April 6, 2017
The market today is sustained by shortages and vulture funds and wealthy relatives able to put up the €60000 their sons and daughters require to put up front to get onto the property ladder.
Compare to the 50’s in Ireland where housing estates around are major cities were built in poorer times. Those on an average industrial wage could afford a house.
Today the market is controlled by broken banks sabotaging the efforts of those trying to reduce prices through large building programmes.
If house prices come down, banks could crash as their unsustainable lending into the commercial, residential and buy to let market goes into negative equity.
Nevin Institute for Economic Research recently came to the sobering conclusion:
“Lack of access to affordable quality homes constitutes a significant crisis for workers, families and communities in the Republic of Ireland. Current Government plans appear to be insufficient to make a significant impact. Pressure and strain on individuals and families is a direct consequence of under-investment over many years as well as a failure on the part of a market-led and property developer-led model of housing to deliver enough houses to meet the demands of a growing population. We propose a carefully planned programme to construct 70,000 new homes in addition to the existing stock of normally occupied housing in the Republic of Ireland. A key part of this plan is the putting in place of a European Cost Rental Model (ECRM) on lines already outlined by the National Economic and Social Council (NESC) and referred to in a recent report of the Oireachtas Committee on Housing and Homelessness. The optimum solution, we propose, is the establishment of The Housing Company of Ireland which will draw on long-term borrowing combined with an equity injection from the Ireland Strategic Investment Fund and undertake or commission, on a commercial basis, a programme of planning, building, acquiring and renting of new homes. This investment will supplement and further strengthen that of the Local Authorities as well as the voluntary housing associations in the area of social housing. The figure, below, summarises some of the key features of the ECRM.”
Have you seen the cranes going up recently in Dublin and Cork to build residential housing estates/apartment blocks…neither have I. Government inaction hopes to persuade private developers to get involved in delivering thousands of homes. This won’t happen as the banks to protect themselves will not loan into this market for 2 reasons, a) already mentioned above it will undermine current valuations of its lending stock b) people can’t afford the pricing. No matter how much the European investment bank get involved promising billions to Irish developers,the above 2 facts will not change. Unfortunately this makes Simon Coveney’s plans a ball of smoking nonsense.
But remember the housing estates built around Dublin in the ’50s…..
The Water Framework Directive from Europe appears could be the political undoing of FF/FG coalition. The 20-member Joint Committee on the Future Funding of Domestic Water Services met today and will meet again next week to agree its final recommendations for the future funding of domestic water services.
The Water Framework Directive from Europe is a thinly disguised frame-up of the Irish people. Reckoned in excess of €8bn the cost of upgrading the Irish water infrastructure Europe has reckoned cannot be born by excessive exchequer borrowing and spending.
Unable to tax and spend through devaluation of our currency we are reined in by constrictive European Central Bank policies causing homelessness and the various crises we put up with.
The Irish Water super quango semi-state body received a subvention of €439 million in 2014 and is expected to receive €399 million and €479 million in 2015 and 2016 respectively. it’s not under the watchdog remit of the Dáil Public Accounts Committee.
IW leaks money everywhere duplicating work that could easily have continued under the aegis of local County Councils coordinated under the work of a single national committee.
Propaganda is hosed on the Irish public brainwashed to believe water charges, water meters, will curb excessive use.
95% of the excessive use is poor infrastructure with public water mains leaking into the ground, nothing to do with consumers. Are the older generation some challenged with the need to use more than the average amount of water consumption, to be levied with huge bills? Is it not simpler to ban hoses in gardens for cars and pavement washing?
This is but another reason for us to Irexit out of Europe about which there is growing support in the media, academic life, and politically.
However little consideration so far has been given to the notion of Irexit. But Brexit is forcing Irish politics to come to grips with the implications of this move for Ireland socially, politically and economically.
We don#t seem to realise Ireland is a parked car on a railway crossing with trains coming at us from both directions!
“Deputy Martin is quite right that while the challenges ahead are unknown, at least if we knew at this stage what Britain’s ask will be, we could focus on that. It seems as if the Prime Minister has made it clear that the UK does not seek any kind of Norwegian system or a Swiss system, but a bespoke British requirement. In the update she gave to the other leaders at the European Council meeting, she said she would like to see the exit process be professional and well-managed and said that would be of benefit to both Europe and to Britain. Obviously, there will be discussions and negotiation about that. I will arrange for a briefing for Deputies Martin and Adams and anybody else by the senior officials here, who will give the Deputies the details of what they have been discussing with permanent secretaries across the water. They cannot get into too much detail because the Government has not made its decision. As the weeks go on, arising from the civic dialogue and the North-South Ministerial Council, we will have a wealth of information on which we can begin to focus. However, really and truly, until the Prime Minister moves and triggers Article 50, we will not be in a position to say what the definitive position is of the British Government. President Juncker, President Tusk and everybody else have made it clear that there will not be any formal negotiation until that happens. Michel Barnier will be around to everybody in the meantime. The Minister of State, Deputy Dara Murphy, has been meeting all his counterparts. The Minister for Foreign Affairs and Trade, Deputy Flanagan, has the same requirement as all Ministers at a European level to make direct contact so that people understand in the first instance from a European perspective the importance of the peace process, the connections between Ireland and Britain and so on. I will see that Deputies Martin and Adams are briefed at the..”
Its hoped that the gradual implications of Brexit for Ireland, the threat against the €5bn agri exports, the threats against SME’s in Ireland selling into the UK perhaps considering moving there permanently to escape tariffs, the threat posed by the hard border, will gradually focus Irish minds onto an opportunity for national unity.
If Ireland were to leave Europe a new deal could unify northern and southern Ireland outside the EU. Through partnership with the UK a new commonwealth of nations Scotland, Ireland, Wales, England could defend Ireland’s interests more effectively than Ireland’s membership of the EU can do for the southern republic.
But Today propaganda from Europe assures us that we are part of a team of 27 nations in the EU and we are assured that Ireland’s interests in negotiations will be supported. Who believes that nonsense?
Where was everyone on the team when Noonan went looking for support to carry the European banks’ potential losses of €40bn.
We were asked to take one for the team.
Our obedient, compliant and subservient negotiators will also be asked to take one for the team on UK’s Brexit. To test my proposition, ask Europe who will pay (money) for setting up the Irish border controls required to police the EU?
An Garda Siochana
“Under the terms of reference, which set out what the Commission can look into, Supreme Court Justice Peter Charleton will investigate two specific allegations, and exactly what former Commissioner Martin Callinan and Noirín O’Sullivan knew about them:
- Firstly, the protected disclosure made by Superintendent David Taylor on 30 September 2016 in which he alleged he was instructed or directed by Callinan and/or Nóirín O’Sullivan (who was Deputy Commissioner at the time) to maliciously brief the media about Sergeant Maurice McCabe and encourage them to write negative stories about him
- Secondly, Superintendent Taylor’s allegation that he was directed to draw journalists’ attention to an allegation of criminal misconduct made against McCabe.
The Commission will investigate any contact that took place between members of the gardaí and the media about these allegations.
The Commission will examine all mobile phone records from David Taylor, Martin Callinan and Noirín O’Sullivan between 1 July 2012 and 31 May 2014 to look for any records relating to the allegations. It will also examine all electronic and paper files relating to Maurice McCabe held by An Garda Síochána.
