Ireland:Recording of Garret Fitzgerald and Karl Whelan Newstalk Debate

Former Taoiseach Garret Fitzgerald and Professor Karl Whelan of UCD discuss Dr Fitzgerald’s criticism of a letter signed by 46 Economists in The Irish Times about NAMA.

NAMA: Garret Fitzgerald admits lack of competence

In an Irish Times article on Saturday Garret Fitzgerald made the case for what he termed responsible opposition on the issue of NAMA. Again today on RTE Radio’s Morning Ireland he sang a similar tune.

Both FG and Labour have serious misgivings in relation to NAMA-and rightly so. As opposition parties it is their solemn duty to point out the glaring inadequacies. Failure to do so would be highly irresponsible. In the Irish Times article he stated that "I have hitherto avoided any comment on the relative merits of NAMA vis-à-vis other possible approaches because I have not felt competent to comment on the finer points of what is a highly technical issue".

Quite frankly this is an amazing admission. Yet this morning Garret strongly criticized the 46 economists who expressed serious misgivings about NAMA. He is referring to such learned academics as Prof Brian Lucey, School of Business, Trinity College Dublin, Prof Karl Whelan, Department of Economics, University College Dublin, Dr Constantin Gurdgiev, lecturer in finance, School of Business, Trinity College Dublin,Dr Moore McDowell, senior lecturer in economics, Department of Economics, UCD amongst others. With a few dismissive comments Fitzgerald rubbished them. Garret with his admitted lack of competence knows more than all of them put together. His arrogance was breathtaking. Garret appears to want a quick fix and to hell with the long-term consequences. Now is the time to point out the glaring weaknesses in the government proposals.

Amongst the questions posed by Brian Lucey are the following:

• What evidence does NAMA have that the current market price of property, land etc is not in fact the correct price to pay?


• What evidence does NAMA have that the current market price of these is not in fact going to decline for a number of years, as would be the case if Ireland were to follow the common experience of previous property crashes?


• Why would a temporary nationalisation of the banks be a bad thing, given that this would provide the taxpayer with a valuable asset which could be sold in future years?


• Why does no independent analyst support the governments view on NAMA? This includes the Swedish finance minister who ran their bad bank system, who said to the Irish Times that he “favours the more severe mark-to-market write-down of assets rather than a ‘through the cycle’ valuation.”, and that “it (NAMA) does not sound like the right solution to buy assets from private banks.” It also includes the IMF who said " Insolvent institutions (with insufficient cash flows) should be closed, merged, or temporarily placed in public ownership until private sector solutions can be developed ... there have been numerous instances (for example, Japan, Sweden and the United States),


• where a period of public ownership has been used to cleanse balance sheets and pave the way to sales back to the private sector", in the context of saying that the likely losses for Irish banks were such as to render them insolvent.


• Why not force the equity and bond holders in Irish banks to take the first place in the queue to absorb the losses that the banks would have to book were current market prices to be paid for the loans made. After all, that’s what risk capital is for?


• If the state overpays for the loans relative to current market prices, what, apart from a functioning banking system, does the taxpayer gain?


• What percentage of book value of the loans should NAMA pay, given that current market prices for land and development properties are somewhere around 30% or less of book value?


• If NAMA were to pay say €60b for loans that are worth only €30b, how can this transfer of a full years tax revenue to private speculators be justified in this economic time?


• If, as is entirely possible, the loans transferred to NAMA do not provide sufficient income to meet the coupon payments of the bonds issues by NAMA, will the taxpayer, at least in the short term, not have to meet these payments?
  

It is particularly noticeable that Fitzgerald has failed to address these questions. Instead he has played the man and not the ball.In addition he has failed to address FG or Labour criticisms in any meaningful way. The FG proposals stand up to scrutiny. They may not be perfect but certainly protect the taxpayer to the maximum possible extent.If as appears likely the FG proposals do not find favour in the Dail, NAMA will in all probability go through in some shape or form. It must be radically changed if this generation of taxpayers is not to be paupered. Brian Lenihan must take on board the criticisms of the 46 leading economists and those of FG and Labour.
As far as Garret Fitzgerald is concerned Ireland can marry NAMA in haste and repent at leisure.

