Video:RTEs David Davin Power analyses Brian Cowens speech at Fianna Fail Ard Fheis

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Ireland: Bombshell -Dell axes 1900 jobs in Limerick and plans new manufacturing plant at Lodz in Poland

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Computer multi-national Dell has announced that it is cutting 1,900 jobs at its plant in Limerick over the next 12 months.

Dell will move all production of computer systems for customers in Europe, the Middle East and Africa from Limerick to its Polish facility and third-party manufacturers over the next year...(RTE)

Currently Dell employs 3,000m workers at its Limerick plant. The loss of 1900 jobs is a shattering blow not alone to Limerick but to the entire Mid-West region. In addition thousands of jobs in spin off industries are likely to go. Dell says it will continue to employ approximately 1,000 staff in Limerick to coordinate supply chain, manufacturing and logistics for Europe, the Middle East and Africa.

The Taoiseach Brian Cowen has confirmed that a Government Task Force will now be formed to promote economic activity in the region.

Ireland:Government plans public sector pay cuts-5% reduction likely with further cuts to follow

2008 Exchequer figures released yesterday confirm a 12.7 billion euro deficit in the public finances after the tax take came in 8.1 billion euro less than what was predicted for the year. Last year's tax revenues fell to levels last seen in 2005. At the height of the construction and property boom in 2006, the Government took in €10bn on property-related taxes, almost a quarter of all tax revenues. The government allowed public expenditure to grow by 25% in 2006 and 2007. This rate of public expenditure growth was patently unsustainable. However it helped FF to return to power in the 2007 general election. FG Finance Spokesman Richard Bruton in 2006 and 2007 warned the government of the likely consequences of this policy. These dire consequences have come to pass. Unfortunately the property boom on which this public expenditure splurge was based could not be expected to continue forever.

The crash in Irish building and construction has decimated property taxes. Unemployment is heading for the 300,000 mark further straining government finances. The rise in the value of the euro is increasing pressure on Irish exporters whilst the international recession is further depressing the economy. In 2009 it is likely that Ireland will have a negative growth rate of around -4%. Ireland is now caught between its own internal economic problems and the international recession.

It is anticipated that the deficit could reach 21 billion euro in 2009 without further remedial action. A public sector pay cut is a certainty. 5% is regularly mentioned as a likely figure. It is more likely to be at least 10% in the longer term. Finance Minister Brian Lenihan and Taoiseach Brian Cowen intend to consult with the social partners. Decoded this means a public sector pay cut with the blessing of the unions.

Government Announces Recapitalisation of AIB, Bank of Ireland and Anglo Irish Bank (Cost €5.5 billion)

From the Department of Finance

......In relation to Anglo Irish Bank, the Minister for Finance announces an initial investment of €1.5 billion of core tier 1 capital to assist in restructuring the bank’s capital. The Government will continue to reinforce the position of Anglo Irish Bank and will make further capital available if required so that it remains a sound and viable institution. The investment will be in the form of €1.5 billion of perpetual preference shares with a fixed annual dividend of 10%. The preference shares carry 75% of the voting rights of Anglo Irish Bank. The investment is subject to the approval of the ordinary shareholders at a general meeting which will be convened as soon as possible. On the basis of positive contact with the European Commission, the Minister said he was confident that the Anglo proposal will meet with EU State Aid requirements when formally notified in due course.

Good progress continues to be made in the capital discussions with other institutions. In particular, subject to shareholder and regulatory approval, the Government has agreed with Bank of Ireland and Allied Irish Banks plc that they will each issue €2bn of perpetual preference shares to the State with a fixed annual dividend of 8%. These shares will have voting rights in respect of change of control and any changes in the capital structure. They will also confer 25% of the voting rights in respect of appointments of directors and 25% of the directors on the board, currently including any directors to be appointed in connection with the Government’s Guarantee Scheme.

All the institutions may redeem the preference shares within 5 years at the issue price or after 5 years at 125% of the issue price. The preference shares are non-convertible and will be treated as core tier 1 capital by the Financial Regulator and are replaceable only with other core/equity tier 1 capital.
The capital injection for Anglo Irish Bank is likely to take place following an Extraordinary General Meeting in mid-January, and for Allied Irish Bank and Bank of Ireland, by the end of the first quarter of 2009.

The Government has a substantial pool of additional capital available to underwrite and otherwise support the issuance of core tier 1 capital by the relevant institutions.The Government need not be the principal source of this additional capital and encourages each institution to access private sources of capital. Nonetheless, the Government is prepared to underwrite further issuance of core tier 1 capital and both Allied Irish Banks plc and Bank of Ireland have indicated an interest in such an underwriting in an amount of up to €1 billion each.
The measures announced today have been designed having regarded to the recent European Commission Recapitalisation Communication and are subject to State aid approval....

Ireland-Government Surrenders on Medical Cards for Over 70s(Grey Voters flex muscles)

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This TV3 video features a pensioners rally in Dublin to oppose the governments decision to remove automatic entitlement to medical cards for the over 70s. This video speaks for itself. Government representatives who attempted to address the meeting were prevented from speaking. Opposition leaders Enda Kenny and Eamon Gilmore were loudly applauded.The venue for the meeting had to be moved from a city hotel to nearby St Andrew's Church in Westland Row to accommodate the numbers.

The meeting unanimously passed a motion calling on the Government to reverse its decision to end universal entitlement for medical cards for all over 70s.


Last Tuesday the FF/Green/PD government withdrew automatic entitlement to a Medical Card for all over 70s . Means testing was to be introduced to determine entitlement. In the course of the budget speech some FG and Labour Party TDs already realised that the government had committed a huge political blunder. There was an immediate outcry from the elderly and from organizations representing them. The decision struck terror into large numbers of pensioners. I have never encountered such fury among pensioners. The FG and Labour parties launched a ferocious attack on the measures in the Dail. Within 24 hours of the announcement some TDs in the government parties and indeed some ministers such as Brian Lenihan began to wobble. In addition independent TDs such as Michael Lowry and Finian McGrath declared that they could not support the measures. FF TD Joe Behan resigned from the party.