The inquiry will also examine whether Noirín O’Sullivan leaked a specific negative story about Maurice McCabe to RTE. The terms of reference state that the Commission will:
…investigate whether Commissioner O’Sullivan using briefing material prepared in Garda Headquarters, planned and orchestrated broadcasts on RTE on 9 May 2016, purporting to be a leaked account of the unpublished O’Higgins Commission Report, in which Sergeant McCabe was branded a liar and irresponsible.
Finally, the Commission will look at whether a meeting took place between Martin Callinan when he was Garda Commissioner and TD John Mc Guinness in the carpark of Bewley’s Hotel in Newlands Cross in Dublin on 24 January 2014, and if so why that meeting took place and what was discussed at it.
Tánaiste and Minister for Justice Frances Fitzgerald said this afternoon that the government will move to implement O’Neill’s recommendations in full.”
I listened recently to some Garda speaking out on RTE on nepotism in the Gardai. Many of these excellent Garda spoke of political appointments and nepotism, the practice of giving jobs to relatives and friends, within the ranks. It’s not what you know but who you know. Experience, training, further qualifications at postgraduate level, expertise unrewarded because you knew the local political apparatchik does not favour you.
Often the corrupt will weed out excellence as its seen as challenging incompetence.
Noirín O’Sullivan, herself a political appointment has done little to compensate whistleblowers for their bad treatment by management, which continues to this day.
February 27, 2017
Previously Ireland took one for the team in Ireland’s bailout the extortionate nature of which almost made the IMF pull out of the deal. We shouldered 40% of the exposure losses of European banks in Germany and France. Perhaps the IMF couldn’t believe we would go along with the deal but if we were dumb enough to ask for it, why should they object? Ireland’s leaders parroted the role set out for them by Jean-Claude Trichet and the ECB.
Spain and Portugal and later Greece forced a renegotiation of their bailouts and in spite of our lack of negotiating power, we had to be given a similar deal.
The Irish promissory notes over €30bn our so-called government could have legally mounted a court challenge against refusing the payment of this gift to the ECB, instead the money was laundered into legally binding terms set in international law against a minor backdrop of shallow concessions government here touted as success.
Government once again parroted the role set out for it by the ECB and European Commission.
Support for the financial sector in Ireland includes support for vulture funds looting our property sector with Minister Noonan’s approval in spite of a pathetic and failed attempt to close loop holes. http://www.thejournal.ie/vulture-funds-loophole-3009381-Oct2016/
Are you beginning to get the picture of gross incompetence?
How about Ireland suing the EU for its ruling that Apple owes Ireland €13bn?
Do you want white elephants?
Currently the HSE supported by government plans building the most expensive hospital ever built in the world costing in excess of €1bn.
Tánaiste Frances Fitzgerald “Ms Fitzgerald emphasised the trebling of construction inflation from 3 per cent to 9 per cent as a main factor in the rise and said a new education research centre was being developed and the provision of IT for the hospital had to be taken into account.”
Wow, provision of IT not taken into account in the original estimate?
Location of the hospital is stuffed into a high density traffic area hazardous in regard to spiralling building costs. It includes the demolition of buildings still in use.
Another cheaper alternative exists cost €600ml.
“ESTIMATE OF COST (2016) of the NPH if built at Connolly
Construction cost = €400M
Hospital 118,000 metres square @ €3000 per metre = €354M
Family accommodation 4,000 metres square @ €2,000 per metre = €8M
Research Department 3,000 metres @ €2,500 per metre= €7.5M
Two satellite units – 10,000 square metres @ €3,000 per metre = €30M
ADD Vat, Fees, fit-out and equipment @ app. 50% of construction Cost = €200M
TOTAL = €600 M”
Whether in housing, health education or elsewhere such as infrastructure for Irish Water, Ministers busy themselves in peripatetic visitations around various interest groups across the country promising the views of lobbyists are being urgently taken into consideration.
Like a random bureaucrat picking up the phone and answering yes to every question in Franz Kafka’s “The Castle” meeting journalists becomes an opportunity to list your schedule. It’s a busy much ado about nothing that hides the bigger picture burying one’s head in the sand.
Nothing gets done, no hospitals are built to relieve the trolley A&E crisis or long waiting lists that extend into years.
No local authority housing estates are built because of vague public private partnership incentive schemes that become a patchwork of nonsensical bureaucratic folly.
Larger issues controlling the bigger picture are at work undermining the work of ministers who are no more than trolls for the banks and the financial sector undermining democracy even more.
Consider this, property has become too expensive to build and has gone beyond the reach of even the middle class.
But property prices maintained at high levels ensure the banks their previous lending into the sector will find a return for property developers who otherwise may lead the banks to go bust.
The irony is that providing development funding for large schemes of affordable housing could lead to falling prices in the property sector threatening developers and mortgage holders and banks already in the market.
They are threatened with non return of their loans if property prices fall.
Unfortunately, journalism in Ireland is often a parrot for the status quo and those in power. Cheer leading absurd nonsense and ridiculing intelligent questioning is often crowned by arrogance and hubris that beggars belief. More examples here:
Enda Kenny has always been a cheer leader for remaining in the EU and has been exploited effectively from the European perspective facilitating the ECB demand that Ireland take one for the team.
But his position now can be likened to the man sold the dead parrot in Monty Python. Some might consider him to be the dead parrot of Irish politics with the saga of his leaving the leadership of Fine Gael an unending distraction to real politics.
Some real issues loom. Brexit will have profoundly negative impact for Ireland in terms of its trade with the UK ( see earlier blogs ). Ireland’s banks are still at risk exposed to large bad loan losses:
Corporation Tax windfalls in the financial sector will not last forever as UK and US and EU restructure their own financial sectors to compete against Ireland.
We are in the middle of a housing crisis and an A&E and health crisis. Education is under funded and the target of further austerity cuts. These will be severely impacted in a negative way by Brexit.
Kenny’s response to the crisis is to propose an All Ireland provision in Brexit negotiations to facilitate Northern Ireland to rejoin the EU in some future All Ireland context if Northern Ireland wishes to rejoin the EU.
The hubris and arrogance of the notion beggars belief against the context of The Democratic Unionist Party being in favour of Brexit.
Why would the DUP wish to give away whatever sovereignty it already has to an Irish government-run by the EU whose own sovereignty is questionable?
They do not want our homeless, our hospital waiting lists, the destruction of trade between UK and Ireland and our falling standards in education.
An All Ireland Brexit with a new economic union between Ireland, Scotland, England and Wales outside the EU is a more balanced solution to Ireland’s problems. But our media ignore the issues involved in Brexit preferring the distraction of when is he going to leave?
We should be talking about a new trade agreement with the UK!
“CETA is a new trade agreement between the EU and Canada.
It’ll make it easier to export goods and services, benefiting people and businesses in both the EU and Canada.
The European Parliament voted in favour of CETA on 15 February 2017.
The EU national parliaments must approve CETA before it can take full effect.”
CETA has been touted as a possible template for a new trade agreement between The UK and the EU.
Kenny should instead leave the building of Ireland’s future to those who can deliver a future for Ireland outside the EU. Don Quixote tilting at windmills is not enough with foolish United Ireland part of the EU nonsense.
Ireland needs a future not embedded in the debt shackles and austerity driven quagmire of the EU that is ruining Ireland for future generations.
Vote for IRexit and a United Ireland outside the EU negotiated under a new CETA type agreement that will consolidate Ireland’s relationships with its closest neighbours, not break them.
The Irish Water controversy rumbles on. 90% of water leakage is not the responsibility of consumers but rather leaks under the watch of local authorities piped into districts along large mains. Propaganda from Fine Gael would like to blame consumers for this and have them foot the bill.
