The Irish Presidency and the vision thing

Presidential candidate Independent Sean Gallagher and his wife Trish arrives at Google HQ in Dublin ahead of a on line and radio debate.Photo:Leon Farrell/Photocall Ireland

HERE we are with just a couple of days to the vote for our next president, and the front runner by a distance is a relative nobody with a slightly hazy past.  
Sean Gallagher has never been elected to anything (other than internal Fianna Fail party positions), and he's never made a significant speech about anything.

Beyond a few recent soundbites, no one really knows what he stands for or believes in.  His achievements and record to date are so inconsequential that him running for the presidency is, in my view, an insult to the office.  

But of course he's been on a popular TV show, so in today's crazy world that qualifies him to represent the country.  If it wasn't so serious it would be funny.  

Not that it matters that much, as we keep saying here, since the president of Ireland has so little power anyway.  But it's both laughable and deeply depressing that a small time businessman with Fianna Fail connections who made most of his money during our dodgy building boom and hasn't really done anything else of note, is about to be elevated to the highest office in the land.

Unless the polls have got it completely wrong, of course.  Gallagher is so far out in front in all of them that it's hard to imagine they can all be that wrong.

But a disastrous performance by Gallagher on the last TV debate between the candidates on Monday night could change things.  He struggled badly to answer questions about his company and personal finances and also about his role as a fundraiser for Fianna Fail.

The studio audience jeered and laughed at his attempts to position himself above all this "negative campaigning."  The fact is he has real questions to answer and he's dodging them.

His performance will have made many viewers think twice about voting for him. So there's still a chance that the Labor candidate, Michael D. Higgins, might catch him if he gets enough transfer votes from Fine Gael supporters.

Higgins is not perfect either, but at least he can point to his experience as a government minister and a lifetime spent as a university teacher and a politician who has been a leading voice in the country's intellectual life for decades.  He may be a bit emotional and there may be a touch of the eccentric professor about his persona, but he's credible presidential material.  

Gallagher, in contrast, is a salesman with not too much behind the sales pitch.  He was one of many Fianna Fail back room boys who rubbed shoulders with Bertie Ahern and even Charlie Haughey over the years.

He was active in party organization and fundraising, like a lot of other small time businessmen and builders (he runs a company called SmartHomes which puts cable systems in houses).  He was involved in fundraising dinners in which builders and business people got to share a table with senior Fianna Fail politicians.

But there is no sign in his record of any political achievement or policy role, or of the vision thing that one expects a potential president to have.

Yet the three main opinion polls published over the past week all put him way out in front on around 40%, with Higgins second on around 25%, Martin McGuinness third at 15% and the rest trailing badly.  

It is, as I said, just possible that Higgins could do it.  But it will take a massive swing among voters in the last few days and the transfers of votes from eliminated candidates will be critical.  
Those of you with long memories will remember that something like that happened back in the 1990

Presidential election when Mary Robinson, also backed by Labor, became president. When the Fine Gael candidate (Austin Currie) was eliminated almost all his votes transferred to Robinson, pushing her ahead of the frontrunner Brian Lenihan Senior.  

If enough detail emerges in the next few days about Gallagher's activities in Fianna Fail to take the shine off his image as the cool, clean hero, history might just repeat itself.  But that depends on Higgins getting well above 30% of the first preference votes.  

We have nothing against Gallagher in this column.  lt's just that one expects a future president to be someone of real substance rather than a Mr. Average who got where he is in this campaign simply because he was on the panel of the Dragon’s Den TV show.  

What's next?  President Louis Walsh, courtesy of The X-Factor?

Back in the real world, there are growing concerns about the financial crisis in the Eurozone and on the impact that could have on our fragile stability here.

Even assuming that the French and Germans can stop arguing long enough to agree on a major package of measures to be announced this week, the future looks uncertain.

The problem for French President Nicolas Sarkozy is that the French banks are up to their necks in Greek sovereign debt.  A major write down of that debt will destroy France's triple-A credit rating and with it Sarkozy's chances of re-election.

So Sarkozy wants agreement on a European rescue fund of over a trillion euros rather than the few hundred billion that is there at the moment.

For German Chancellor Angela Merkel, she knows that whatever is agreed will end up being paid for mainly by German taxpayers, and at this stage they have had more than enough.  Whatever chance she has of staying in power depends on not upsetting them even more.