The pressure continued to build. A vote on an FG private members motion in the Dail seeking the restoration of the entitlement to all over 70s was due on tomorrow night. There was no certainty that the government could vote down the motion. Today the government caved in and raised the threshold levels so as to ensure that only the top 5% of pensioners would be deprived of the card. The new income thresholds for qualification for a medical card for over-70s are €700pw for a single person, equivalent to €36,500pa, and €1,400pw for a couple, or €73,000pa.
Existing medical card holders will not have to undergo a means test. Instead, they will be asked to notify the Health Service Executive if they are over the income threshold. 20,000 people will lose their medical cards.
People who currently have a medical card and who are over the new income threshold will not keep their medical card after 1 January, under legislation to be brought forward.

However the fury has not abated as the principle of universality has been breached. Serious damage has been done to the authority of the government and to the leadership of Brian Cowen. This episode has seriously eroded the authority of Mary Harney as Minister for Health. The grey vote has flexed its muscles in no uncertain terms and will grow in importance as the population ages. Many pensioners were terrified by the proposed budget changes. In addition the budget proposals were viewed as the ultimate insult to a generation that made huge sacrifices in the 1980s when the marginal rate of income tax was 58%. Much of Ireland's prosperity today is due to its sacrifices. The tsunami of criticism has rocked the FF party to its foundations. In addition the Greens have been seriously damaged. A new political force has been energised. Expect to hear more from the over 70s who have emerged radicalised and more confident from the heat of battle.

Today the government backtracked on the application of a 1% levy to all income-part of last weeks budget- and announced that those on incomes below the minimum wage will be exempt from the proposed 1% levy. The threshold for the 2% levy will be lowered bringing in more middle-income taxpayers to compensate for the loss of revenue.

Two u-turns -on one day- are unheard of in Irish politics. Now huge opposition to changes in the pupil teacher ratio -in the nations schools- is building. In addition university students are up in arms over the increase in the registration fee from €900 to €1500. This government could be heading for the cliff of political destruction.

Ireland-Government rocked by groundswell of opposition to medical card proposals forced to backtrack

No sooner had Minister for Finance Brian Lenihan completed his budget speech than Government deputies from FF, Greens and PDs broke out in thunderous applause. However opposition deputies on the FG and Labour benches had already spotted serious flaws in some of the proposed health and education cutbacks.

The Government's decision to end universal medical card provision for people over 70 lit the fuse. The opposition in the Dail was apoplectic with rage. Enda Kenny and Eamon Gilmore spearheaded the attack. Yet Brian Cowen, Mary Harney and Mary Coughlan strongly defended the proposal. Government TDs were slow to react.

Grey voters vented their spleen with a display of ferocity seldom seen in Irish politics. Many elderly people have been stunned and frightened by the proposals. All organs of the media were utilized. Now many backbench FF, Green and Independent TDs supporting the government have begun to rebel. Independents such as Michael Lowry and Finian McGrath have come out strongly in opposition
Today Wicklow TD Joe Behan resigned from the Fianna Fáil party in protest at the Budget citing not alone cutbacks in health but also in education. Mr Behan has accused the Cabinet of being out of touch with the electorate.

Just one question for many of these backbench FF deputies. Why did they not shout stop when the FF/PD government allowed public expenditure to rocket by 25% in the two years leading up to the 2007 general election. The property boom bubble supported this growth in public expenditure. It was clearly unsustainable. Many of these deputies won their seats on the back of benign budgets. It is possible that the outgoing government would have been re-elected without such a massive growth in public expenditure.

Four years ago Richard Bruton FG Finance spokesman warned of the unsustainability of the public expenditure splurge and spoke continuously about the inevitable consequences.. Economists such as George Lee, Dr Alan Ahearne and David McWilliams warned about a property boom crash. They were accused of talking down the economy.

The present Medical Card proposals would not get through the Dail. Any effort to force them through would tear the FF Party asunder. The Independents and Greens would probably desert. Tonight on RTE Taoiseach Brian Cowen announced that he would set up a process to deal with the problem. The Government intends to try and renegotiate with the IMO with a view to securing savings.

It is likely that the proposals will be substantially amended or parked. However FF backbenchers, Green Party and Independent TDs had better get used to bad news. Indeed a supplementary budget cannot be ruled out in July 2009 (after the Local Elections) to arrest the slide in the public finances. In addition there may be at least two more harsh budgets one in December 2009 and the other in December 2010. The Government has scored a huge political own goal. Happy are those sitting on the opposition benches.

Mandelson's WTO cuts: Time to use the veto

Mandelson's WTO cuts would result in:

• €4 billion per annum loss to the Irish economy


• 50,000 farmers put out of business


• 50,000 job losses in food processing and agricultural services


• Beef prices of €2/Kg (70p/lb)


• 1 million suckler cows slaughtered


• Milk prices of 24c/litre


• Sheep industry decimated by imports from New Zealand and Australia


• Damaging losses in pigs poultry and grain


• WTO has wiped out the sugar beet industry


• (Source:IFA)

As these statistics indicate Mandelson's concessions at the WTO will destroy rural Ireland and seriously damage the Irish economy. It is time for the Irish Government to use the veto. The Government must not fudge the issue. Failure to block the Mandelson proposals will result in the destruction of Fianna Fail in rural Ireland. Brian Cowen promised to use the veto if necessary in the run up to the Lisbon Treaty referendum.
The arrogant Mandelson has continued to plough ahead oblivious to the needs of the Irish economy. Put manners on him. Use the nuclear option.

Is Nicolas Sarkozy listening to the Irish electorate?

Today Nicolas Sarkozy visited Ireland ostensibly to ascertain the reasons for the rejection of the Lisbon Treaty. In reality he was testing the waters in relation to a second referendum. It was a cosmetic exercise which was designed to varnish his push for a second vote with a lick of consultation. His comments to a party meeting last week - that Ireland would have to vote again- angered NO campaigners and a sizeable proportion of the Irish electorate. His utterances smacked of arrogance.