The bill for improving our water infrastructure should come out of general taxation. Large savings tackling loss of water would come through improving infrastructure lessening the overall expense of improvements.
Technology exists without water metering each house to locate and identify large leaks by simply metering large areas and making mathematically based statistical deductions that would give accurate probability measures whether extensive, unexplained consumption and leakage exists.
It should be easy to identify suspect areas and replace infrastructure that is beyond its sell by date. It should be possible with a small number of meters to install these in high suspect areas to get detailed profiles right down to single houses. They can be taken away and reused elsewhere when necessary.
Armed with this information it should be possible to fix such leaks primed with incentive grants to householders unwitting victims of leaks on their premises.
We’ll leave aside the possibility of European subsidisation of any schemes enabling the above.
Suffice it to say parroting the Attorney Generals advice based on his interpretation of dictats from the European Commission with Orwellian Big Brother, anti democratic demands, is a political failure mirroring Simon Coveney’s failure to deal with our homeless and housing crisis…..
The Fine Gael demonisation in this debate of the word ‘populism’ to denigrate the democratic will of Irish people is one that takes us closer to fascism where the will of the Irish people is set aside in favour of those who govern from the shadows.
For them democracy is the enemy. Unless we want more of the same we should seriously consider IRexit as an alternative to mindless, blind obedience fed by absurd notions such as the quango of Irish Water.
Irish Water saga is led by politicians for whom the above political failures have sadly become a way of life.
February 12, 2017
An Taoiseach Enda Kenny has met with Polish Prime Minister, Beata Szydlo. He got no support from Beata Szydlo in his quest for Ireland to be given special status in coming Brexit negotiations.
In his belief that Ireland must be imaginative re its response to Brexit, it might have been useful to visit Poland’s border with the Ukraine. Delays of up to 4 hours for border control for those travelling by train between both countries.
Depending on the purpose of visit, the vehicle you are travelling in, papers carried, security checks, crossing the border might take an hour or so; or you might need to join the lengthy kilometers long grid lock of vehicles that appears not to move at all and is worse than Calais.
Construction and manning of these border control check points perhaps Kenny might have an imaginative word …”former head of the European Commission’s customs procedures has told MPs. Michael Lux told the Northern Ireland Affairs Committee that customs controls on the Border will be unavoidable if the United Kingdom leaves the EU customs union after Brexit”(1)
Crossing the Polish border into Ukraine you have to pass through the Polish border then the Ukraine border. Smuggling of goods particularly cigarettes are big issues. Perhaps Poland’s refusal to accept refugees is also an issue.
If Kenny is soft on the border between Northern Ireland and Southern Ireland could Ireland become a mecca for refugees fleeing Calais. Border patrols on our coastline would have to be stepped up to combat people smuggling and a growing refugee crisis in Southern Ireland may require special European funding arrangements.
People smugglers may resort to parachuting in their delivery of human cargo by night.
By day boats ill-suited to Mediterranean waters may navigate dangerous waters hoping to reach Southern Ireland before crossing over to Northern Ireland.
It would appear inevitable that a wall will need to be built.
The cost of this wall could be astronomical. Much resentment would be felt by many pointing to our…. housing and homelessness crisis.
Walls have a habit of keeping people in as well as keeping people out. At current rates and if further devaluations occur brought about to make the UK economy even more competitive, the thousands travelling north on an hourly basis to stock up on lower price goods, could be delayed at the border, then further delayed on way back to process import duties and other checks….
2. Currently about one out of every 4 litres of milk consumed in the south comes from Northern Ireland amounting to over 600 million litres per year.
That’s a lot of trucks requiring paperwork sensitive to any delay or waiting game.
“IFA chief economist Rowena Dwyer broke down Ireland’s relationship with the UK in numbers at the IFA’s briefing on Brexit recently. 50% of Ireland’s total beef exports goes to the UK, followed by one-third of our total dairy exports. With the UK leaving the EU, a drop in Irish exports of between €150m to €800m can be expected.”(3)
With the collateral damage of border controls I believe the figures above are vastly understated. But it’s not only border controls at Norther Ireland its border controls at points of embarkation/demarcation between Ireland and the UK in general border crossing points both at land and sea.
Currently within the Irish media or at a political level in spite of the abjuration of Enda Kenny there is no imaginative or otherwise setting down of the precise implications of Brexit. A small group led by Kenny himself is handling Brexit.
We’ve had a cabinet setting up of an all-Ireland dialogue on Brexit but nothing concrete has emerged. Its imagined that Kenny is visiting fellow EU leaders to drum up support for Ireland’s special position in regard to Brexit.
But perhaps no one apart from Kenny knows what Ireland’s special position on Brexit amounts to? Is Kenny asking that a standing army of customs officials, construction companies, be provided by the EMU to police Ireland’s new borders with the UK, for free?
On the face of there are no plans other than to bury the head in the sand and hope for the best. Kenny is about to bow out of politics so the fall out wont effect him much, but it will affect the rest of us.
So let’s answer Kenny’s call for us to be imaginative. Let’s demand answers that put down on the table what exactly will happen with Brexit and what the fallout will be for each Mary and Joe citizen living on this island.
The only way to effectively do this is to call a referendum on IRexit to give each citizen in the Republic a vote on whether to stay in the EU or leave. There are profound implications which should force the facts to the surface and allow each citizen to make their choice.
One imaginative solution if Irexit was chosen would be to consider the Cyrpus situation. Turkish occupation of northern Cyprus has been an issue since 1974. In recent years the following proposed solution is emerging:
“The UN plan for settlement (Annan Plan)
Under the final proposals, the Republic of Cyprus would become the United Cyprus Republic. It would be a loose federation composed of two component states. The northern Turkish Cypriot constituent state would encompass about 28.5% of the island, the southern Greek Cypriot constituent state would be made up of the remaining 71.5%. Each part would have had its own parliament. There would also be a bicameral parliament on the federal level. In the Chamber of Deputies, the Turkish Cypriots would have 25% of the seats. (While no accurate figures are currently available, the split between the two communities at independence in 1960 was approximately 80:20 in favour of the Greek Cypriots.) The Senate would consist of equal parts of members of each ethnic group. Executive power would be vested in a presidential council. The chairmanship of this council would rotate between the communities. Each community would also have the right to veto all legislation”
The US, the UN, UK and IR have all had deep involvement in finding solution for the conflict in Northern Ireland.
One solution would be for this island instead of building walls to adopt a solution along similar lines to the Annan Plan above. Ireland would form itself into a loose confederacy of states with Scotland, Wales and England operating under a similar umbrella of trade, legal, constitutional and social. Instead of this island being the Irish Republic, it would change to The United Ireland Republic.
Surely the above road is better than a road that promises imminent collapse of our banks, destruction of our social services, ruination of our agri industry, all to make this a smugglers paradise or Pirate Island for foolish politicians…..
There needs to be a criminal investigation led by an external police authority outside this country to pursue those who engineered and executed the dirty tricks campaign mounted against whistle blowers including Garda McCable that has lasted for many years corrosively in An Garda Siochana covered up with inaction from the Department of Justice and now spread to other state organisations.
The handling of the above by this Fine Gael led governent rivals the incoherent way it has approached and currently prepares for Brexit. There is no reason to assume the incoherent opposition led by FF will in any way improve on matters.