The malaise that is dragging Europe down in general is a lesser version of the madness in Greece, where for years living off the state, not paying taxes and bribing officials to get the services you need became the norm.

The rest of Europe is not that bad, but the huge deficits run by the other weak countries in the euro zone are similar -- and Ireland is no exception.

It all comes down to the culture of entitlement that is there, the belief that everyone has a right to a certain standard of living, housing, health, education and so on.  If the individual cannot earn it, then the state must provide it.  And if the state cannot afford it, you march and protest and demand your "rights."  

The problem for Ireland, and for much of the rest of Europe, is that people have a very inflated sense of rights that many European states cannot provide without running huge budget deficits.  Productivity is too low, costs are too high, manufacturing has migrated to the Far East and unemployment is too high.

It's hard for people to shake the habits and expectations they formed during the good times; they still want the same lifestyle even though there's not enough money to pay for it.  They feel entitled to a much higher standard of living than, for example, workers in the parts of the world that actually produce most of the manufactured goods we use these days.

Solving this conundrum, while still managing to hang on to power, is the puzzle facing political leaders in Europe today.  It means taking control of national budgets and trying to bring state spending into line with tax revenue.  This has implications for the biggest spending areas of government.

In Ireland's case, for example, welfare (over 30%) health (30%) and education (almost 20%) take up around 80% of all state spending.  Cutting those areas back is not easy because people are immediately affected and emotive cases arise.

But there is huge spending that is questionable, and the state is seen both as a soft touch and a bottomless pit.  One much publicized welfare case here recently showed that an out of work Dublin family with four children (one with special needs) is getting just over €90,000 a year.

A more typical level for a family with four kids with both parents out of work, including rent supplement, would be around €45,000.  But even at that level, there is clearly a strong disincentive to work.

The plethora of extra state payments that are available in addition to basic welfare for being out of work has resulted in a section of our society in which being on welfare becomes a job in itself, an acceptable norm.  

Health is always an emotive issue, but the fact is that we have probably the most expensive and least efficient service in Europe.  Just last week it emerged that some nurses were doing their week's work in three 12-hour shifts.  

Our hospital consultants are among the highest paid in the world.  Yet we have queues at A&Es and waiting lists for surgery.

There is one interesting link between health and the third big area of state spending, education.  We are producing a couple of hundred doctors here every year, at huge cost to the taxpayers who fund the universities, yet we have to import doctors from India and elsewhere because our own graduates don't want to work in our dysfunctional hospitals.  

Education in general here is extremely expensive (teachers earn much more than their counterparts in the U.K. for a shorter school year) and it's still not producing what we need.  We have a serious problem with math and science, which are way behind what is required in today's jobs market.

And the situation on languages is a disgrace.  We are still forcing kids to spend hours every week learning
Irish when call centers here have to hire young adults from the rest of Europe, who are multi-lingual, to fill their jobs.

Those are just a few examples.  The general point is that there is a vast amount of state spending here which is
misdirected, unnecessary, and fails to produce the desired outcome.

Changing that here, like in the rest of Europe, is the biggest challenge facing us.  That's the way the crisis in Ireland, and in the euro zone, will be solved.

With another draconian budget just a few weeks away in the first week in December, this is a far greater issue than anything that has emerged in this presidential campaign.

In the next few years, however, having a president who can help to hold the country together as this painful adjustment takes place would be a big help.  Which is where charisma and the vision thing are important.
Sadly, they are in short supply among the candidates before us.

Is the Irish presidential election just a distraction?

 Sean Gallagher at the press conference following the Prime Time Presidential debate. Picture: Sasko Lazarov/Photocall Ireland

The ongoing Irish presidential election is just a distraction.  An amusing one at times, I admit.  But a distraction nonetheless from some extremely serious issues that are crying out for attention here.

One of them came up last week, an issue that is causing sleepless nights to thousands of people here.  But it was swiftly drowned in the sea of electioneering nonsense.

We'll come back to that in a minute.  But first let's get the distraction out of the way.

There's just a over a week to go in the presidential election now and the papers here are full of it.   It's the dirtiest campaign ever, with each day bringing embarrassing new revelations about the candidates.

If it's not Michael D. Higgins smoking dope, or Dana's "family secrets,” it's David Norris doing his son of Dracula impersonation.