Apparently he now has a better understanding of the reasons for the NO vote.
NO campaigners such as Declan Ganley and Patricia McKenna took a very hard line with him.
Even YES supporters such as Enda Kenny and Eamon Gilmore outlined clearly that this imbroglio cannot be resolved quickly. Enda Kenny stated that a second referendum prior to the European Elections would not lead to a clear-cut result.
Apparently Brian Cowen explained the difficulties in rushing into a second referendum. He spoke about analysis and consultation. Mr Cowen also stressed our solidarity with other EU member states and emphasized the desire to secure a resolution to the impasse which would satisfy all 27 members.

So Sarkozy has been appraised of Irelands difficulties with the Lisbon Treaty. The question arises as to whether he will take these on board or not.

As a first step Peter Mandelson should be reined in. The Commissioner for External Trade is prepared to sell out EU farmers to secure a deal at the WTO negotiations. This arrogant individual is not amenable to reasoned argument from farmers. EU food security is to be jettisoned. Similarly he is prepared to accept that the EU will be flooded with cheap food, often lacking traceability. He is prepared to wipe out Irish agriculture. 50,000 farmers are likely to go out of business and another 50,000 will lose their jobs in spin off industry-if Mandelson succeeds. He behaves like a dictator. He personalises all that is wrong with the Commission. He resembles a Czar speaking down to his subjects.
If Mandelson persists with his current approach, a rebellion by the rural electorate will dwarf the previous rebellion in the referendum on the Lisbon Treaty. (Are you listening Mr Sarkozy?) Who controls Mandelson? To whom is he accountable?

The Commission is undemocratic and lacks accountability. It must be reformed. That is the wish of the overwhelming majority of EU voters. Today Sarkozy made the startling admission to Declan Ganley that if a second referendum were held in France, it would be defeated.

The threat to Irelands 12.5% Corporation Profits Tax is real. It comes from countries such as France and Germany. This is a major issue for employers and employees and has the potential to wipe out large segments of Irish industry. Sarkozy favours harmonisation of tax rates. That is the reality.

Many coastal communities face extinction as Irish fish stocks are plundered by trawlers from other EU countries.

Rural Post Offices are closing due mainly to the liberalisation of postal services by the EU Commission. Often the local postman is the only visitor to elderly isolated rural dwellers. Thanks to the EU Commission this is disappearing.


In addition abortion and neutrality are other major issues, which must be resolved to the satisfaction of the electorate.

Verbal commitments on all of the major issues are insufficient. Watertight guarantees are a sine qua non.

Somehow I suspect that Sarkozy is not listening. Waffle and charm mixed with the stick and carrot is not sufficient. It is highly unlikely that the impasse between Ireland and the EU will be resolved during the French Presidency. 90% of the Irish electorate is pro EU. Hopefully Mr Sarkozy will not turn us into a race of Eurosceptics with unhelpful comments. Show us the colour of your money Mr Sarkozy.

Ireland-Exchequer deficit is €5.65bn for first six months as recession looms.

The Exchequer returns show a deficit of almost €5.65bn for the first half of the year (2.75% of GDP). Tax Receipts at €19.127 billion are €1.45bn lower than anticipated for the first six months of the year. The lower tax receipts are due mainly to the poor performance of VAT and capital gains tax. The tax shortfall for the full year is expected to come in at €3bn. The collapse in the house-building sector has impacted strongly on tax receipts. Only 40,000-45,000 new houses will be built this year. The folly of over reliance on this sector is plain for all to see.

Total current receipts in the first half of 2008 were €19.525 billion compared to receipts of €21.124 billion for the same period in 2007.
Non-tax revenue in the first six months of 2008 was €398 million. This compares to €310 million for the same period last year.

Brian Cowen’s Government must administer some harsh medicine. The country faces swingeing public expenditure cuts and huge rises in stealth taxes as Finance Minister Brian Lenihan attempts to grapple with the problem. Increased exchequer borrowing will also help plug the gap. In addition interest rates will remain high as the European Central Bank grapples with inflation. Increasing interest rates at this time is economic lunacy and will serve to strengthen the Euro further. This will reduce exports from the Euro zone. Irish exports have begun to lag. Much of the Euro inflation has resulted from higher oil prices. So it is arguable that interest rates should not be increased.
Tightening of lending policies by the banks will hinder investment.

Pay rises below the rate of inflation will take further steam out of the economy. There is a danger of stagflation if public expenditure cuts are too severe.
In addition unemployment has risen rapidly in recent months. It broke the 200,000 barrier last month and currently stands at c207,000. Where is the purchasing power to come from if the consumer lacks sufficient disposable income?

In recent tears public expenditure has galloped out of control. It rose by 13% in 2007 in the run in to the General Election and by 50% over four years. Huge tax receipts from the then booming building sector funded much of this. The FF/PD Government erred in not restraining public expenditure. Excessive public expenditure fuelled inflation in an economy that was already growing strongly.
It threw petrol on the fires of economic growth. Restraints in public expenditure in good times would have provided the Government with some leeway.

There has been a tendency to dump on economists who warned that this scenario would unfold. David McWilliams, Alan Aherne and George Lee in particular have come in for strong criticism. Richard Bruton FG Spokesman on Finance has long criticised Government policy. Critics were accused of talking down the economy. Of course this is utter nonsense
Interestingly George Lee was referred to today on an RTE programme as George Gloom. Attack the messenger when you do not like the message. What utter nonsense. It is time for realism.
Some debate has cantered on the dreaded “R” word. The country is either in recession or about to enter a recession. It can weather the storm.

Sunday Business Post/RedC Poll (for June) : FF and FG down 2% on General Election of 2007

• FF 40% (No change)


• FG 25% (-3%)


• Labour 10% (No change)


• Sinn Fein 10% (+1%)


• Greens 7% (+2%)


• PDs 2% (No Change)


• Independents 6% (No change)

Changes since the last poll are in brackets.

Both FF and FG are down 2% on their General Election results. FF has lost a referendum so 40% is quite a good result for it. Successful spinning by the FF Party leader Brian Cowen where he alleged unfairly that FG had not worked hard enough in the campaign has partially insulated FF. In addition Cowen is still in a honeymoon period.