January 23, 2017
Listening to Ireland’s pitch for financial services located in London to locate in Dublin following Brexit must be like listening to the German government during World War 1 or WW11 pitching to non participants in the conflict to set up embassies located somewhere near the Maginot or Siegfried lines of national defence just as the shells begin to fall. (1)
Eoghan Murphy minister for state (for Brexit) asked on Morning Ireland 23.01.17 if he was asked during his pitches at various forums around the world trips at taxpayers expense if property prices in Ireland would pose a problem, stated that the subject was not raised once. I humbly suggest the reason for this was that no one in their right mind was contemplating relocating to Dublin.(1a)
Falling land prices make the price of an average dwelling in the Dublin suburb is similar to the price of a 50 acre farm outside Dublin.
This is before Brexit will wipe out 50% of exports to UK of agri-production with UK opportunities to outsource their requirements at lower prices perhaps in new trade deals with Brazil/New Zealand et al.
With English the universal language of commerce, science and financial services the value of Ireland being English-speaking is moot.
On mainland Europe, Germany’s financial district would be an obvious choice to replace London – and has the added global reach that Dublin lacks, UBS said.
Already home to the European Central Bank, the Bundesbank and several global financial services firms such as Deutsche Bank and Commerzbank, the EU’s biggest economy is well primed to pick up where London might leave off, despite having stricter labour laws than the UK.
The city is already preparing for an influx of 10,000 or so bankers over the next five years – and those from London can look forward to cheaper living costs and shorter commutes.
Frankfurt also boasts the third-largest airport in the EU, with excellent transport connections across the world, and has an office vacancy rate twice that of Dublin at around 12pc, with half a million square metres of work space available in the city centre. ”
Both Amsterdam and Paris are contenders having short hops to London and Frankfurt and good infrastructure.
Dublin in the austerity grip of disappearing public services, greater political upheaval potential as the divide between rich and poor increases, looming turmoil especially in the agriculture sector due to repossessions as yields fall because of Brexit, is not an attractive venue following the triggering of Brexit under article 50.
“Yet the taoiseach and his secretary general Martin Fraser have kept firm control of Brexit policy, and appointed John Callinan, another civil servant with Brussels experience, as second secretary in Government Buildings. They set up a Brexit cabinet subcommittee under the chairmanship of Kenny and including several senior ministers. A Brexit working group is chaired by Fraser and includes top officials from the departments of foreign affairs, finance and public expenditure, as well as the IDA, Enterprise Ireland, the attorney general’s office and other agencies” (Sunday Times, 22.01.17 P8)
In one way it makes sense to have the Taoiseach lead negotiations over Brexit as when the Irish economy begins to splutter and shut down and the smugglers’ Black economy between north and south grows, held together by the illicit sale of smuggled cigarettes and cheap agricultural produce defying new border controls, Kenny can be slipped into retirement.
But it looks like the above group is a waste of time, effort and money. Better use could be made of the group sourcing new markets for Irish exports, negotiating directly with a committee from the UK parliament on common needs.
In the wake of the financial collapse of the economic project of the EU that has led to Brexit, the collapse of peripheral economies across Europe, banking collapse dangers in Italy, a collapse that will be further consolidated by emigration policies and further austerity with imminent closure of Irish corporation tax loopholes, we should ignore An Taoiseach’s efforts over Brexit tilting at windmills as apparently he is also ignored across Europe.
If unfortunately we choose to stay as appears to be the case perhaps the above group can produce a report of the effects of Brexit for Ireland, how Europe will compensate Ireland for such losses. Such pertinent questions will not be mooted by Ireland’s swans as they swim in the vast and resplendent halls of Val Halla, in Brussels…at taxpayers expense.
If we had even the semblence of a true democracy in Ireland given the implications of Brexit for Ireland, results should be put before the people in a referendum for Irexit.
Europe has failed having fallen victim to the abuse of global financial services that may lead to global collapse of the financial services industry…but that is a topic for another day.
Visiting London not so long ago, I was surprised by the vast number of cranes across the centre of London, the vast numbers of tourists, the UK economy filled with positive energy was far from collapse.
December 15, 2016
“…These were the proposed 4% yearly cap yearly rental raises, more tax incentives to be introduced for landlords, and designating more areas as ’rent pressure zones’ where the caps will apply.”
I realise, dear reader, the above may seem absurd in the following context:
There has been a massive rise in rental costs of accommodation leading to the current housing crisis including homelessness. In addition to the massive costs of house prices, young people wishing to start a family in recent years have been burdened with excessive rental accommodation costs further eroding their ability to save for a mortgage.
Flying in the face of arguments from government favouring an approach to incentivising a massive nationwide building programme from the private sector led by developers and private investors the above measures appear feeble in the extreme. The only argument between FF and FG would appear to rest on the question of extending these feeble measure further across the country.
Few will be able to afford the absurd purchase costs of new builds without the cost of new builds dramatically coming down.
The above measures ironically amount to protecting the interests of landlords at the expense of tenants.
Measures such as passing legislation even interim 5yr emergency legislation requiring owners of all vacant houses to offer their properties for rent with government incentives to do this, NOT on the table.
Large scale emergency apartment builds on government land in urban areas, NOT on the table.
Scaled taxation weighted against area based rental cost calculating excessive loading by landlords exploiting tenants, NOT on the table.
A European system eg Germany with local property development committees determining and fixing the cost of building, the quality of building, the cost of leasing and renting, NOT on the table.
In the past few years since 2014 profits for the private rental sector have risen to between 2 and 3 billion euros per annum.
Profits have mostly been pocketed by the banks.
They propose the sector continue to eat cake albeit with a little less jam confined to 4% increases way in excess of rises in the cost of living index. The profits include profit after maintenance and capital appreciation costs are taken into account.
But is there any sense to the Coveney/Cowen Rental Strategy Circus?
Consider the following:
For a new investor who uses a mortgage to buy a rental property
the larger share of rental income will be absorbed by debt repayments.
An example is presented in Table 3 of an investor in North Dublin City using a 70 percent mortgage (the maximum permitted by the new Central Bank guidelines) to buy a two bed rental property; the mortgage term is 25 years. This yields a modest after tax profit before capital repayments. When capital repayments are included the annual cash flow is negative; i.e., the
initial rental income would not cover all of the mortgage repayments. This may still be a worthwhile long term investment since the investor is accumulating equity over time and rental income can be expected to increase. The larger part of the mortgage repayments is
covered by rental income while there is also the prospect of some capital appreciation. After 25 years, the mortgage would be repaid. If asset prices were to rise by an average of 3 per cent annually, at that stage the investor would have an asset with a nominal value of almost €450,000.
Interest rates have a significant influence on the returns achieved by an investor using a mortgage. The average interest rate for first time buyers in Ireland is higher than the average interest rate on new mortgages in the euro area. If BTL interest rates were two percentage points lower
, then the cash flow on new investments would be positive. On the other hand, lower interest rates would also increase house prices and thus reduce rental yields.”
The key point to grasp in the above, dear reader, is the cost of the mortgage and crucially the cost of property.
In a fragile recovery with our banks still teetering on the brink, many of its customers with huge loans invested in Buy To Let properties, getting return on those investments is critical for banks to expect to have their loans repaid.
A dysfunctional property market occurs in a situation where banks themselves depend on a property price bubble to give then a return on their investment into lending into the property sector. Allowing the banks and private sector to set the agenda in this scenario is akin to placing the fox in charge of the chickens.
Instead of bursting the housing bubble it is in the short term interest of the banking sector to create this bubble.
Not only is our property market broken but our economy itself is being sucked dry of economic activity that would otherwise inject volatility into local business interests.
Not only is our economy sucked dry of jobs in the construction sector but the distribution of wealth into the economy as a consequence is instead appropriated by landlords deep in debt to our banks.