Norris has been so freaked by the media that he now has a ferocious toothy grin permanently fixed on his face whenever he appears in public.  Between that and his crazed eyes, it's extremely disturbing.

This week we reached a new low, with one paper running a story claiming that one of the candidates had been reported to the police last week for making an unwanted sexual move on someone -- over 20 years ago!

No name was given, and I'm not handing out prizes for guessing right.  It just shows the level we've got down to here.

In a different league, because it's serious, is Martin McGuinness, desperately trying to find answers that are acceptable in the south to the kind of questions about his past that no one in the North bothers to ask anymore.

As you know, he was confronted last week by the son of an Irish soldier killed by the IRA after they had kidnapped a supermarket boss in the south in the 1980s.   The confrontation with the dead soldier's son was caught on camera and McGuinness’s feeble, slithery attempt to deal with it has done him no favors with voters.

And there is more where that came from, given the violence the IRA was guilty of in the South over the years when they were "fundraising" from the banks, running protection rackets and intimidating witnesses in court cases, among other activities here.

The big surprise has been the emergence of the independent candidate Sean Gallagher, who topped the list in one opinion poll here last weekend, way ahead of Higgins who everyone had thought was a shoe-in.  

Gallagher's claim to fame is that he was one of the millionaire investors on the Irish version of the Dragon's Den TV show.   Being a well-known face is half the battle, plus he is emphasizing his business experience at a time when the economy is badly in need of a lift. People seem to be impressed by that.

But the reality behind the image is not so impressive.   It turns out he's not so rich, since he was very slow in paying back a small state grant he got for one venture (he switched companies to try to avoid it).  Another venture to develop a housing scheme has bitten the dust.  

So far Gallagher has managed to float above the personal mud that is flying in the campaign.  And he has managed to maintain the fiction that he is a non-party candidate.

Technically he is, but that ignores his involvement with Fianna Fail at senior level for years, on the National
Executive and as political secretary to a former minister for health.   He now claims to be independent, but he's really Fianna Fail-lite, the soft option for all the Fianna Fail voters out there who don't have a candidate to vote for, and all the Fine Gael voters who have given up on Gay Mitchell and will die with embarrassment if Higgins gets in and starts emoting for Ireland.  

So there's really no mystery about Gallagher's "surprising" rise to the top of the opinion polls.   There's a huge army of people out there who used to vote Fianna Fail, and Gallagher is "independent" in the right way to appeal to them.

Plus he's not a Fine Gael old hand like Mitchell.  He's new, he's well-known from TV, he's a pretty good candidate and a good performer on the campaign trail.  

He's also a people person, and I have a story to illustrate that.

My teenagers reminded me a few days ago that the very same Sean Gallagher appeared in their school last year to give a talk (he was invited as a successful businessman, famous then only for being on Dragon's Den).

He made a huge impression on my boys and, believe me, that's not easy.

Here's how he did it.   He started by telling the kids that he had impaired vision (which is true) and that those at the back of the classroom were a bit of a blur to him, so he couldn't be sure if they were boys or girls.  But he would do his best, he said.

When he finished his inspirational talk about being an entrepreneur, he invited questions and asked the kids to say their name when they were asking one.  The discussion became pretty intense, and soon kids were jumping up all around the room to fire questions at him and argue with each other.  

In his answers Gallagher frequently referred to what other kids had said, naming them and pointing to exactly where they were in the room as he did so.  

"It was amazing Dad,” my son said.  "He remembered all the names and where everyone was and what they said, even people at the back of the room.  I don't know how he did it.  You should vote for him."

I probably won't, even though that is more impressive than anything I've heard about the other candidates in this presidential campaign.  

I'll probably vote for Mitchell because the guy has earned it. He has the most political experience, he doesn't talk bull, he's the only one with the balls to tackle McGuinness and he's not trying to pretend the presidency is some kind of executive role.   Not that my voting for him is going to matter, given where he is in the polls.  

None of it matters anyway, as I said above, because it's all just a silly distraction.  Given the real problems we face and the real decisions we have to take, it's in the same territory as rearranging the deck chairs on the Titanic.

One of these real problems is the second wave of the financial crisis that is now hitting home here.

The first wave to hit was at what economists call the macro level and involved getting tens of billions to save the banks and then getting the bailout for even more tens of billions to save the state.  It flattened the country, saw unemployment soar and cost us our economic sovereignty.

