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You are > Home > Nama, Noonan and some ‘Up Mayo’ politics
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Wednesday, July 14, 2010
Nama, Noonan and some ‘Up Mayo’ politics
By John Cooney
BEWARE of a strange sinister creature this summer holiday, if you have decided to spend your coveted vacation on an inclement Irish beach instead of a Greek, Spanish, Portuguese or French oasis of sun.
If home-stranded, your hard-earned chill-out could be in grave danger of being molested by a pre-historic monster. It’s name is Nama. It’s distinguishing feature is that it won’t wash its face. It is toxic.
So warns Michael ‘The Archangel’ Noonan, the newly installed Fine Gael frontbench spokesman on finance, in his first incisive contribution to the dissection of the ghoulish Nama’s €11.5bn loan to the toxic rogue Anglo-Irish Bank.
“Anglo Irish Bank is swallowing taxpayers’ money like some prehistoric monster,” Noonan warned in a statement issued on Sunday. “AIB and Bank of Ireland are still not providing the credit lines needed by businesses and householders.”
The main thrust of Noonan’s intervention was that it is now virtually impossible for Nama to be profitable. He has come to this dire conclusion on the grounds that the Nama business plan revealed that only 25 per cent of loans transferred to it are performing, rather than the 40 per cent of loans estimated to perform in its original business plan.
According to Noonan, this means that only one quarter of all property-backed loans in the Nama-covered institutions, in excess of €5 billion, are performing.
There is no longer 40 per cent liquidity in Nama’s portfolio. The economic valuation of the transferred loans was significantly too high. So Nama has already taken a huge hit. Clearly, Nama is not the good deal which the Government presented to tax-payers when it claimed that over time it would realise a profit of €4.6 billion.
Nama’s bad assets amount now to 75 per cent of the total portfolio, rather than the 60 per cent it envisaged. A disastrous banking policy.
Almost two out of three members of the public now believe that Irish banks deliberately “lied” to Nama by claiming that 40 per cent of their toxic loans to some of the country's best-known property developers were being repaid, according to a nationwide Sunday Independent/ Quantum Research poll.
Indeed, on Friday, as Dáil deputies galloped away holiday-bound to their constituencies, the sheepish Department of Finance admitted in a parliamentary written statement that €11.5bn taxpayers’ funded loan to bail out Anglo Irish Bank was secured by the bank on highly risky property loans. With €22bn being assigned for the proposed nationalised bank, if the €11.5bn loan remains unpaid it would bring the total tab to the tax-payer up to €33.5bn.
In its first disclosure of how the bail-out money for AngloIrish was supposedly secured, the Department of Finance mandarins revealed that the European Central Bank (ECB) rejected that form of collateral and consequently Ireland’s Central Bank was forced last year to step in to revive Anglo.
Gallingly, these disturbing details were divulged coincidentally with the news that Sean Fitzpatrick, the former Anglo chairman, was declared bankrupt in the High Court this Monday. The various interest-only loans lavished on him by Anglo have contributed to his €110m in personal debt.
Meanwhile, readers of the Irish Mail were regaled of “Life under Nama” for developer of the Dundrum Shopping Centre in Dublin, Joe O’Reilly, who was pictured on the front-page sunning himself in a luxury golf-hotel at the exclusive Quinta do Lago in the Portuguese Algarve. O’Reilly, a staunch Fianna Fáiler, was among ‘the Golden Circle’ who propped up Anglo-Irish’s share price in 2008 that alone is costing the taxpayer €300 million.
The same newspaper also carried a report of how Frank Dunlop, the former Fianna Fail Government press secretary who was convicted for corruption as a lobbyist acting on behalf of developers, walked free from Arbour Hill prison on Saturday morning after serving only a year of an 18-month sentence.
And to add to the Sunday morning mirth there was a photograph of Dublin Senator Ivor Callely heading off on a junket to Norway. In a story about how he was permitted to postpone a hearing into his expenses claim from his residence in Cork, Ivor was gallantly representing Ireland at a conference in Oslo in the five-star Radisson Blu Plaza Hotel.
That the bell made be tolling for this crude culture of cronyism between bankers and politicians is indicated in a polemical but statistically well researched article article in the Irish Times by Dr Lorcan Sirr and Conor Skehan, lecturers in the college of engineering and the built environment at Dublin Institute of Technology.
Titled “The future is urban, where ‘Up Mayo’ politics won’t do” (courtesy of Cllr Joe Mellett during Enda Kennys’s recent successful counter-putsch), the article argues that TDs should beware that a constant trend of change in Ireland’s demographic pattern has major – and growing – implications for political parties whose heartland is in rural Ireland.
This process has been taking place since 1966 when the urban and rural populations of Ireland were exactly equal for the first time. Today almost 60 per cent of Ireland’s population live in urban areas across the State. Around Dublin the urbanised area increased by about 150 per cent from 1990 to 800sq km in 2006. Residential urban areas increased 41 per cent in the same period.
Urban economist Brian Hughes, a member of the Government’s own expert group on population projections, has shown that by 2070, more than half of Ireland’s population will be living in the Greater Dublin Area. Forget the National Spatial Strategy which is flawed in coping with the implications of the growth of Greater Dubland.
The authors contend that the clientelist politicial culture of the two rural-spawned main parties, Fianna Fáil and Fine Gael , face electoral erosion in a more urbanised national political culture. “The ‘Up Mayo’ political ethos doesn’t wash as well in urban areas,” they write provocatively.
There is much to digest in this article and it will provide food for thought at next month’s Humbert School debates in the Harlequin Hotel in Castlebar. At the risk of being accused of special self-pleading, the article has me in high ruminating mode.
Simply put, summer schools endow counties in which they are based with the prestige of “cultural tourism”. They cater for “holidays of the mind” which through media coverage of their proceedings put counties on the intellectual map. As hoteliers, guest house owners, restaurants and shops know, even egg-heads spend money attending summer schools.
Nor is it a coincidence that the four main Irish summer schools are ‘Beyond the Pale’: Yeats in Sligo; Patrick MacGill in Glenties, Co Donegal; the Merriman in Co Clare; and of course, neither last nor least, the Humbert in Mayo. All four bring the anvil of public debate to the parish hall.
Yet, sad to say, in the 24 years of the Humbert School’s existence, I have found it hard to break down a barrier of “Them and Us” in which too many local people living in the North-West do not attend the Humbert School on the speciously superficial grounds that it is only a talking shop for high-brows.
For several contingent reasons, the Humbert School came close to collapse this summer. Its future viability depends on its receiving local support in August.
Mayo needs to wake-up to being further culturally impoverished if Humbert vanishes from the summer school map in Nama-shrouded Ireland.
So, ‘Up Mayo’!
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