Keeping that bubble going instead of taking some of the steps outlined earlier appears to be the business of Messers Coveney and Cowen representatives of a dysfunctional politics with no longer the public good at its heart.
Instead they blindly oblige their so-called independent advisors controlled by banks and the profiteering private sector who lead them by the nose into an absurd Circus dealing with rental strategy nothing less than an embarrassment.
Cowen and Coveney in the present politically dysfunctional environment of New Politics would not even qualify in the middle of Winter to be put in charge of a vegetable shop situated in a field of turnips charged with the management of a shortage of turnips.
Nothing short of a public housing programme led by local authorities and capitalised by government is required.
But that might lower house prices and lower rental income and the banks might not get their money back!
In the face of a list of such growing absurdities a 32 county Ireland IRExit in an economic union with Scotland, Wales, UK and possibly Norway does appear to be more attractive.
But Mr Noonan wont even enter into bilateral talks with the UK over Brexit. He leaves this to his puppet masters in Brussels who will dictate the terms of Brexit, end Ireland’s corporation tax independence, impose inter trade tariffs and conditions between Ireland and its largest trading partner, restrict movement on Irish people travelling to the UK!
While Enda Kenny and his compliant and obedient sailors navigate Ireland’s economy over the waterfall.
Legislation to provide for 4% rental increase so poorly drafted members of the opposition pointed out it provided for 8% increase. Its being redacted and redrafted today 16.11.16.
Would it be possible to have an audit of all Dail deputies with a role in the above legislation to assess how much they may be compromised by the fact that they are landlords many holding substantial holdings of property in Ireland? I don’t think so.
They’ve just given themselves their Xmas bonus and are ready to head home on holidays again after making sure their cake has cream on it and at least 4% of jam.
November 27, 2016
During the week we heard rejoicing on the airwaves http://www.thejournal.ie/central-bank-mortgage-rules-2-3095784-Nov2016/
“It was announced this afternoon that a first-time buyer will now only need a deposit worth 10% of a property, regardless of its price. However, the 20% deposit rule will continue to apply to second-time and subsequent buyers.
The 3.5 times ceiling on the loan to income (LTI) ratio remains. Requirements for buy to let borrowers and the exemptions for negative equity mortgage borrowers from the measures also remain unchanged.”
Rejoicing continued with claims that the above rule would stimulate the construction sector to build more new builds thus rapidly dealing with the homelessness crisis.
Nothing could be further from the truth. The truth is housing has become unaffordable for the average industrial wage and is quickly getting beyond the reach of young people in high paying jobs.
Provision for a large municipal building programme that will end the crisis has been avoided at all costs.
Instead media is filled with images of smiling Enda proclaiming a dynamic, progressive and wealthy economy with a solution to the housing crisis brought about by Simon Coveney. No solution and Kenny will disappear from the stage some say the sooner the better.
Teachers went on strike to protect young workers in their profession forced to take a large cut in their wages in spite of rising rents and property costs. Hospitals are at their wit’s end with numbers on hospital trolleys about to reach all time records if winter flu hits see statistics here http://health.gov.ie/statistics/ Our rivers are polluted with drinking water requiring massive investment http://www.epa.ie/water/wm/rivers/results/
There is massive propaganda in the media with attempts to manage public sector pay increases expected by the unions in the wake of Ireland seeing its return to prosperity. Most do not see this. Widespread efforts to smother increases in public sector pay follow along the lines of warnings that our continued prosperity is on a knife-edge and such demands could lead our economy to collapse again.
The implied accusation is that public sector pay increases led to our economic collapse in the first place not wanton speculation in the property market promoted by the 1% of speculators and banks abetted by government who stoked the property market to line their pockets at the expense of workers.
The ridiculous black is white mantra that increasing house prices would encourage builders to build more houses will soon be seen to be the deception it is. Developers and bankers will not build and lend into projects priced beyond what the market can afford to pay.
It’s possible our politicians are so deceived they themselves are the greatest victims of their own delusions. There is no fungible relationship between Simon Coveney’s basket of intents and policies to bring about the construction of the numbers of houses and the real world.
The real world is very simple though to have any insight into its true nature will bring a response that such views are facile, fatuous, facetious and fail to grasp the complexity and scale of the problems of the real world. Bernie Madoff used such arguments to scoff at his critics before he was sent to prison.
Construction of public housing needs to be done on a vast scale on a Municipal basis. The price of housing needs to be severely brought lower not higher vis-a-vis Simon Coveney’s policies.
This is not happening because a small dictatorial elite of FG/FF headed by the smiling wannabe dictator Enda Kenny continue to fan the flames of prosperity for the 1% against the 99%.
They do not want house prices to fall.
Present relaxation of rules will fan property crises in the attempt to continue the bubble they fear will pop because not enough young first time buyers can afford to raise the finance for Madoff property pyramid schemes.
They want rich investors in Irish property many of whom are TD’s with large rental property portfolio investments or vulture funds pricing out Irish buyers continue to make large profits from artificially induced shortages.
For them the agenda is to manipulate the media and public opinion to the view what is best for the banks and the 1% is best for all.
October 21, 2016
Notwithstanding supply shortages some developers are unable to sell properties at the current high unaffordable prices.
Coveney mistakenly confuses the inability to raise a deposit with inability to afford to pay back a mortgage.
Alarmed at the possibility of more people on foot of Coveney’s proposals taking on mortgages they simply cannot afford to pay back, the Central Bank has forced a government climb-down restricting the amount that can be borrowed to 70% instead of 80%.
(1)“The Central Bank has said that they think the threshold whereby the loan-to-value of the property should come down from 80 per cent to 70 per cent, which would ensure that nobody is overborrowing to try to avail of the grant and I think [Minister for Finance] Michael Noonan thinks that’s a sensible alteration.
“It essentially means that more people will be able to avail of it. It’s relatively minor change but it’s a change I think that’s worth doing and so he’s happy to accommodate that.”
Actually, Simon, this is not a relatively minor change, instead this makes your proposals ludicrous. It makes any savings possible under your scheme will be eaten up by the higher cost of raising the difference between what the bank will lend and what ever savings the borrower has to make up that difference.
If there is a strong uptake, house prices will rise absorbing even further any gains made to help the buyer. Ironically, the proposal has about as much value in increasing house supply and new house construction, as a ball of smoke.
It’s another case of Nero fiddling while Rome burns. Fiddle while Rome burns definition. “To do something trivial and irresponsible in the midst of an emergency; legend has it that while a fire destroyed the city of Rome, the emperor Nero played his violin, thus revealing his total lack of concern for his people and his empire.”
What Coveney should be doing is demanding from Europe a derogation from its fiscal space rules to raise capital on the open market or to invest from our pension fund in a large-scale construction project to build Olympic Village type apartment blocks in the larger cities to deal with this growing crisis. That and a whole range of building projects to build “affordable” housing for the whole generation of young Irish people shut out of the housing market.
Not to be outdone Richard Bruton is advertising for parents to be paid to undertake supervisory duties to help break the teacher’s strike. The irony is teachers were not being paid to do those duties since they were forced to do same under Croke Park hours. Inflammatory and incendiary as this move is pouring petrol on Rome burning, a greater irony is that teachers are striking not for better pay and conditions for themselves, but on behalf of the ruthless and unfair way new entrants to their profession have been penalised forced to accept rates of pay on a par way below that of their peers. Another example of how young people are being shafted by future leadership contenders within Fine Gael.
