done nearly five years ago when the whole scandal first began to emerge.

The French would do it in a blink, but of course, they have some self-respect, unlike us.

 

Categories
Economy Politics

Shane McEntee

I don’t know if Shane McEntee is the first Irish government minister to take his own life, but I do believe he is the most prominent victim of the savage austerity programme inflicted on the Irish people.

For reasons nobody will ever know, the junior agriculture minister felt it was no longer possible to continue living, but the facts seem to suggest that he was unable to cope with public criticism in the aftermath of the recent savage budget.

From what I’ve heard of Shane McEntee, and from speaking to people who knew him personally, he seems to have been a thoroughly decent individual.  A spear carrier, admittedly, rather than the leading  actor, but a solid man with a good heart.

shane mcentee

Enda Kenny is reported to be shocked by the loss and I believe he probably is.  For all his weaknesses, Kenny is not cast in the same mould as some who have gone before him and even though I constantly lampoon him in these pages, I don’t believe he’s either corrupt or cynical, unlike some of his colleagues.

Could it be that this appalling loss might finally bring home to our government the reality of their policies?   Perhaps they might finally realise it’s not a game of numbers, but a deadly-serious process in which people live and die by the decisions of Enda Kenny’s cabinet.

As I said, I don’t know anything about Shane McEntee apart from the fact that he leaves a wife and children, and that he was known to be a kind-hearted man.

It’s very hard to escape the comparison between this genuine man who suffered mental anguish and those politicians before him who created the problem and who showed not the slightest concern for the harm they caused.

There’s no point in platitudes.  Shane McEntee’s family will suffer their loss forever.  A husband and a father has been lost and can never be replaced, but perhaps in his final moments, he might have salvaged something from the tragedy if it causes Enda Kenny, Michael Noonan and the rest of them to reflect on the real, tangible consequences of the actions they are taking in order to placate international financiers.

Maybe it’s time we got back to real, human values, as they did in Iceland, and put our people’s welfare ahead of  demands laid down by the ECB.  Here in Ireland, we love to talk about our sense of community.  It’s what we base the so-called Gathering on, so maybe it’s time we acted on it instead of reciting empty formulas all the time.

Categories
Economy

Gallia est Omnis Divisa in Partes Tres – Or How the Germans Beat Caesar

Gallia est omnis divisa in partes tres, quarum unam incolunt Belgae, aliam Aquitani, tertiam qui ipsorum lingua Celtae, nostra Galli appellantur. Hi omnes lingua, institutis, legibus inter se differunt. Gallos ab Aquitanis Garumna flumen, a Belgis Matrona et Sequana dividit. Horum omnium fortissimi sunt Belgae, propterea quod a cultu atque humanitate provinciae longissime absunt, minimeque ad eos mercatores saepe commeant atque ea quae ad effeminandos animos pertinent important, proximique sunt Germanis, qui trans Rhenum incolunt, quibuscum continenter bellum gerunt. Qua de causa Helvetii quoque reliquos Gallos virtute praecedunt, quod fere cotidianis proeliis cum Germanis contendunt, cum aut suis finibus eos prohibent aut ipsi in eorum finibus bellum gerunt. Eorum una, pars, quam Gallos obtinere dictum est, initium capit a flumine Rhodano, continetur Garumna flumine, Oceano, finibus Belgarum, attingit etiam ab Sequanis et Helvetiis flumen Rhenum, vergit ad septentriones. Belgae ab extremis Galliae finibus oriuntur, pertinent ad inferiorem partem fluminis Rheni, spectant in septentrionem et orientem solem. Aquitania a Garumna flumine ad Pyrenaeos montes et eam partem Oceani quae est ad Hispaniam pertinet; spectat inter occasum solis et septentriones.

In fairness to old Caesar, he might have had his faults and they might have been many, but he could certainly write.  He knew his Belgae from his Aquitani and his Vercingetorix from his Obelix.  He didn’t give a rat’s arse about the Helvetii up there on their mountain counting their money, but he kept a close eye on those Germanii, as well he might, considering the fact that the Visigoths duly went on to sack Rome and bring the western empire crashing down only 500 years later — an eyeblink in the life of an empire.  Caesar was always a man for the long game, even if it didn’t work out all that well for him personally.  He knew what sort of mischief those Germanii could get up to and he was right.

I was listening to Legatus Germaniae this morning on TodayPK as he lectured us on our wayward and spendthrift ways.  You have the domestic problem, created here in Ireland and you must solve it here in Ireland, or words to that effect, give or take the occasional Dr Strangelove tic.

