Shylock’s Pound of Flesh!

February 28, 2014

The three bailiffs, An Taoiseach, Enda Kenny, Minister for Finance, Mr Noonan and joined now by Minister for Justice and Law Reform, Alan Shatter are at one in their aim to scuttle Senator Quinn’s Upward Only rent Review bill.debtpercapita

They occupy  a parallel universe where black is white, musketeers of  ignoble, compliant  obedience to an unregulated financial sector to which taxpayers are offered as sacrificial lambs.

At European level they’ve failed to free Ireland from bonds of odious bailout with senior bondholders paid in full and levels of debt due to bank bailout suffocating development of the economy.

Ireland of all bailout countries in the EMU, has been dealt with the worst mainly through the incompetent decision of the previous and current government to ‘take a hit for the team’.

Noonan has singularly failed to get debt relief from its odious bailout by negotiating a deal on retrospective recapitalisation of banks.

In an absurd take on Ireland’s debt woes, the level of propaganda and falsification of our debacle has reached new heights with European Commission president José Manuel Barroso’s  invited to Ireland to accept an honorary doctorate of Laws from UCC.

(1)”Categorically rejecting suggestions Ireland should now be helped by Europe, at least in the short to medium term, European Commission President Jose-Manuel Barroso cut loose on Ireland.

He added that a deal made by finance ministers earlier this week on a banking union  was “for the future” and was “not retroactive”. Clearly Barrosa is at odds with Enda Kenny on this interpretation. Kenny and Shatter interpret black and white differently to the rest of us.

According to Mr Barroso the problems in the Irish banks caused a “major destabilisation” in the euro.

“I am saying this because it would be wrong to give the impression that Europe has created a problem for Ireland and now Europe has to help Ireland.”

“”So the euro was not the cause of the problems of Ireland. The euro was a victim of the problems by some practice, irresponsible practices, in the financial sector, that I repeat were not the responsibility of the European Union that at that time had no competence of all in matters of supervision.”

Barroso in reductio ad absurdum mode is a contradiction  stating “European Union that at that time had no competence of all in matters of supervision”. What?

Just as someone throwing petrol on a fire without supervision contributes to combustion, Ireland’s membership of the EMU and adoption of an unregulated currency was caused by ECB poorly designed with lack of a banking union authorisation effectively functioning in the supervision of member Central Banks.

Ireland was fed subprime mortgage finance by ECB ill-equipped to manage its monetary affairs in a badly designed EMS.

ECB’s limited remit of control of inflation while turning a blind eye to corruption, political and banking incompetence in outer core members led disaster.

Indeed Lack of regulation in Ireland is currently used by Barroso as justification of the need for a new banking union, a regulated framework for a new European Monetary System.

Barroso like Pilot washing his hands claims lack of EMS responsibility for a lack in prudential oversight when none existed from ECB….?

Who is fooling who in this tale of puppet masters and glove puppets?

The euro as a credit union currency was built on a foundation of regulatory pyrite; its walls have cracked and continue to crack,  in spite of efforts by Barroso to deny this is so.

Similarly in regard to breaking news today from Ukraine, already having given €13bn in grants and loans to Ukraine, Barroso is downplaying talks of further loans and aid.

Consider that Ukraine is in a state of bankruptcy with a huge problem of political corruption and facing the danger of civil war, the mind boggles at the empty logic behind Barroso’s claim to offer Ukraine sanctuary in the EU, without massive state aid from the EMS.

Barroso downplays reports of large-scale aid.

His remit is obviously to defend the EMS inner core for any financial liability for any debt either in Ireland or elsewhere in outer core EMS or, as now, for Ukraine. The EMS is a divided currency union based on debt extraction from the outer core to the inner core, a currency union feeding upon itself.

Bank rolling political corruption and insolvency would appear to be the unregulated role and aim of the EMS. The Bundestag cannot be too happy with the consequent risk to German finance.

The Ukrainian and Irish people deserve better.


Michael Taft(3) has published these charts that get behind the propaganda hiding our true debt levels as eg % of GDP where GDP is falsified by MNC figures :debtpercapitaincome

“Measurements which use GDP as the benchmark can distort Irish data given that GDP is flattered by the accounting practices of multi-nationals.  For instance, when using Gross National Income as the benchmark (which is equivalent to GNP) which removes international flow such as profit repatriation, debt in Ireland is 143 percent of GNI.  This is the second highest, only exceeded by Greece.  But the fun doesn’t stop there.  The ESRI has found that even our GNP/GNI is inflated due to multi-national activities (undistributed profits of headquartering multi-nationals).  If this was factored out, we’d be reaching Greek levels of debt.”

In spite of the inglorious efforts of our three musketeers above, Ireland remains an EMS toxic debt dump looted by international hedge funds collecting trophy property portfolios at knock down prices, riven by dreadnought austerity with the future culling of its educational and health and public service.

Future growth is Ireland is not about the piecemeal addition of a slight improvement of the patient on the Irish economy’s death-bed, it’s about dealing with the major obstacle to growth represented by our unsustainable and toxic debt levels.

Our current head in the sand government’s denial of these self-evident facts is a political failure trumped with propaganda claiming success with payback consequences for future generations.

Upward Only Rent Reviews

“You will answer
’The slaves are ours.’ So do I answer you.
The pound of flesh which I demand of him
Is dearly bought. ‘Tis mine, and I will have it.