FG has taken a hammering in the media especially in the Irish Times. In addition on last Monday nights Questions and Answers programme FF supporter Noel Whelan launched an unfair verbal assault on FG MEP Maighread McGuinness in relation to the referendum on the Lisbon Treaty. This had an impact on public opinion. Also FF had two speakers on Questions and Answers.
In addition stupid comments from FG MEP Gay Mitchell on TV served to deflect blame onto FG and away from FF for the referendum defeat. Mitchell needs to think before he speaks. He ended up doing FF’s dirty work for it. Many FF front benchers kept a low profile on the referendum issue.
FG leader Enda Kenny has suffered from a prolonged media assault.

Sinn Fein has benefited from its role in the No campaign and is up 3% on the General Election.

The Greens are up 2% on their General Election result benefiting form support for the Lisbon Treaty and from Patricia McKenna’s opposition.

The PDs at 2% are down almost 1% on their General Election result.

Independents at 6% remain unchanged since last Sunday Business Post poll.

Answers to opinion polls appear increasingly influenced by spin. It will be interesting to analyse the impact of the developing recession on Party fortunes. Unemployment has risen over the 200,000 mark last month whilst a huge deficit is opening up in the exchequer finances. Will the resulting pain for the electorate swamp spin from the Government spin machine?
The poll also confirms that the No voters in the referendum were strongly influenced by the abortion and neutrality issues. Also fear of the loss of influence and threats to Irelands taxation regime were major reasons for the No vote.

The latest Sunday Business Post/Red C opinion poll shows major parties support on a par with 2007 General Election Result

• STATE OF THE PARTIES (Since the last poll)

• Fianna Fáil 40% (+2)
• Fine Gael 28% (-1)
• Labour 10% (no change)
• Greens 5% (-3)
• Sinn Féin 9% (+2)
• PDs 2% (no change)


• Inds 6% (no change)

This poll confirms that FF has recovered support since the accession of Brian Cowen as leader. It is now just 1.6% short of its 07 General Election result.
This is statistically insignificant and within the margin of error. Similarly FG at 28% is 0.7% above the 07-election result. This is again within the margin of error. Labour at 10% has the same level of support as that obtained in the 07 election. The Green Party is just 0.3% above its 07-election result

Essentially the four parties now hold the same level of support as at the 07 General Election.
Sinn Fein bucks the trend and is 2% above its 07 General Election result. This may be a temporary bounce fuelled by the oxygen of publicity afforded by the parties leading role in the referendum campaign.

The PDs at 2% are 0.7% below their vote in 07 General Election. The party is becalmed.
The Irish electorate is essentially conservative. Will the developing economic downturn alter this mentality?

Ireland- Taoiseach Brian Cowen losing out in Dail exchanges

There is increasing evidence in Dail exchanges that Brian Cowen is prepared to adopt a more aggressive approach to the opposition than Bertie Ahern. Former Socialist Party TD Joe Higgins said in 2003 that "asking the (former) Taoiseach Mr Ahern a question is like trying to play handball against a haystack. You hear a dull thud and the ball does not come back to you. It goes all over the world, but it certainly does not come back to the person asking the question". In marked contrast Cowen is more combative.

Prior to assuming the mantle of Taoiseach Cowen had been quite dismissive towards Kenny. In a Dail exchange in February Mr Cowen-then Tanaiste- attempted to belittle Kenny on the issue of Mr Ahern's finances and the Mahon Tribunal when he said "You are neither qualified nor able to evaluate that evidence”. This may yet come back to haunt him. The personalised nature of the comment has energised Kenny.

Political journalists assumed that Cowen as Taoiseach would destroy Kenny in exchanges. This is not what has transpired.
In the Dail yesterday (Tuesday) Enda Kenny raised the HSE announcement last week that it was contacting more than 4,500 patients whose x-rays and CT scans at Our Lady`s Hospital, Navan, and Our Lady of Lourdes Hospital, Drogheda, might have been misread. Cowen injudiciously attacked Kenny and alleged that he was attempting to make political capital out of the issue. He came off second best in the exchanges.

Today in the Dail a row erupted when Mr Kenny questioned the Taoiseach about health expenditure.
In reply Cowen claimed that Fine Gael had not backed a single initiative aimed at improving health services. This comment drew howls of disapproval from the FG front bench.
Mr Cowen told the Fine Gael spokesman on Health, Dr James Reilly, that if the heckling continued, he could ensure that Fine Gael leader Enda Kenny would not be heard in the chamber again.
This was a bad lapse in judgement.

Mr Cowen was then tackled by Labour leader Eamon Gilmore on price increases and on the alleged failure of the National Consumer Agency and other bodies to act.
The Dail microphones picked up a comment made by the Taoiseach to Tanaiste Mary Coughlan : 'We need to get a handle on this, will you ring those f***ers.'
The use of the F-word although not used in the Dail exchanges was a further embarrassment for the Taoiseach.
All in all a bad week for the Government and for Mr Cowen.

Speech by Fine Gael Agriculture Spokesman, Michael Creed TD, during Private Members' Motion on WTO

Irish farmers and the food processing industry face an appalling vista as Commissioner Peter Mandelson prepares to sacrifice their interests at the WTO talks. Today in Dublin, European Commission President Jose Barroso attempted to obscure the realities with the smugness and arrogance of a man out of touch with reality. Indeed he displayed no small degree of condescension as befits an unelected bureaucrat.Below Michael Creed outlines the stark realities. Make no mistake about it , Irish agriculture teethers on the brink of destruction. Mandelson must be stopped.

Fine Gael Private Member's Motion: WTO Negotiations
Speech by Deputy Michael Creed
Fine Gael Spokesperson on Agriculture, Fisheries and Food

"It is difficult to recall a moment in our economic history when so much stands to be lost from the failure of this Government, and indeed its predecessor to defend a vital National Interest. The failure of the Minister for Agriculture, the lead Department in this fiasco to even quantify the consequences of failure is troubling in itself. It is matched only by the "pass the parcel" approach in Government, with the new Taoiseach-designate - Brian Cowen refusing to engage on the matter until his appointment is confirmed. Mr Cowen leaves the Department of Finance in a precarious state, unemployment and inflation on the rise, competitiveness slipping and tax revenues slumped. A word of warning to any "wannabe" Minister for Finance - if the proposals for Agriculture on the World Trade Organisation Agenda by Mr Mandelson become a reality, then the picture will get a lot bleaker. Thousands of jobs at farm gate and in the agri-business sector will be lost and farm incomes will fall significantly. We are most definitely in the last chance saloon and the signs are not encouraging.