Not entirely correct, Legate, if I may say so.  You have a lack of prudent lending to people who will repay the loan, and that happened in Germania under the watch of the Divine Empress Angela.  If we must police our delinquent argentariae and take the consequences when we fail, then so must you, but it seems that Europa est omnis divisa in partes tres.  And partes tres consist of Germania / Gallia calling the shots in the Eurozone to protect their own argentariae, Britannia standing aloof and ready to fight off the next wave of invading barbarians, and finally a rag-tag bunch of mendicants — the Hiberniae, the Iberiae, the once-proud cives Romanum reduced in circumstances and of course, let’s not forget those swarthy denizens of Achaia.

What’s to become of it all?  Will Legatus Germaniae climb aboard his prancing charger and become Proconsul Germaniae in Hiberniae?

To hear him talking on the radio this morning, anyone would think that Dr. Eckhard Lübkemeier was already being fitted for his helmet and breastplate as he explained to us how Germany had rescued us by giving us a loan.  What Proconsul-elect Lübkemeier neglected to mention was that every penny was handed over to Anglo-Irish Bank, Irish Nationwide, AIB and BoI and then all handed back to the German banks it was designed to rescue in the first place, with the Irish citizens picking up the cost.

Cives Hiberniae must have been shaking their heads as they blew on their thin gruel and contemplated another day of austerity offered up to the household gods of European banking stability while the Herr Doktor clicked his heels and summoned his Praetorian Guard.

Have my chariot prepared.  I am going to survey my territory.

Me?  I’m off to the vomitorium.

 

Categories
Economy

Budget 2012 – Taking from the Poor and Giving to the Rich

Bludget.  What a wonderful word.  Bludget.

The nation should be eternally grateful to Marian Finucane for coining such a gem, just as I am myself.  I for one welcome our Troika overlords and when the government bludgets us into submission tomorrow, it will be a great comfort to know the name of the abuse being inflicted on us, while we cower and shiver beneath the blows.

You see, here’s the thing: this is the best country in the whole world for following orders, and there’s a simple reason why.  We never knew a time when somebody wasn’t telling us what to do.  If it wasn’t the Brits in the 18th century, it was the Brits and the priests in the 19th century, or the priests alone in the 20th.

We’ve actually never had a time in our history when we had the confidence to stand up and assert ourselves in a quiet, firm, non-violent way, and say NO.  We are afraid of everything because countless generations have been conditioned into that frame of mind, and on the rare occasions when we try to break out of our fear, we replace it with aggression.

As I’ve said many times before, we as a nation are infantile and that manifests itself in the people who lead us.

 

 

I suppose there’s no more ludicrous example than Enda Kenny, a man for whom the phrase stuffed shirt might have been invented.  I’ll admit that he’s not a crook, but that’s hardly the qualification of choice to be a prime minister.  Enda is out of his depth because he lacks inner dignity, just as the rest of our government does, and just as the rest of our politicians do, with one or two exceptions.

What do I mean by inner dignity?  I mean an ingrained of self-worth on his own behalf and on behalf of the people he claims to represent, a sense of pride that might erupt into a cold burning fury in the face of injustice, just as it did among the people of Iceland.

I do not mean the sort of pompous rigidity that Enda Kenny seems to possess in such abundance, or the gauche and fake formality that Irish politicians love so much in the company of those they perceive to be their betters.

Does Enda Kenny possess inner dignity?  No, unless you consider it acceptable that any prime minister should tell the world his people are mad.  Has any Irish leader since independence possessed inner dignity?  Not that I can recall, though I’m open to reminder.  I have seen no evidence of outrage among our leaders at the crime inflicted on this country by the previous government.  Instead, in an act of the most obscene, supine docility, Kenny, Noonan and the rest of them have continued to push the suicidal policies initiated by the two Brians.

There is no sense of outrage, unfortunately.  Only a sad and embarrassing desire to please, wrapped up in the phony language of business, a jargon designed to lend spurious credibility to bankrupt ideas.

Brian Lucey, an occasional contributor to this humble organ, has drawn up an Austerity Dictionary that hits many nails on the head.

 

Defaulter —   a word which cannot be seen on the forehead of a modern Irishman due to his deeply tugged forelock

Democracy — [Error: File not found]

Government — See Troika…

Public services  —  Irish government euphamism for debt amassed by banks, bondholders and unsecured bondholders

4 —  amount by which BBC salaries are multiplied to get equivalent levels at RTE

Austerity [n]  — The taking of money from passive citizens and giving it to wealthy gamblers.

 

And so on and so on.  Feel free to contribute your own on Twitter using #austeridictionary.

 

Before I go, let me just mention something I’ve often spoken of here.  Energy.