Minister For Justice, Equality and Law Reform, Alan Shatter and Minister of State Michael Ring are opposed to the Upward Only Rent Review Reform Bill of Fergal Quinn which seeks to curb the rights of businesses to demand a reduction in rent proportional to their falling business levels and proportional to austerity cutbacks imposed on other areas of the Irish economy.

Yes, once again, its one law for the rich, another for the poor.

The modern day version of Shylock’s insistence of payment of Antonio’s flesh from Merchant of Venice(1596) is seen in ‘upward only rent reviews’ in Ireland.

Particularly reprehensible in Shatter’s statement is the attempt to equate the rights of owners of UO’s to their rights under the constitution.

Article 21 gives the power to the Dail to bring forward a Money Bill that could declare the troika bailout terms and lack of retroactive recapitalisation of our banks, as odious, and not in keeping with our sovereign constitutional rights stated in our constitution’s preamble. It could also be a base to defend against the unconstitutionality of UO’s rather than its opposite:

“And seeking to promote the common good, with due observance of Prudence, Justice and Charity, so that the dignity and freedom of the individual may be assured, true social order attained, the unity of our country restored, and concord established with other nations”

Clearly UO’s are unjust. Falling incomes, increasing taxes, smaller business throughput, means the Sheriff of Nottingham’s can only increase rent, not decrease rent?

One law for the financial sector, another for Joe Soap.

Article 43 of the constitution:

“2. 1° The State recognises, however, that the exercise of the rights mentioned in the foregoing provisions of this Article ought, in civil society, to be regulated by the principles of social justice.

2° The State, accordingly, may as occasion requires delimit by law the exercise of the said rights with a view to reconciling their exercise with the exigencies of the common good.”

Legislation curtailing the odious UO’s needs to be implemented immediately for the sake of the common good. Article 43 could be invoked to defend against the unjust extraction of contract terms negotiated in different times under sets of expectations that have altered and changed.

It’s ironic that Shatter invokes the constitution to defend the rights of the few at the expense of the majority.

UO’s (Upward Only Rent Reviews) in legal terms echo Ireland’s political compliance and obedience to the financial sector, the banks and their well paid legal guardians. The figurative use of the phrase refers to legal at the same time unreasonable recompense.

Members of Seanad Eireann led by Senator Fergal Quinn have published a Bill proposing to ban UO’s .

The odious and constricting weight of the financial system, the banks, is used  Oct 2 in an attempt to stifle debate on the matter by Michael Ring TD on behalf of Alan Shatter. Justice, Equality and Law Reform are absent in the following:

“However, it is also the case that not all tenants are in financial or trading difficulties and, notwithstanding some of the baggage that may arise out of our history, regard must be had to the fact that some landlords have their own financial difficulties, for example, a landlord may be dependent on receipt of the contractually agreed rental income in order to discharge a mortgage obligation on the leased property. In purporting to treat all tenants equally by giving them the benefit of the Bill’s provisions there is a risk that some will be given a benefit which they do not need and that some landlords may suffer disproportionate disadvantage. Furthermore, the complexity of the financial arrangements which sometime underpin commercial lease arrangements is completely ignored in the Bill.”

The above approach is in striking contrast to that of Iceland that has recently written down mortgage debt in order to boost its own economy.

A large part of the loan book of Irish banks is served by loans given out into the commercial property sector to landlords with mortgages the banks want paid bank, or banks risk their loan book with their capitalisation in danger of further write down.

This places the financial sector at odds with the requirements of a growing economy imposing an impedance on viability and sustainability for businesses facing higher costs and lower returns across the board.

Higher taxes, lower business activity due to the effects of austerity on the business community and general population should in a reasonable state of affairs reflect lower rental/lease cost for business owners.

Less for the majority feeling the brunt of austerity does not mean less for the financial sector would appear to be the maxim followed by the present government. Ironically they were put in power by the people to defend the people against the banks and financial institutions.

These same arguments were previously used to justify the payoff of senior bondholders who could not believe their luck the Irish paid up on their casino bets on Irish banks following their financial meltdown.

We have yet to get a banking inquiry to get to the heart of the matter to settle the argument between Jean-Claude Trichet in his then role as head of the ECB who argues he did not force the guarantee on Ireland, nor did he demand Ireland should repay all its senior bondholders.

The odious and deeply onerous ligature of residual debt obligations following the Irish bank crisis is exemplified by UO’s and is a signal of the malaise of deflationary tendencies in the Irish economy that will impact and deeply inhibit recovery.

Suffocating and constricting debt levels grow while profits, salaries, expenditure in the retail economy slows.

Deflation in the Irish economy because of its troika bailout terms and lack of retroactive bailout of its banking sector is more severe than at first glance. Its hidden by repatriation of profits by MNC’s distorting figures such as debt to GDP CSO figures. Michael Taft’s charts here attempt to describe debt burden for Irish people in a more revealing way.

Without shared write-down of these OU’s profits on smaller footfall especially in the retail sector will be made uneconomic leading to further business closures. Once again the property and financial sector is being protected while the retail and real economy along with prospects for future generations thrown to the wolves. A property bubble encouraged by the banking sector would appear to be on the horizon, a repeat of past errors.





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