Before dealing with the specifics of the motion, there are a few general observations that need to be made to put the debate in context.

(1) Over the course of the last 20 years the E.U. has slipped significantly as a trading block in agricultural commodities. Our share of world imports of virtually all agricultural commodities is increasing far faster than our share of exports. Nowhere is this more evident than in the meat sector where the EU share of trade is down in volume terms from 12% to 9% whilst actual trade in meat doubled over the same period (in volume terms). The latter is no surprise when you consider Chinese consumption per capita grew from 20kg to 50kg between 1980 and 2008. The same is true for the dairy sector with EU share down from 31% to 17%.

What this clearly proves is that the EU and Commissioner Mandelson are systematically exposing its citizens to increased dependence on imports of dubious quality and preventing us from capturing emerging markets, especially in China & India which will be left to those who out manoeuvre and outsmart us in negotiations - the USA, Brazil, Argentina, New Zealand & Australia.

(2) This decline of the EU position has occurred at the same time as the EU cost base for primary producers increased significantly. Reforms of the CAP and other initiatives this period have seen consumer concerns move centre stage with food quality, animal welfare and environmental policy at the core of every farmer's daily life.

(3) It is worth pointing out at this stage that the 2003 CAP reforms were widely believed to be the EU's contribution to the World Trade Deal. The radical changes farmers had to make to meet the reform requirements were the quid pro quo for a WTO deal.

Reality of current offer on WTO table
The reality of the predicament we find ourselves in is that we have now been negotiated into a situation far beyond what was asked of the agricultural sector under CAP reform. Concession after concession has left our beef and dairy industries in peril, our consumers exposed to unacceptable levels of risk and cost hikes and the future viability of the family farm as we know it in jeopardy.

I have asked you Minister to lay the facts before the House, to openly admit to agriculture producers and consumers what kind of impact the current WTO proposals will have on the Irish economy. However, you are either unable or reluctant to divulge to the House any kind of substantial evidence of economic analysis undertaken by your Department to assess the situation.

What we have seen however, are figures, undisputed by you, from those working in the industry and those figures are stark;

- €4bn lost to the economy on an annual basis
- 50,000 job losses in manufacturing and services
- 50,000 farmers put out of business

This is not just an agricultural issue, beef and dairy industries together contribute an estimated €6bn to the economy in terms of goods and services. How is this revenue going to be replaced if the current WTO proposals make their way to the finish line?

Non-trade issues
Apart from the obvious economic carnage in the countryside and the job losses in the food processing & agri-business sector, there are a number of other non-trade issues which have not been taken into account in the current negotiations. Where we are at now in a nutshell is legalising large volumes of imported food from outside the EU that it would be illegal to produce on Irish or EU farms. We are also in one fell swoop undermining the bio-security of the agric-sector and exposing consumers to salmonella, antibiotic resistance, hormone fed meat, avian flu, FMD and a whole host of dangers as yet unknown.

Thanks but no thanks, Minister. Thanks but no thanks, Commissioner Mandelson. This is a time, when the interests of farmers and consumers are at one and a time when that alliance needs political expression which is totally lacking to date.

Non trade issues, including climate change, and food security, should be centre stage at the WTO negotiations. We have received warnings from the IMF, the World Bank and the Food and Agriculture Organisation of the UN in the last few days relating to food security. Food riots, export bans and national inquiries have been introduced to try and maintain local supplies of food but yet this week, Minister, was the first time I heard you speak about food security and its importance in the context of WTO negotiations.

It is your failure, Minister, and that of your Governments that has us where we are now and no amount of bonhomie with farmers can mask that fact. This happened on your watch and whilst you might be preparing for pastures new, many farmers and others are facing annihilation of their livelihoods. Shame on you.

Have you ever bothered to meet Commissioner Mandelson?

Have you thought about the huge challenge ahead to feed the world - a world that is growing by 80 million per annum?

Have you raised with the Commissioner the challenges and consequences of climate change - food miles, CO2 emissions, desertification, increasing consumption, water shortages, record low levels of global food inventories, famine, death?

All of these issues feed into the proper defence of Ireland's and the EU's Common Agricultural Policy from the WTO. Or maybe your understanding of Climate change in this context is taken from Minister Gormley's pronouncements about the twin evils of the "Cow" and the "Car". It certainly looks like this and Minister Gormley could yet have his way as these proposals will decimate the Suckler Cow herd and in one giant leap allow the Government to meet its now legal obligations to reduce the CO2 emissions from agriculture. Somebody on the Government side of the house needs to nail this issue immediately.

Mandelson's WTO Brief
Much has been made by the Minster of the fact that Mr Mandelson is exceeding the brief given to him by the Council of Agricultural Ministers in October of 2005. This raises three questions

1. The 2003 CAP reforms were said to be the EU contribution to a World Trade Deal. Why should EU and Irish farmers have to pay twice for a World Trade Deal?

2. We are now reaching a crisis point in negotiations - what exactly have you done Minister in the last two and a half years to prevent us getting to this point? What have you done to put non-trade issues on the negotiating table?

3. Have you as yet managed to unearth any economic analysis of the consequences of the 2005 brief or is that as hard to come by as figures for the impact of the current proposals?

The answer to the second question is obvious. Nothing has been done. For all your talk about groups of 5, 10, 15, 20, you and your colleagues in the Council of Ministers have not reined in Commissioner Mandelson. That's a political failure - and you can't hide from that!