Our friends in the Troika have identified every last little cut, every penny that in their view should be pinched, and yet they seem to have been remarkably silent on the subject of gas and oil.  They don’t seem to have said a word about the fact that we give it all away free to the multinational energy companies.  Now, I know what people will say: if we charged them for royalties and shared ownership, they wouldn’t come here.  And to that, I’d say, so what?  Since we get nothing for our energy resources, why don’t we just leave the gas and oil in the ground until they’re really valuable instead of giving them away for nothing?

The Troika are fairly trenchant when it comes to certain kinds of generosity, such as the generosity that allows old people to live in some sort of frugal comfort, or the generosity that enables poor families to feed and clothe their children, and yet they stayed remarkably silent when it came to other forms of generosity.

For example, when it came to our insane generosity towards the bank bondholders, they had no comment at all, and when it came to our world-beating generosity to multinational conglomerates such as Royal Dutch Shell, there wasn’t a peep out of them.  They seem perfectly happy that we get nothing at all – nothing! – from the people who take our oil and gas.

Why would that be, do you think?  Why are they so quiet when it comes to corporate giveaways?

 

__________________

Previously: the Corrib energy theft

 

Also

Re-inventing Ireland. Time to grow up.

Ireland Needs Vision and Focus
The Non-Fighting Irish
The Loss of Local Irish Accents

Categories
Economy

Sean Quinn Goes To Jail as Anglo Calls in the Mafia

How do you get half a billion dollars back from Russian crooks?  There’s only one way.  You pay protection money to the Russian Mafia, which is exactly what the former Anglo-Irish Bank, is doing.  After the Quinns’ shenanigans, attempting to put assets beyond the reach of IBRC by hiving them off to something called IPG, the International Property Group, which controls up to €400 million, IBRC found itself stuck in a quagmire of shady legal detective work and dodgy Russian lawyers.    Anglo recently lost control of the €180 million Kutuzov Tower in Moscow after a Russian court reversed a previous decision, and now it feels it has no option but to enlist the help of a strong local partner.

For strong local partner, read The Sopranos multiplied by a thousand.  These guys are worth €50 billion and they have annual profits of €2 billion.  They don’t just do Construction and Refuse like your average New Jersey mobster.  No.  According to their website, they have a banking presence in Russia, Ukraine, Belarus, Kazakhstan, the Netherlands, Cyprus, the United States and the United Kingdom.  That division has 23,0000 employees, 70,000 corporate clients and nearly 7 million individual customers, and that’s just the bank.  Their oil business is worth €4 billion, employs 50,000 people in Russia and Ukraine and pumps 2 million barrels of oil a day.  They own 3,000 supermarkets, the biggest telecomms network in Turkey and they supply water to eight cities in Russia and the Ukraine.

Alfa, of course, was set up by the seemingly endless stream of oligarchs who emerged under Boris Yeltsin, obscure people with no major wealth, who suddenly became owners of vast oil, gas and mineral resources.

Alfa is a consortium of four such men:  Mikhail Fridman, Len Blavatnik, Viktor Vekselberg and German Khan.

Fridman started his career by scalping tickets.  He founded Alfa Group in 1989 at the age of 25 with few visible assets but is now worth about €12 billion in personal wealth.

Blavatnik is a Russian American who, at the age of 29, founded Access Industries and made diversified investments in Russia just after the collapse of Communism.  His personal worth is about €8 billion, give or take.

After working as a State employee for many years, living on a State salary, Viktor Vekselberg prospered when Yeltsin took power, becoming joint owner of TNK, one of the biggest oil and gas corporations in Russia.   He made his first million selling copper from old cables, but now owns a collection of Fabergé eggs.  Vekselberg is worth about €10 billion.

German Khan is a colourful character.  Director of the TNK-British Petroleum joint venture, he’s reputed to enjoy Berlusconi-style bunga-bunga parties at his hunting lodge.  According to the BP chief operating officer, Khan believes The Godfather is a manual for life.  He claimed that Khan once turned up for dinner carrying a chrome-plated pistol.

That’s Alfa Group for you.

This isn’t Martin Foley, the Viper, we’re talking about.  This isn’t Harry Dean Stanton, the Repo Man, flinging dead rats into open-topped convertibles.

It isn’t, for that matter, poor Seán Quinn either.  Although he might have been the richest man in Ireland, it’s doubtful if these oligarchs would have let him wear a cap and drive their limos.

So what’s the deal?  Well, the Russian Mob get 35 cents on the euro for everything they “recover”, but not only that.  They get to keep the first €25 million.