I’ve no doubt whatsoever targeting of teachers is a fallout from European austerity hawks from the troika down to impose gauging cuts on our public service bill to reduce the standards of health care and public education to that of public health and education expenditure in the US where it is lowest in the world.
This despite abundant riches being further amassed by the 1%.
(2) Meanwhile Europe is targeting Ireland’s corporate tax regime in its current proposals:
At present companies, or groups of companies, must deal with potentially 28 different corporate tax regimes across Europe.
The Commission will recommend that, instead, member states would sign up to a Common Corporate Tax Base (CCTB).
That would create a harmonised tax base so that a company which operates in several member states would know that in each member state its profits would be taxable the same way, and that exemptions, deductions and losses would be also be treated the same way for tax purposes.
Once a Common Corporate Tax Base was established, the next phase would be to create a system whereby tax liabilities would be “consolidated”.
That would effectively operate on a formula that would apportion how much tax is due to which member state.
Under the proposal, a group of companies would be allowed to add its profits and losses from all subsidiaries together to reach a net figure.
Tax would then be paid on the group’s net profit for the whole of the EU.
This will effectively bring to an end Ireland’s tax haven incentives such as Double Irish.
(3)…European heavy-hitters have been warned not to come after Ireland’s low corporation tax or we will leave the EU, too.
Our regime is expected to come under renewed scrutiny in the wake of Britain’s exit as they were our strongest ally in fending off demands for tax harmonisation.
…But Fine Gael MEP Brian Hayes told the Irish Independent: “That is the absolute red line issue. Any attempt made to cajole us [on corporation tax], as far as I’m concerned, we’re out the door.
Ireland’s tax haven status and leprechaun economics regime will soon end.
(4)Times they are a changing: It’s not only on this blog you will find growing support for Ireland exiting the growing shambles of the EU. Gay Byrne is now in favour of Ireland’s exit. Let’s ignore his implied call for a rerun of the Brexit vote.
To follow on from last blog, some links on the growing mess of Deutsche bank commentary by Bill Holter:
a) Deutsche Bank Walking Dead (under capitalised) https://goldsilver.com/blog/deutsche-bank-walking-dead-bill-holter/
According to Bill Holter Deutsche bank is the most systemically dangerous bank in the world, the biggest link in the derivative chain. It cannot return from the dead. 50-77$ trillion derivative exposure, walking dead institution, once you start talking about them being solvent, game is over. Zero volatility in credit and stock markets they are in lockdown.
Deutsche Bank stock market capitalisation something like 12-15bn dollars, they are under capitalised just to get to Basil 111 requirements, then there is a 14.4bn fine against them, they have no money to cover this.
Any type of margin call will take them down…if they break the whole market goes, Italian,Spanish, Austrian banks Irish banks Portuguese banks waiting in line, amount of capital they have against the amount of derivatives they carry and are counter party for….what took years and years to grow the derivative market they will destroy markets…
Deutsche Bank is a Black Swan being pumped with air from QE that cannot go on forever. There is a limit on what can be pumped from the 99% to further inflate the assets of the 1%.
Looking forward the EU brought about a lot of good to Europe. The challenge will be to retrieve in any future cross border free trade agreements. cultural, social and educational relationships, that the bonds that have proven of real value, be retained and nourished to grow and prosper.
An inner core that has fed on the periphery to the extent that Greece, Ireland, Portugal, Spain have been forced into economic collapse by a plan promising stability, security and prosperity for all, will not hold forever.
Meanwhile Europe needs to rid itself of the legacy of a poorly constructed plan built only to serve the needs of the 1%.
October 2, 2016
Last scene of Margin Call derivatives being sold. All these financial instruments that were dumped landed somewhere perhaps inflating the Deutsche Bank hot air balloon.
Meanwhile Deutsche Bank has vowed to challenge a $14bn claim by the US Department of Justice to settle an investigation into its selling of mortgage-backed securities.
“Germany’s second largest bank by assets, Commerzbank, announced an overhaul of its structure on Thursday following what it called “current market rumors.”
The trouble with Deutsche Bank is it sits on a financial portfolio upwards of $50trillion of financial instruments.
In a growth pyramid profits can be huge. Following 2008 there has been increasing effort to regulate derivatives and conduct business on public exchanges. Regulation has paved the way for more scrutiny of financial markets and loss of investor confidence. In turn this has led to market collapse of share price of Deutche Bank. Global recession and negative interest rates have put further pressure on this bank.
It may well be if the bank is considered too big to fail TBTF that it will be broken up into manageable parts. Its too bog to bail out. The danger is that a bank run and collapse will leave investors stranded. In Cyprus there has already been precedent of Bail In. Investors should be worried at they stare into the vista of upwards of 50% loss on their deposits and investments.
Ireland’s Property Market Scam
FG have released their action plan on housing and its derelict.
In spite of its unveiling one family with 6 children turfed out of their rental accommodation last week spent a week in inhuman conditions and they will not get a house or proper accommodation of a civilised kind. Homelessness is still on the rise.
Houses are not being built as too many would bring the price down and bring those already committed into negative equity. Its Catch 22, ending the housing crisis could bring down the banks!
Worse EU fiscal rules prevent us adequately borrowing and investing in housing. We no longer live in a market economy but in an inflated Bubble pumped full of hot air and QE and borrowings all of which appear at the moment to be in slow motion self destruct mode.
One way the government could have acted to cap the ballooning property market would be to impose a tax on foreign investor firms responsible for around a fifth of Dublin house purchases.
They did this recently in Vancouver to put a brake on Chinese money pouring into Vancouver inflating real estate and putting purchase beyond the reach of locals. A 10% tax saw property prices fall within the week.
Instead we have Rent and Housing Supplements and stories of tax relief for first time buyers all of which will be pocketed by landlords in payment for their increasing rents.
I like this piece of waffle:
“DHPCLG will work closely with the ESRI and the Housing Agency to improve understanding of conditions in housing markets around the country and thereby better inform the implementation and design of current and future policy measures.
This work will involve preparing national and sub-national geographic breakdowns of actual and anticipated supply and demand, across tenure types, based on demographic and macroeconomic developments. There will also be scope for research focusing on specific housing-related themes. ”
ERmmmm I thought the document would contain an Action Plan not an aspiration to pass the book to local authorities or some other institutional invisible with committees to come up with a specific plan.
I’m reading the document looking to see on an urban and regional basis the color coded map showing me where the residential house build will actually begin next week!
We’ve had an emergency in the HSE for the past 10 years and we now know we are short of approx 6 hospitals none of which will be built.
Now we embark on a similar journey towards homelessness. At least we could build homes when we were not a member of the EMU.
<Expect things to get worse>
Till next time…
September 1, 2016
Just listened to Tim Cook, Apple CEO, on Morning Ireland state: while he is in favour of changing and simplifying the tax laws, any retroactive finding against Apple’s tax affairs is politically motivated and unfair.
We’ll look at European Competition Rules shortly to agree or not both Ireland and Apple were in breach of the ruling to provide illegal state aid to Apple by way of a sweet tax deal.
Firstly, by way of an intro lets put away the frequent political canard that FDI investment in Ireland is volatile and at the first whiff of danger Apple and its fellow MNC’s will flee our shores.
We have a relatively stable political climate in Ireland. The island itself is easily defended and safer from foreign terrorists than other countries in Europe. Our climate is cool, conducive to the setup and maintenance of large data centres.
Most MNC’s have worldwide exports and we have airlines. Our population is relatively well-educated though on its present course it is falling behind. Relations between Ireland and parent MNC countries is good.