Irish Times/TNS mrbi poll shows Lisbon Treaty heading for shock defeat

"The Lisbon Treaty is heading towards a shock defeat with the No side now in the lead, according to the findings of the latest Irish Times/TNS mrbi poll.

It will take an unprecedented swing in the last week of the campaign for the Treaty to be carried.
The poll shows the number of people intending to vote No has almost doubled to 35 per cent (up 17 points) since the last poll three weeks ago, while the number of the Yes side has declined to 30 per cent (down 5 points).
The number of undecided voters is still a significant 28 per (down 12 points) cent, while 7 per cent won’t vote.

The massive increase by the No vote since the last poll has mainly come through gains among undecided voters but, even more ominously for the Yes side, it has lost some support to the No camp.

While the final outcome is still in the hands of undecided voters, the clear momentum is now with the No campaign, and it will take a dramatic shift in public attitudes over the next few days for the Yes side to win.

The swing to the No camp has not been prompted by domestic considerations, with just 5 per cent of those opposed to the Treaty saying they are influenced by a desire to protest against the Government.
The reason most often cited by No voters is that they don’t know what they are voting for or they don’t understand the Treaty, with 30 per cent of No voters listing this as the main reason for their decision. ......................................." Read full story at Irish Times

Irish Times poll shows FF down 8% on 2007 General Election

According to the latest Irish Times/ TNS mrbi poll satisfaction with the Government, as a whole, has fallen by 2 points to 35 per cent. The poll was conducted last Monday and Tuesday among a representative sample of 1,000 voters in interviews at 100 sampling points in all constituencies.
The poll shows :
· Fianna Fáil on 34 %
· Fine Gael 31 %.
· Labour 12 %
· Sinn Fein 8 %
· PDs 3 %
· Greens 6 %
· Independents 6 %

The results of the 2007 General Election were as follows:

· Fianna Fáil 41.6%
· Fine Gael 27.3%
· Labour 10.1%
· Sinn Fein 6.9%
· PDs 2.7%
· Greens 4.7%
· Independents 6.6 %

FF is down almost 8% on the 2007 General Election whilst FG has gained almost 4% since the 07 Election.

Labour has gained 2%. Sinn Fein is up 1%. The Greens are up 1.3%. The PDs are becalmed on 3%.

This catastrophic drop in FF support stems from unfavourable publicity for Bertie Ahern at the Mahon Tribunal and the economic downturn which is gaining momentum. The rosy picture painted by FF during the General Election campaign has dissipated. The electorate is not amused. This is a repeat of the scenario which unfolded in the wake of the 2002 General Election. However this poll comes with a health warning. Some FF supporters may have hidden their true intentions and indicated support for other parties. At present it is not considered chic to indicate support for FF. Many of these supporters will return to the FF fold in a General Election situation.

The rise in support for FG is impressive. FG must continue to improve its organisation and develop a clear cut identity. The FG Bill - which gives crime victims rights in law for the first time - is most comprehensive and must not be opposed by the Government.

The Labour Party faces competition from Sinn Fein on its left flank. It must endeavour to siphon off support from FF in working class constituencies.

The PDs are becalmed. Their minuscule organization is crumbling. They are indistinguishable from FF. Noel Grealish TD is a cheer leader for FF whilst Mary Harney will retire at the next General Election.

The Green Party has reneged on most of its core principles. It has become FFs mudguard. In public opinion polls the party is a temporary abode for some unhappy FF supporters.

Similarly some FF supporters will indicate support for Sinn Fein in public opinion polls. In the secrecy of the ballot box they will vote FF.

Tonight on the TV3 Nightly News Vincent Brown programme there was a shallow superficial analysis of the poll. The spin from the panel was that FF performed strongly. This "shamnalysis" bodes ill for the future of the programme.

Journalist Eamonn Delaney spouted nonsense about FFs impressive performance. What planet is he on? A drop in FF support of 8% is impressive??? Is it too much to ask panelists to do a little homework ?