Remember now, this isn’t some abstract non-money arrangement like the contracts-for-difference that Sean Quinn and his brood were gambling with until it all went tits up and they had to pay the bookies.  No.  This is real hard cash, but more to the point, it’s our hard cash, thanks to the insane and juvenile decision by Lenihan and Cowen to nationalise Anglo.  In other words, a State-owned corporation, IBRC, has agreed to pay ransom money to the Russian Mafia so that we can get some of our funds back, after the Quinns gave control of them to an assortment of crooks, chancers and frauds.   Why was that done?  So that we, the taxpayers would not be recompensed for our bailout of the banking investors and the Quinn family could hold on to assets they did not own, paid for by you and me.  If Alfa “recover” €400 million, we’ll get €260 million of it, less the €25 million.  In other words, we’ll get €235 million, which is a little under 59 cents on the euro.  We lose 40% of our money one way or another thanks to the Quinns.

Got that?  Good.

Meanwhile, poor old Sean languishes in the training unit of Mountjoy for failing to comply with the instructions of an Irish court, as well he might.  If I gave the finger to the district court, I’d find myself in the slammer, never mind telling the High Court to get stuffed.  The question is simple: are we all obliged to obey the courts or are some of us exempt?  It looks like the Quinn family believe themselves to be above that sort of law, a bit like Leona Helmsley, who notoriously remarked that taxes are for the little people.  Maybe in Quinnworld, obeying the law is for the little people as well, but the rest of us are paying through the nose for that sort of hubris.

Not only are we paying higher taxes to cover the Anglo bailout, but also an insurance levy to cover the cost of the Quinn Direct mismanagement, and let’s not forget that €105 million or so we’ll be paying the Russian Mafia to unpick the Quinns’ shenanigans in the former Soviet Union.

Meanwhile, they’re protesting in Cavan.

Categories
Economy

Irish Foreign Aid

Don’t look this up.  If you didn’t already know the answer, I want you to guess.

How much do you think we pay every year in aid to other countries?

If you’re anything like the profile of typical Bock readers, you probably feel we ought to do our share, even in a difficult economic climate.   That’s certainly the way I feel: no matter how hard things are for us, they’re unimaginably tougher in some of the countries we support financially, and therefore it seems only reasonable to keep throwing  in a few million, despite the state of our finances.

Irish relief aid to Germany. 1945

Now, as it happened, I was listening to a radio debate about the Ugandan aid scandal that recently emerged.  Four million euros of aid from the Irish government was misappropriated by the prime minister of Uganda with the result that all Irish aid to that country had now been halted.  (The same country that recently spent over €600 million on jet fighters, though I should say that it’s to the credit of the Ugandan’s themselves that the theft was exposed).

Back to my question.  How much do you think we spend in overseas aid every year?  Ten million?  Twenty million?  Thirty?  Fifty?

I would have guessed maybe sixty or seventy, but during the discussion, one of the contributors mentioned that we’re currently giving six hundred million in foreign aid.  I did a little double-take.  That couldn’t be right.  More than half a billion?

Surely  he means sixty million, doesn’t he?

No.  He doesn’t.  As it turns out, we’re currently spending almost €640 million in overseas aid, down from a high of almost a full billion in 2008, the year of the bank bailout.

This is hard to think about.  €640 million is not a negligible sum even in prosperous times, but when vital services at home are being cut to save ten million here and twenty million there, maybe we need to think about where our priorities are.  Even though we’d very much like to help, can we really afford to pay over half a billion euros to others while according to recent reports, one in ten Irish people are living in food poverty?

That’s 450,000 people.

€640 million would provide over €1,400 a year for each one of those people, which is more than sufficient to ensure that none of them goes hungry.  It would also pay the household charge six times over.

I’m very conscious that this is the sort of talk that will either draw accusations of fascism from the lunatic left, or congratulations from the equally nutty right, so both of those types can expect to be told fairly smartly where to get off if they try to jump on the bandwagon.

At the same time, we need to look hard at the figures, but that’s why I must enter a caveat.   These are numbers I gleaned from various media reports, and they might well be inaccurate.  I’ll welcome corrections and references to authoritative sources in the interests of accuracy, but for now I’m going to use them for rough calculations.

€640 million is €142 per person in the country.  I think in Britain the figure is about €180 per person, including contributions to the colonies that made it wealthy.  Germany, meanwhile, is committed to paying almost €240 per person by 2015, but is currently paying only half of what it owes, meaning that the average contribution of a German citizen is less than that of the average Irish citizen.

Ponder on that.  Not only do we match Germany’s contributions head for head — we exceed them.

How can we afford to pay more per capita than Germany?

This is a serious question.  I don’t mean it to be flippant.  Since we’re broke, since we can’t afford to feed our own children and since every government penny comes from crushed taxpayers or the IMF, how can we afford to send enormous amounts of borrowed money abroad?  I’m not saying it’s wrong to do so.   I just want to see the figures behind it and hear the arguments in support.

Here’s one crude test.  If their military is better equipped than our military, should we still be funding them?