A lot of people thought that was the end of it.  But no, there's a second wave in our financial crisis that is now hitting us at what economists call the micro level.  Or the individual level.  

Instead of the big time speculators and developers who stung the banks for a billion or more each, this one involves the individual home owner, the individual family. It's the mortgage crisis.

Typically it involves someone who bought a home during the two or three years when the boom was approaching its peak in 2007.  That person probably paid somewhere between €250,000 and €500,000 and it's now worth half what they paid.

Given the collapse in the economy, the individual also may have lost his or her job.   If it was a couple, one or both of them may unexpectedly be out of work.  

So they can't make the payments on the 100% mortgage they took on.  If they sell they will only get half what they paid for the property, and even if they give that back they will still owe the other half to the bank they got the loan from.

As I explained before here, unlike in America you can't just throw the keys back at the bank and tell them to keep the house and wipe the loan debt. Here you still owe all of the money.

If it were just a few people here who were in this situation it would not be too difficult to handle.  But it's thousands, tens of thousands.

According to the Central Bank, there are now 46,000 households that are three months behind on payments, and of those just over 40,000 are more than six months in arrears.   People who work in the personal finance sector here say that the real figure for those in serious difficulty is more than 10% of all mortgage holders.
The problem is that there is no way out for these people.  There is no IMF bailout for them.

The IMF bailout money the banks got was calculated to include provision for a reasonable level of individual mortgage default.  But instead of using it to let individuals default on their mortgages or write down some of the debt, the banks are holding on to it for their reserves and demanding full payment from the householders.
Well, that's what banks do.  They screw everyone.

The problem for the government is that a solution has to be found for this mess, otherwise there's going to an awful lot of families on the streets and an awful lot of suicides.  It's that serious.

So the government set up a think tank of experts led by one Declan Keane, a top level KPMG accountant on secondment to the Department of Finance.  And just over a week ago the Keane Report was published.

What it had to say was buried under stupid election "news" about our presidential candidates, which why I'm saying this election is a silly distraction from things that really matter to tens of thousands of people.

The big news in the Kenny Report is that there is no easy solution, which is no surprise to me.  What it comes up with is a list of options for the government that can be taken to alleviate the situation.  But most of them are unsatisfactory from the individual's point of view.  

The big failing in this report is that most of what Kenny is proposing leaves the banks virtually untouched. But then that's hardly a surprise since Kenny comes from KPMG, one of the three or four big accountancy firms that dominate the market here.

The members of his think tank were all insiders like him, bankers, accountants, politicians, senior civil servants.  It's the same old inner circle of "experts" who sat on their hands while the banks dished out huge loans on 100% mortgages to people who could not afford them if anything went wrong.

These are the same "experts" who watched the property boom spiral out of control and talked about a soft landing.  

So instead of forcing the banks to take a big hit and write off large chunks of these mortgages to reflect negative equity and/or inability to pay, the banks have got off scot free.  The report rules out blanket debt forgiveness as too costly for the banks to bear.

The big idea in the report is to get local councils or the state (in other words the taxpayer) to pay off the bank loans, take ownership of the homes, and then rent them to the householders.  So the homeowners get to stay in their homes ... but they don't own them anymore.  

No embarrassment, just a nice, neat solution.  And the banks get ALL their money back.  

The report estimates that up to 10,000 people will take this option, lose the ownership of their homes and pay rent instead to keep the same roof over their heads.   The report says that mass debt forgiveness for those in negative equity is too expensive and would cost the banks around €14 billion which they cannot afford.

The report says that the vast majority of mortgage holders can and must continue to repay their debts, perhaps at a slightly lower rate over an extended period.

This means that many of these householders will get to the end of their working lives after making huge mortgage payments every month for years and they still won't own their homes.

There are other options in the report, but they are all variations of these two basic proposals -- lose ownership or extend the loan term to forever.  

All of this is wrapped up in complex financial jargon about mortgage to rent schemes, split mortgages, parked loan sections, trade down schemes and so on.   But the bottom line is that the banks get back their money in full. And the householders and the taxpayers are screwed once again. The government now has to decide what to do.  So we will wait to see what the decision is before exploring this any further.

In the meantime, we can all amuse ourselves with the election for a president who won't have any power to change a thing.