But Tim Cooke knows the cat is out of the bag. Ireland through its IFSC services has been operating as a tax haven for years offering off the shelf deals with a nod and wink to Enterprise Ireland and FDI has flooded to Ireland to avail of these tax breaks.
Such tax breaks are morally corrupt and illegal and represent unfair advantage given to companies operating in Ireland such as Apple.
I will not delve into but instead point out there is a need to examine the constitutionality of the tax laws that operate in this state Provisional Collection of Taxes Act 1927 (‘the 1927 Act’) and the Irish Constitution. For example. the following paper:
http://www.taxandlegal.ie/ITRSept2009.pdf examines the legality of retrospective collection of taxes eg property taxes.
Be that as it may the sweet deal provided to Apple and how it fundamentally assists in the avoidance of fair taxes locally and for example in MNC parent countries eg USA needs examination as to whether such practices a=) contravene the rights to fair collection of taxes of the Irish people as set out in the Irish Constitution b=) contravene the constitutional rights of other taxpayers in other jurisdictions.
This matter has wider implications than those raised by European Competition Authority rules. We are considering here no taxes for the 1% and taxes for the 99%.
The great edifice of international tax rules has been carefully scaffolded through armies of lobbyists and legal eagles to carefully construct non-payment of taxes by MNC’s.
This scaffolding has been built and funded mainly by those seeking unfair advantage and profitable benefit for the financial interests they represent. This does not include the interests of taxpayers.
Readers of this blog will know my position supporting IRexit in support of Brexit( see last blog ) and I fundamentally disagree with the Orwellian powers given to TFEU the Treaty on the Functioning of the Union eg:
“Article 3 1.The Union shall have exclusive competence in the following areas:
(a) customs union;
(b) the establishing of the competition rules necessary for the functioning of the internal market;
(c) monetary policy for the Member States whose currency is the euro;
(d) the conservation of marine biological resources under the common fisheries policy;
(e) common commercial policy”
Realising how little our politicians know about managing our finances under such rules perhaps aided by our so-called economic management committee excluding such matters from both political and public perusal it comes as no surprise politicians deliberating on our response to findings against Ireland and Apple should want to defer decision until this coming Friday to give themselves time to inform themselves.
It’s surprising Michael Noonan should wish to squander public money in appealing this long deferred ruling by the European Commission against Ireland. Its surprising compared to the paralysed silence of Irish politicians in objecting to the odious terms of our financial bailout. The IMF had more objection to the terms of our bailout than local politicians. Its surprising given the support of the Irish government for Europe.
But then considering the incompetence involved in such an ill judged decision its of no surprise. The decision will consolidate Ireland’s reputation an an international tax haven pariah.
So I could take the view this is just another example of Michael Noonan’s compliant and obedient servility to the rules of gross incompetent obedience to demands made by shadowy financial sector powers in handling our financial affairs.
On the other hand, I might take the view that the Irish government is slowly waking up to the fact that it is in the belly of a boa constrictor when it comes to Europe. Noonan’s ardour for Europe is dampening somewhat.
See article 3.1.
- Europe is flexing its muscle establishing it alone has the right to establish european wide competition rules.
- Europe can dictate Ireland’s monetary policy.
- Conservation of marine resources…we know what we’ve lost there
- Common commercial policy (do the bidding of the large group of financial lobbyists that control the EU)
Basically the sooner Minister Noonan goes the better. His bailout negotiations were a dismal failure culminating in usurious and uxorious repayment terms to Ireland. Only mitigated when it was noticed terms given to Ireland were a lot worse than those negotiated with Portugal and Greece.
Now with the latest Apple debacle he wants to challenge using taxpayers money the finding of approx €13bn underpayment in tax to Ireland in a sweetheart deal that fleeces taxpayers across the world.
Mr Noonan instead of bowing to the inevitable is bowing to the dictates of an international tax pariah system fleecing taxpayers across the world, of which he has made the Irish government a lynchpin and tax haven cog.
He has made this country look ridiculous and ludicrous in his efforts to return a potential windfall of €19bn to Apple.
Think of this. Given the level of control of our economy in 3.1 above do we need our large Dáil with all its deputies and the cost of their pensions and salaries with powers given to them that are but toothless window dressing?
We’ve had enough of fiscal rules eg extortionate bailout; Irish Water served up with homelessness; extortionate rent serfdom to our young people.
Now the new mission of safe return of €19bn of Irish tax payers money to Apple?
Please support IRexit.
The Dáil is due to debate the Commission ruling on Apple today 07.09.16. A defence bulwark in support of appealing the decision is the claim that the Revenue deal on Apple was not selective, other companies could avail of this.
Lets leave aside the investigation if this was/is true for other companies operating in Ireland, surely the whole point of the Commission ruling from a competition perspective is that inter alia Ireland being a member of the EU with EU law taking precedent over Ireland’s laws, we are in breach of European Competition rules that affect taxation policy.
It’s ludicrous to propose as a defence the right of Ireland as a sovereign nation to invite companies such as Apple into Ireland with sweetheart deals that put other European nations at a competitive disadvantage.
Over here, over here, don’t waste your tax dollars in other European countries we can recycle your profits so you pay no taxes due anywhere!! If the government doesn’t like these rules it needs to leave the EU and support IRexit as I do.
Otherwise, stop wasting Irish tax revenues on a Fool’s errand that will make us the laughing stock of the world, put us in direct conflict with a ruling supported by 28 EU commissioners and the EU itself. Its asking that we get rubber stamped as a tax haven, a Corporation Tax Global Recycling dump, to help MNC’s avoid fair taxes owed to the taxpayers of the world who need healthcare and education politicians are failing to provide.
August 7, 2016
Anybody watching the Olympics and admiring the wonderful apartment buildings built in a short number of years to house the athletes with state of the art accommodation? Wondering why we can’t build the same here to house the homeless, our student population, first time buyers requiring starter homes at a reasonable cost?
Fiscal rules imposed on us arising directly out of our membership of the EU prevent us developing this state in the way our people wish for and require.
Wondering why our Irish Water fiasco has continued to date with a committee deliberating on overturning the will of the Irish people against privatisation and off the balance sheet accounting? It’s the odious fiscal rules again.
We have the longest hospital waiting lists per capita in the EU, standards in our universities nose diving because of poor funding, rising teacher student ratios, natively educated doctors and nurses fleeing our health service and our banks coming out bottom of the pile in European stress tests.
But according to the CSO with growth rates of 28% of GDP we should be the fastest most prosperous economy in Europe. Hell no.
CSO is a state propaganda machine peddling unreliable statistics for years mostly based on sand. In this case jigging the figures from dollar based multinationals suddenly their income in euros goes up because of the falling value of the euro against the dollar; more companies from the US acquiring mailbox identities in the IFSC.
Before the practice is guillotined by incoming new presidential candidates whoever they may be.
Little tax is paid here by such companies. Hey presto we have a GDP of 28% sparking government panic wishing to predict growth forecasts of less than 1.5% to keep wage rises at those austerity levels while income rises of 10-15% are the norm for France and Germany!
You would think with rents rising to astronomical levels government would urgently address the problem as they have in Vancouver, Canada by imposing a tax of 15% on foreign property investment mostly effecting the vast amount of capital pouring into Vancouver from China.
That bubble has burst.
Nope, NAMA here in Ireland has a policy of selling off vast property portfolios tax free to vulture funds with eyes upon a quick buck in the Irish rental sector.