The consequences for Ireland of 2005 have never been laid before the House by the Minister. I am appalled that the Minister has no homework done on these matters and equally appalled that the Minister finds some sort of high moral ground in the 2005 brief. The 2005 brief mandated Mandelson to offer 50%-60% tariff cuts on Beef, Pigmeat & Poultry tariff cuts of 35%-50%. Butter and SMP 50% tariff cut. That you could find comfort in this sell-out raises questions about your judgement and that you now do nothing when what's on the table is substantially worse than 2005 can lead to only one conclusion. It is blatantly obvious why you have failed to publish a sectoral analysis. You know the consequences and hope to run from the problem in a reshuffle. Shades of Micheal Martin and the nursing home scandal.

Last week when asked whether or not your Department has prepared estimates on the impact of the World Trade deal you replied - and I quote - "We do not have a final analysis completed". How convenient for you Minister. No front page headlines to highlight the extent of the potential damage. No Prime Time Investigates into the death of Irish Agriculture. No public humiliation on radio talk shows.

Fortunately those involved in the industry have taken it upon themselves to assess the effect of Commissioner Mandelson's generosity. Mandelson's proposals will devastate the agri-sector and have a disastrous knock-on effect on associated industries. It is predicted that a 70% tariff cut on beef imports will see prices plummet to €2 per kilo or 70p per pound.

Do you think Minister that Irish farmers can survive on such a price - with the high cost of production in this region? Do you expect businesses to run on a loss? Minister, the future of the Irish beef industry - the fourth largest exporter of beef on the globe, 100,000 jobs, worth €4bn to the Irish economy, and a way of life on family farms from Malin to Mizen - is what is at stake. From the vantage point of this side of the House there appears to be an indifference to the consequences on the Government side at best, or at worst a lack of political will to face the issues concerned. Rumour has it Minister that you are preparing to fly the coop for pastures new. You may run but you will never be allowed to hide if this deal is your legacy to Irish agriculture.

This Government it seems views rural Ireland as the Achilles heel in our economic development. The reality is an estimated 25% of jobs outside of the Pale still depend on agriculture. Will your cabinet colleague Minister Gormley be pleased when we are forced to turn off all the lights, park the tractors and take the trains to the capital? Your Government has ensured infrastructure and employment has been focused on the east coast, while neglecting the rest of the country and you now stand poised to deliver the final nail in the coffin of rural Ireland by consigning 50,000 farmers to the dole queues.

Final Negotiations
And so Minister we are nearing end game in this process. With the possibility of a WTO Ministerial meeting next month - the time for talking is almost past.

You repeatedly say Minister that you are not prepared to accept an 'unbalanced deal' for Irish agriculture, that you are not prepared to allow Irish agriculture to be sacrificed for the sake of a deal going through. This begs the question, what exactly are you prepared to accept? Are you prepared to accept the agreement in its current format? Because if this is the case, that is an unbalanced deal, that is a step too far, Irish agriculture will be sacrificed, and for what? What are we getting in return?

Here is a clear example of how this Government has taken its eye off the ball, focusing on other issues while a vital part of our economy and heritage is slipping away. Surely the Taoiseach, in his final lap of honour should be using his remaining clout at European level to make contact with as many leaders as possible in an effort to call a halt to this deal, which is like a runaway train fast careering in the wrong direction? It is time for you Minister and your Government to show your mettle, to push for unanimity as a prerequisite in order to reject this deal. You have often spoken of a Group of 20 Agriculture Ministers opposed to the deal - you need to now ensure these Ministers are united against these proposals.

One of the objectives of this Private Member's Motion is to compel you and your Government colleagues to do the right thing for Irish agricultural interests. I call on you - to put it on the record of this House - that you will veto this World Trade Deal as it stands. If you refuse to do this Minister I call on you to look the farmers here present in the gallery in the eye and explain to them why you and your Government refuse to stand by them.

Article 39 of the treaty of Rome outlines the aims of the European Union in terms of agriculture. It seeks to ensure a fair standard of living for the agricultural community, increase the individual earnings of persons engaged in agriculture, stabilise markets, and assure food supply and reasonable price. Now Minister - in a year where all EU eyes are upon us - you have a responsibility to protect the rights enshrined in the founding document of the European Community. You jeopardise the commitment to the European project, of those who have been its most ardent advocates, by not showing honest and courageous leadership on this key issue. By saying no to WTO, you can allow the EU to sleep easy in the knowledge that the Reform Treaty will be ratified. You are allowing the waters of the Treaty debate to be muddied by your indecision and evasiveness on this Trade Deal.

Today Minister is an exercise in Parliamentary accountability. You need to be brought out of the comfort zone of Cabinet Governance and lay before this House once and for all where you stand on this World trade deal.

This is essentially about undue risk;

- You are putting the livelihood of primary producers at risk - farmers across the country who have stepped up to the plate so often to meet EU requirements.

- You are putting the food processing industry at risk, which will crumble and collapse in the face of cheap imports.

- You are exposing consumers to the risk of potentially unsafe products from throughout the world

- And finally, you are jeopardising the safe passage of the Reform Treaty.

Minister, you have failed this House by not putting before it the nature and extent of your intentions on this World trade deal. You have a final opportunity to redeem yourself. Take it and accept the motion which I commend to the House. "

Fianna Fail And The Cult Of The Leader: The Deification Of Brian Cowen Has Begun

Since the foundation of FF in 1926 much of its success has been based on the cult of the leader.
On the election of the new leader the FF spin machine swings into action propagating truths, half-truths and myths if necessary to build up the profile of the new chief. It is a form of deification.
Hand and hand with this goes the demonization of political opponents.

Eamonn De Valera founded the party in 1926. Certainly he was successful in maintaining FFs grip on power. However he singularly failed to reach out to Northern Unionists. Through his constitution he effectively widened the divide between North and South. He took the anti treaty side in the civil war in 1922 but did nothing about unity on accession to power. He failed to tackle the scourge of emigration. He instigated an Economic War, which bankrupted many farmers. He did of course win back the Treaty ports and kept Ireland out of World War Two. He was no colossus.

As Taoiseach Sean Lemass was driven by a desire to promote economic development via the Programmes for Economic Expansion. He was fortunate that the FG Minister for Finance Gerald Sweetman had promoted TK Whitaker who masterminded the development of economic planning. Lemass attempted to reach out to the North. The Lemass O’Neill meetings were a step forward.