A president with no power - what the Irish leader can and cannot do

David Norris campaigning on Moore Street in Dublin on Monday

The presidential campaign sparked into life here last week with more embarrassing revelations about the candidates uncovered by the media.

Probably the most eyebrow-lifting was the revelation that David Norris was on disability pay from Trinity College for 16 years, even though he was a senator at the time.

He wasn't well enough to lecture the students, it seems, but he was well able to lecture the nation from the Senate.

It's hard to know who to blame more, him or Trinity. Money that should have been used to run the university (which like all Irish universities is under severe financial pressure) was being diverted to provide sick pay for Norris, even though he was on a Senate salary.

Then there were the revelations that he had an affair with a student (which teachers are not supposed to do) and that he had tried to get citizenship for a more recent boyfriend.

And the questions about the clemency letters he wrote for his former lover who had been convicted of rape continued. His credibility is completely blown at this stage.

There were less dramatic, but interesting, revelations about other candidates. Mary Davis, we learned, was appointed to so many state boards during the Bertie Ahern era that she must have spent hours getting the stains of the gravy train out of her stylish suits.

She does a lot of talking about volunteering, but it turns out she was getting over $200,000 a year for her role as head of Special Olympics.

Another "independent" candidate, Sean Gallagher, was in Fianna Fail for 30 years and did not resign from the national executive of the party until this year.

Dana, it turns out, is an American citizen, which seems a little odd for someone who wants to be an Irish president.

The Sinn Fein candidate Martin McGuinness faced even more questions last week about his IRA past and is still not answering any of them. The Fine Gael candidate Gay Mitchell is so invisible he hardly matters, but one paper reminded us last week that he has a cousin who is one of Ireland's biggest criminals, which at least got him a headline.

Only the opinion poll leader, the Labor Party candidate Michael D. Higgins, appeared to be untouched last week by the shock headlines. But give it time.

Higgins was quite the radical leftie in his younger days, very anti-American and anti-Israel, and very admiring of Cuba and dodgy places in South America, and there are lots of his emotive but naïve speeches from the old days on file.

The mud flying last week was partly a result of how boring this election has been and how desperate the media are to stir things up.

It was also a reflection of the caliber of the B-list of candidates we have to choose from. Each day's papers seem to bring new embarrassing revelations about them.

It's mildly amusing, but the public mainly remain indifferent, even bored. They rightly see that the presidential race is of little importance given the extent of the real problems we face.

Unlike in the U.S. or France, for example, where the president has real power, in Ireland the president has little or no power to do anything other than stand to attention at ceremonial events, look dignified, wave, shake hands and make uplifting but fundamentally empty speeches.

In that sense, it doesn't really matter who gets it. That's the reality and people here know it. It makes some of the campaign "messages" from the candidates in this election laughable.

There has been a lot of talk about working for jobs, restoring the economy, providing real leadership, re-establishing faith in our political system, honesty and transparency and so on. It's all aspirational waffle.

The next president, like previous presidents, will have no power to do anything effective to influence any of these issues.

So before we all get carried away on the river of hype, let's reconsider exactly what an Irish president can and cannot do.

The president is the first citizen of Ireland, and the Constitution says he or she takes “precedence over all other persons in the state.” That much is clear.

Does this mean the president is the most powerful person in the country?

Certainly not. The role is mainly ceremonial and symbolic. In fact being president severely restricts the office holder, something previous occupants of the office who were former senior politicians, have found difficult to accept.

The fact is that the president cannot make a speech of any significance without first clearing it with the government. The president even needs the permission of the government to leave the state -- an indication of where the real power lies.

The taoiseach (prime minister) is the most powerful political office in Ireland.

The president does perform an important constitutional function. But the role is mainly one of watchdog or gatekeeper rather than initiator or leader.

The president cannot initiate or even suggest legislation. But the president does have an important formal role in making the laws of Ireland because all laws must be signed by the president before they take effect.
It is in this context that one of the few real powers that the president has arises. If the president thinks a law passed by the Oireachtas (Parliament and Senate) may be unconstitutional, the president can refuse to sign and instead refer the bill to the Supreme Court for a decision.

Before doing so, the president must seek the advice of the Council of State, a body made up of former taoisigh (prime ministers), chief justices, ex-presidents and other senior officials as well as seven people appointed by the President. But the president does not have to take their advice and can refer the proposed new law to the Supreme Court anyway.