Irish companies and individuals pay tax on their earnings and profits; vulture funds through accountancy tricks can even set themselves up as having charity status meaning on earned profits of eg €25ml immediately exported to parent companies offshore with €250 tax paid, I kid you not.
Meanwhile we read propaganda that there is a huge rise in people from NI and UK wishing to take out Irish passports because of the UK’s wise Brexit.
They would prefer to remain in Europe!
Lets look at Europe’s economy and its banking sector for a moment.
Mario Draghi’s Negative Interest Rates and QE is quickly running out of steam.
“More specifically, 20% of the €10.4 billion ($11.7 billion) of corporate bonds the ECB bought between June 8 and July 15 had negative interest rates. Another €3 billion of company debt has been purchased since then, with plenty more negative-yielding bonds probably mixed in….
While negative interest rates are great for issuers—they are effectively being paid to borrow—this relatively new financial phenomenon has downsides, particularly for banks. European banks have announced relatively grim quarterly earnings over the past few weeks, with many bemoaning how hard it is to make money when interest rates are so low, compressing the “spread” between what they can charge for loans and what they must pay out to depositors.
ECB board member Benoît Cœuré warned in a speech last week that there comes a point when the detrimental effects of negative rates on banks outweigh the benefits of the institution’s bond-buying program. That point has not yet been reached, he says.”
In other words the EMU is running on nothing but hot air at the moment. QE is pumping billions into the banks that are being steadily suffocated by negative interest rates. Bond buying by Draghi is saving banks and corporations across the emu that without such QE stimulus would see them go under sparking the domino effect.
Loss making enterprises are being financed to make more losses while the euro itself is being pillaged and looted to have its purchasing power reduce and reduce. The savings and wealth of the 99% is being squandered away to pay for the ongoing losses of the 1%.
But global economic problems run even deeper than problems with the euro. Today across Venezuela and many countries in Latin America its currency in crisis food queues are the hallmark of an oil rich economy.
Likewise many countries in the third world have seen their GDP dropping in the face of falling mineral revenues due in part to falling commodity prices in a self reinforcing spiral of a slowing global economy and more and more fraudulent manipulation of currency movements and global financial markets serving the needs of the 1% at expense of the 99%.
The current world monetary system assigns no special role to gold; indeed, the Federal Reserve is not obliged to tie the dollar to anything. It can print as much or as little money as it deems appropriate. There are powerful advantages to such an unconstrained system. Above all, the Fed is free to respond to actual or threatened recessions by pumping in money. To take only one example, that flexibility is the reason the stock market crash of 1987—which started out every bit as frightening as that of 1929—did not cause a slump in the real economy.”
That was way back in 1996. At that time the benchmark of the gold/dollar peg was the value of gold expressed in terms of global economic activity based mostly on industrial output and industrial activity. Over the decades since 2010 financialisation has come to dominate:
“Financialization describes an economic system or process that attempts to reduce all value that is exchanged (whether tangible or intangible, future or present promises, etc.) into a financial instrument. The intent of financialization is to be able to reduce any work product or service to an exchangeable financial instrument, like currency, and thus make it easier for people to trade these financial instruments.”
The problem is financialization has long since lost its base in industrial output and agricultural activity. The means by which the financial world slices and dices financial instruments through hordes of people whose livelihoods depend on these activities has become a virtual pretend black is white falsehood world exploiting and fraudulently manipulating and corrosively damaging the global economy.
This is a world hoovering of resources by too big to fail banks upward to the 1% powerful enough to benefit from the vast manipulation of money and markets. Steadily resources have been stripped from the middle class, from democratically built institutions, from governments and now countries eg Venezuela and Greece are wantonly being consumed by such pillaging.
In the last scenes in the movie “Margin Call”, bond traders attempt to save the bank by selling what they know to be dodgy doomed to fail assets on their books to whoever will buy them.
I suspect on the other end of these lines were mostly traders from European banks. These dodgy assets are still on the books of eg Deutsche Bank.
Acknowledging the collapse of 2007/8. Aware that the policy of printing money QE is damaging the world economy and only postponing inevitable collapse, something must be done.
Bernie Sanders calls fr 21st century Glass Steagal Act https://berniesanders.com/yes-glass-steagall-matters-here-are-5-reasons-why/
“4. The repeal of Glass-Steagall is further corrupting the culture of banking – if such a thing is possible.
Sanders was right when he said on Saturday night that “the business model of Wall Street is fraud.” The traditional practice of what Sen. Elizabeth Warren calls “boring” banking – opening savings accounts, reviewing loans, and providing other customer services – has largely been supplanted by high-risk gambling and the aggressive hustling of dubious investments to unwary clients.
The level of fraud unearthed since the 2008 crisis is nothing short of breathtaking. (The fact that no senior banking executive has gone to prison for that fraud is, if anything, even more breathtaking.) How did that happen?
Citigroup’s Reed wrote that the repeal of Glass-Steagall led to the “very serious” problem of “mixing incompatible cultures” – which, he said, “makes the entire banking industry more fragile.” He discussed the relationship-based, sociable culture of traditional banking, emphasizing its incompatibility with the risk-seeking, “short termist” mentality of investment bankers who seek “immediate rewards.”
Something much more radical than Repeal of Glass Steagal must be done. Nothing more than the repeal of the decision to end the gold/dollar peg is an urgent necessity.
“On the afternoon of Friday, August 13, 1971, these officials along with twelve other high-ranking White House and Treasury advisors met secretly with Nixon at Camp David. There was great debate about what Nixon should do, but ultimately Nixon, relying heavily on the advice of the self-confident Connally, decided to break up Bretton Woods by suspending the convertibility of the dollar into gold; freezing wages and prices for 90 days to combat potential inflationary effects; and impose an import surcharge of 10 percent, to prevent a run on the dollar, stabilize the US economy, and decrease US unemployment and inflation rates, on August 15, 1971:
- Nixon directed Treasury Secretary Connally to suspend, with certain exceptions, the convertibility of the dollar into gold or other reserve assets, ordering the gold window to be closed such that foreign governments could no longer exchange their dollars for gold.
- Nixon issued Executive Order 11615 (pursuant to the Economic Stabilization Act of 1970), imposing a 90-day freeze on wages and prices in order to counter inflation. This was the first time the U.S. government enacted wage and price controls since World War II.
- An import surcharge of 10 percent was set to ensure that American products would not be at a disadvantage because of the expected fluctuation in exchange rates.
Speaking on television on August 15, the Sunday before the markets opened, Nixon said the following:
The third indispensable element in building the new prosperity is closely related to creating new jobs and halting inflation. We must protect the position of the American dollar as a pillar of monetary stability around the world.
In the past 7 years, there has been an average of one international monetary crisis every year…
I have directed Secretary Connally to suspend temporarily the convertibility of the dollar into gold or other reserve assets, except in amounts and conditions determined to be in the interest of monetary stability and in the best interests of the United States.
Now, what is this action — which is very technical — what does it mean for you?
Let me lay to rest the bugaboo of what is called devaluation.
If you want to buy a foreign car or take a trip abroad, market conditions may cause your dollar to buy slightly less. But if you are among the overwhelming majority of Americans who buy American-made products in America, your dollar will be worth just as much tomorrow as it is today.
The effect of this action, in other words, will be to stabilize the dollar.“
The ending of the gold/dollar peg was meant to be temporary.
It is leading to ruination of the global economy, its growing instability, it threatens democracy itself, it’s an unfair burden on the 99%.
It is leading to hunger, homelessness and war even in countries once thought to be prosperous with a bright future.
Time to end a failed experiment doomed to fail more……