Jack Lynch helped alter FF policy on Northern Ireland. Nevertheless he led FF to a landslide victory in the 1977 General Election on the back of the infamous FF Manifesto which triggered the massive economic problems of the 1980s. Lynch was a failure on the economy.

Charlie Haughey doubled the National Debt between 1979 and 1981 and gave a 30% Public Sector pay rise in an effort to bribe the electorate. Under that Haughey Government interest rates hit 21%. This was as irresponsible as the FF Manifesto of 1977. These activities of Lynch and Haughey have been airbrushed from history. In opposition in the 1980s Haughey incited interest groups against the FG/Labour Governments. He fought the 1987 General Election on the slogan of "Health Cuts Hurt The Sick And The Poor". On accession to Government he butchered the health service. Between 1987 and 1989, 200,000 people emigrated. This served to reduce pressure on the Government finances. Gradually the economy recovered. Haughey sought to improve relations with Margaret Thatcher and made some worthwhile moves on the North. Quite frankly he deserves little credit for improvements in the economy. After all Haughey and FF created many of the economic problems.

Albert Reynolds made worthwhile moves on the North and successfully secured 8 billion punts in Euro transfers. Then the FF/Labour Government collapsed.

Bertie Ahern deserves credit for the Good Friday Agreement and social partnership.
He benefited from the 12.5% Corporation Tax rate proposed by the Rainbow Government. This boosted economic development. He was partially responsible for economic success. This was further boosted by low Euro interest rates.

Already the FF propaganda machine with its supporters in the media has been in overdrive talking up new leader Brian Cowen whilst attempting to undermine FG leader Enda Kenny. It glides over the problems in Government Finances major difficulties in the housing market, rising unemployment-up 30,000 in the last three months and 5% inflation.

Yes indeed the cult of the leader is alive and well in FF and in sympathetic media organs such as the Sunday Independent.
The deification of Brian Cowen has begun

New Red C/Sunday Business Post Poll shows bounce for FF but comes with health warning

A new Sunday Business Post/Red C poll carried out last Thursday shows a 5% rise in support for FF when compared with the previous weeks Red C poll. However it comes with a large health warning.

On Bertie Ahern's resignation the media provided uniformly positive coverage for Brian Cowen. There was coverage of Brian Cowen the family man, Brian Cowen the singer, Brian Cowen the sportsman, Brian Cowen the political heavy weight. Opposition parties were deprived of the oxygen of publicity.
In addition only 500 people were sampled so there is a larger margin of error than for the previous weeks poll. Assuming the total sample is 500, and made up of equal numbers of men and women, the margin of error for each gender could be as high as 6%.

It is likely that Cowen and FF will have a honeymoon period. However it may not last long. Economic storm clouds are gathering. The Live Register has risen by 30,000 since December 2007. New house completions will drop to c45,000 in 2008. The country is heading for an Exchequer Deficit of €6 billion.

• The State of the Parties is as follows:

• FF 40% (+5%)


• FG 28% (-2%)


• Labour 11%(No Change)


• Greens 9% (+1%)


• Sinn Fein 6% (-3%)


• PD 1% (No Change)


• Others 5% (-2%)

Irish Economy-Storm clouds gather

The CSO says an extra 12,000 people signed on the Live Register in March.
This follows an increase of 8,500 in February. Since December alone the number of claimants has gone up by 30,000

The Exchequer figures reveal that after just three months, tax revenue is €600 million behind Budget day projections and €727 million down on the same time last year. The fact that nearly all taxes are significantly behind predictions (Capital Gains Tax and VAT at €311 million and €253 million respectively) suggests the downturn in the house building sector has now spread across the economy. Fine Gael Enterprise, Trade & Employment Spokesman Leo Varadkar TD has said, "In contrast to previous months, when new arrivals on the dole queue were mostly men, the 12,000 increase in March was split evenly between men and women. This confirms that the housing downturn has now spread from the male-dominated housing sector to the wider economy, discrediting Mr Cowen's assertion that what we are witnessing is simply a 'housing sector adjustment'.

House completions in 2006 were 93,419. Completions for 2007 were 78,027. Brian Cowen estimates house completions for 2008 at 55,000. However it is more likely to be closer to 45,000. Failure to tackle the Stamp Duty issue promptly damaged confidence. Also a 2% rise in interest rates helped to burst the bubble.

With inflation stubbornly high at 5%, high interest rates, rising fuel costs and falling house prices, 2008 is shaping up to be a very difficult year for the economy. According to Fine Gael the cost of Government-regulated services has risen by 45% since 2002 and accounts for one half of all non-mortgage inflation.

The Government has sought to blame external factors. This is only partially true. The Government itself opened the purse strings in 2006 and 2007 and allowed an unsustainable escalation in public expenditure. In 2007 it rose by 13%. This poured petrol on the flames and over inflated economic growth leading to a feel good factor, which enabled the Government to win the 2007 General Election. Now the Government must endeavour to reign in public expenditure at a time when the economy could benefit from a stimulus.
Gradually growth projections for the year have been revised downwards. The country could face an Exchequer deficit of over €6 billion for 2008.

Cowen to be next leader of FF and Taoiseach

With a procession of Ministers and backbenchers proclaiming support for Brian Cowen from early morning, his accession to the top was assured. Only Noel Dempsey had reserved his position. However he has now decided to support Cowen. Ministers such as Micheal Martin, Dermot Ahern and Mary Hannifin have parked their ambitions.
Aged 48 Brian Cowen could conceivably survive as FF leader for ten years or more.
If such a scenario unfolds Ministers such as Micheal Martin will have missed the boat.

Cowen has served in a wide variety of ministries and as such has plenty of experience. He is conservative in outlook. His tenure in the various ministries was not marked by many radical initiatives. He referred to the Health Ministry as Angola and was glad to leave the Department.
Fortunately for him he is departing from the Department of Finance at a time when there has been a serious deterioration in the public finances. The Department of Finance will be a poisoned chalice for the foreseeable future.