The president formally appoints the taoiseach and government ministers, but only after the taoiseach has been elected by the Dail (Parliament), and the ministers the taoiseach selects have been approved by the Dail. The president gives them their seals of office but has no choice as to who will be appointed. In a similar way, all senior judges, army officers and ambassadors are appointed by the president. But again, it is mainly ceremonial.

Most of the powers of the president are ceremonial functions, performed on the instruction of the government. It's the same with the army.

The Constitution says the president is the chief of staff (supreme commander) of the Irish Defense Forces. But the president cannot instruct the army to do anything and cannot say much about the army except "on the advice of" the government. (This may be a disappointment to that well-known army commander Martin McGuinness, if he ends up being successful!)

The president is permitted to address the Houses of the Oireachtas or the nation as a whole (probably on TV), but that address must first be approved by the government. So such a speech is not going to contain any criticism of or deviation from government policy.

The president can also refuse to sign a bill until it has been approved by the people of Ireland in a referendum.

However, the president cannot do this without receiving a petition from members of the Houses of the Oireachtas asking for this course of action. A majority of the members of the Seanad, and at least one third of the members of the Dail, have to sign the petition, which makes it very unlikely that it will ever happen. Plus the president has to consult the Council of State.

Another formal function that the president performs is to dissolve the Dail, which triggers a general election. But the president only does so following a request from the taoiseach. The president can’t decide when a general election should be held.

The president, however, does have the power to refuse a taoiseach's request that the Dail be dissolved.

Let's say a taoiseach has lost the support of a majority in the Dail at a time when there have been a number of elections in a short space of time.

A president might decide to refuse, and when this happens the taoiseach must then resign and allow the Dail to elect a new taoiseach, without having a general election.

This happened in 1994 when Mary Robinson was president. Taoiseach Albert Reynolds had lost a vote of confidence in the Dail (over the Father Brendan Smyth abuse affair) and wanted to call an election.

But instead of an election, a new government was formed by a coalition of different parties.

The president is not required to consult with the Council of State when making the decision on whether to refuse a dissolution of the Dail. This is the only time the president can act in direct opposition to a request from the taoiseach.

No president has yet formally refused a dissolution of the Dail (Robinson let Reynolds know her thinking so he did not formally ask her for a dissolution).

All of which shows that the president of Ireland does have an important Constitutional role. But very little real power. And no power at all when it comes to initiating things or changing or influencing government policy.

Instead, our president is a figurehead, much like the Queen is in Britain.

So far we have had eight presidents and the first six accepted this role under the Constitution. But the last two -- the Two Marys -- have pushed the boundaries, trying to enlarge the role and give it more influence, mainly through inspirational speeches and symbolic gestures.

Both Mary Robinson and Mary McAleese were never short of confidence or a sense of their own importance. But even they did not succeed in expanding the role.

The next president is unlikely to do so either. And looking at the candidates, that is probably a relief.

Martin McGuinness feels the heat

Martin McGuinness receives a kiss from supporter
 while campaigning in Dublin on Saturday

AH diddums!  Poor Martin McGuinness! We're all being nasty to him, it seems.  Last weekend he looked all upset and sad as he appeared on RTE News to accuse government ministers and large sections of the Irish media of using "dirty tricks" and "black propaganda" to destroy him.

Why were they doing this?  He answered his own question.  It's because he has offered to do the job of president for the average industrial wage.
That was the only reason he gave.

Which, when you think about it, is extraordinary.  Because the media are not at all interested in this petty financial matter.

What the media have been hammering away at over the past week are some of the brutal IRA actions that McGuinness was known to be involved in over the years.

Particular attention has been paid to the role he played in luring a so-called IRA informer called Frank Hegarty back to Derry in 1986, visiting the man's house to assure his mother that he would not be harmed.  When Hegarty returned he was abducted and executed by the IRA.

Another thing the media here have been concentrating on is McGuinness's claim that he left the IRA in 1974.  Security chiefs, not only in the north but in the south as well, have stated on the record that their information is that McGuinness was one of the leaders -- and for much of the time the senior leader -- of the IRA from the mid-1970s to the 1990s.  Yet McGuinness is sticking to his assertion that he left the IRA in 1974.

Now most of the time, this kind of unbelievable claim by McGuinness has not mattered too much in the south.  It has as much credibility as the claim by Gerry Adams that he was never in the IRA at all!