Cowen is talented and does not suffer fools gladly. However his command of the finance brief was not quite as comprehensive, as is assumed by his admirers.
He generally adopts a more bellicose approach than Bertie Ahern. He once showed his contempt for the PDs by stating, “When in doubt leave them out”
Enda Kenny and Eamon Gilmore must reshape their strategies if they hope to dent Cowen's prospects in the next General Election. They cannot allow Cowen to browbeat them in Dail exchanges. Cowen will adopt a contemptuous and strident tone in an effort to deflect criticism. Kenny and Gilmore must think quickly on their feet to score direct hits. Opportunities abound for the opposition parties. High inflation,rising unemployment, a ramshackle health service, a serious property crisis and myriad other problems will provide suitable targets for direct hits. Any opposition leader worthy of the name should dent Cowen's confidence.

Ireland-Who will be the next leader of FF?

Today in the Dail Enda Kenny and Eamon Gilmore attacked Bertie Ahern’s evidence to the Mahon Tribunal. Brian Cowen’s defence was interesting to say the least. He concentrated his fire mainly on FG and Enda Kenny. He gave qualified support to Bertie Ahern. He stated that Mr. Ahern had the support of the Dail and the FF party. He also emphasized that Mr Ahern would continue to lead while he holds that confidence. Cowen’s defence left few hostages to fortune.

Ever since Bertie Ahern announced that he intended to stand down as leader, aspiring candidates for the leadership have begun to prepare the ground for the impending contest. Bertie Ahern’s decision to anoint Cowen as his successor has not deterred Micheal Martin, Dermot Ahern and Noel Dempsey. It has fueled some thinly disguised resentment among likely leadership candidates.

The assumption amongst most media commentators and cognoscenti is that Cowen is home and dry. Nevertheless there is many a slip twixt cup and lip.
Cowen was a strong supporter of Albert Reynolds and belonged to the country and western wing of the party. Superficially he has huge support within the party. Nevertheless much of this support is soft and could desert Cowen. Micheal Martin had links with the Haughey wing. To a certain extent the Haughey and country and western wings still exist within FF. Martin will have huge support from Munster TDs and Senators and from many in the Haughey/Ahern wing. He cannot be ruled out.

In addition Dermot Ahern is able and could be a dark horse.

A vigorous leadership contest has the potential to reopen old animosities. If such a scenario were to unfold Brian Lenihan could emerge as a compromise leader.

Ireland -Exchequer deficit for 2006

The exchequer deficit for 2006 was just over €1.6 billion . This was more than three times Government projections. Stamp duty receipts for 2006 were €700+ million below Government expectations, while VAT receipts were almost €400m below the level anticipated by Brian Cowen. In addition public expenditure rose by 13% in 2006. The Government was determined to win the 2006 General Election and the massive rise in public expenditure contributed to a feel good factor. This provided a harvest of votes for FF at the ballot box. The rise in public expenditure was unsustainable.

The Celtic Tiger is no more. It has floated on a sea of excessive government spending and private borrowing. It has grown flabby. The government must take the scalpel to public expenditure. The withdrawal symptoms will be severe. The growth rate for the economy will drop to around 2%. Unemployment may rise quite sharply due to the down turn in building and construction. The electorate will now pay for the good times. This is the same scenario as unfolded in 2002 in the immediate aftermath of the general election.

The rise in the value of the euro against the dollar has insulated the economy somewhat against rising international oil prices and served to depress inflation. Nevertheless the governments record on inflation is poor. Inflation currently stands at 5%. Recently on RTE Tom McGurk stated that Brian Cowen left FG flat on the floor in debates on the economy in the run up to the 2006 General Election. Not for the first time McGurk's analysis was fatally flawed.
The next massive rise in government expenditure is anticipated to occur in the run in to the next general election-expected in 2011. After all the electorate has short memories.

Ireland -FF turns €4bn surplus into €2bn deficit in 3 years

FF has turned €4bn surplus into €2bn deficit in 3 years. To plug the gap Brian Cowen has resorted to borrowing and stealth taxes in budget 2007.

RTE has painted a very positive picture in relation to the budget. Its analysis is myopic. This budget is laced with booby traps.


It has marked similarities with the post election budget of 2002. Stealth taxes are back with a vengeance. The increase in Motor Tax represents a direct stealth tax of €82 million hitting every household and every family. This is painted as a green tax. It is nothing of the sort. It is a sly raid on the pockets of motorists who are regarded as soft touches. There is an increase in stamp duty on cheques. Tonight we had the announcement of a whole range of increases in health charges. Contrary to what the Minister states there is no full indexation of tax credits and bands in line with wage inflation. Consequently more taxpayers will pay tax at the higher rate.

As petrol prices have risen this year the Government has benefited strongly from the increased inflow of VAT and Excise Duties. It is well to remember that motorists have not benefited from EU membership.

Just look at the following examples. There is a price difference of c€3,000 between a Fiat Grande Punto in Ireland where the pre-tax price is €10,707 and Hungary (€7,756) and over €3,400 difference on the price of a Renault Megane (€10,683 and €14,103). An Audi A8 sold in Ireland last year for €65,000 pre-tax and in Britain for €56,450. Those who purchase a cheaper car outside Ireland will find the price difference disappears when they import it into the country, with punitive rates of Vehicle Registration Tax (VRT) of up to 30%.
This is contribution enough to the environment by the Irish motorist. Green Ministers and Brian Cowen please take note.


Alterations in today’s budget further discriminate against wives who to choose to remain at home to rear their children. This inequity is so great that it threatens the family unit.

Business rates, water rates, waste charges will increase as Local Authorities are starved of an adequate government subvention.
Experts on RTE when analyzing the alleged benefits do not factor in stealth taxes and increased charges.

Health Expenditure is projected to increase by 8%. This is down from c13% for 2007. The health service is facing huge unrest in 2008.

Of course there are some good measures in the budget. The Government has finally u-turned on the Stamp Duty. Richard Bruton has been vindicated on this issue. This change of heart by the FF/PD/Green coalition has been six months too late to avert a housing crash. Social welfare measures are in many cases reasonable.

The budget fails to tackle the child care issue. Most of the promises in the Programme for Government have been binned. Stealth Taxes and increased charges will bite in 2008. The budget is skilfully constructed to conceal the booby traps.