It's treated as a bit of a joke by most people.  The less said the better, ask no questions and you will be told no lies etc.

If it means we have peace, who cares what the truth is?  Which is fine and dandy most of the time.
But it's a different matter when we are talking about the record of someone who wants to be president of Ireland.  And it's a different matter if they are deliberately telling lies.

The fact is that the record of anyone who wants to be president here is subject to forensic scrutiny, and rightly so.  The shifting Sinn Fein/IRA dual personalities that McGuinness and some of his close colleagues inhabited in the past were tolerated at one stage because they served a purpose when efforts to end the years of bloodshed in the North were underway.

But the kind of compromises that had to be made then have no place in a presidential election in the south now.

There is no room here and now for fudging, for half-truths, for the nod and wink nonsense that we have listened to from Sinn Fein leaders for so long.

If you want to run for president here, you better be prepared to be honest and up front.  That is the minimum that people here expect.

As for McGuinness's answer that the weekend criticism is a reaction to his offer to accept only the average wage here if he is elected president, he's not fooling anyone.  In fact it's an insult to the intelligence of voters here.

That is merely a ham-fisted attempt to appeal to the many people here who are under financial pressure.  But it has no real credibility.

One reporter here noted that when McGuinness appeared on the Late Late Show last week for the special debate with all the presidential candidates there was not just one but two limos waiting outside the RTE studios for him.  One of these was a BMW X5, which is not the kind of car that anyone I know on the average wage drives.

When the same reporter tried to take pictures of the cars he was immediately surrounded by several McGuinness security men and discouraged from doing so.

This is another aspect of the Sinn Fein modus operandi that bothers people here. They may all be on the average wage, but there's a lot of minders around whenever any of the Sinn Fein leaders are moving around.
And there's an aura of power and threat that accompanies them that is very disturbing in a democracy.  Anyone who has encountered the Sinn Fein leaders up close will be aware of this.

How is this Sinn Fein machine funded? Do we even know who pays for McGuinness's expensive suits?

The answer is we don't know.   And when one government minister suggested last weekend that the Northern
Bank robbery might have something to do with it, McGuinness was quick to reply that this was "rubbish," and most Irish people here know it's rubbish, he added.

Well, he's wrong about that.  In fact most people here are very suspicious about where the £26 million stolen in the bank robbery in Belfast in 2004 has gone, because no explanation has ever been forthcoming and the bulk of the money has never been recovered.

You will remember that after the robbery, bins and bags of Northern Ireland bank notes turned up in the south and Sinn Fein people were linked to the cash.
Now 2004 is only seven years ago.  It's not ancient history.

Does McGuinness know where the Northern Bank robbery money is?  Will he tell us?  Or does he expect us to elect him president even though he refuses to come clean and tell us all he knows on this and many other issues?

That is the big problem that Sinn Fein face in this presidential election here.   They seem to think that they will get away with not answering questions, or only partly answering questions, or trotting out the same old evasive double talk like they have been doing in the North for years.

Well, sorry guys, but it won't work.  And McGuinness's sad and disappointed reaction to the questions that were raised here last weekend is perhaps a sign that he and his senior Sinn Fein colleagues are only now waking up to this uncomfortable fact.   That fact is it's different here in the south.

The other aspect to the dismissive Sinn Fein attitude to the media here is their belief that there is a historical legitimacy to the bloody campaign waged by the IRA over the recent 30 years of murder and mayhem.
The IRA "war" cannot be seen as anti-democratic or criminal because it has legitimate roots in our history.

And for that reason, they believe, many of the questions now being thrown at McGuinness in this election are based on false premises or a lack of understanding or an ignorance of our history.

The reaction to recent columns in this space makes it clear that some Irish Americans share this view.  So let's tease it out for a moment.

The argument goes like this -- the men of the 1916 Rising were only supported by a small minority of the Irish people when they rebelled, but their action is now seen as legitimate.  In the same way, the recent IRA campaign will in time be seen to be legitimate.

This ignores the fact that after the execution of the 1916 leaders public opinion began to swing behind the movement for independence, and in the 1918 election Sinn Fein won a massive majority of the Irish seats in the British Parliament, leading to the setting up of the first Dail (Irish Parliament) and the Declaration of Independence, followed by the War of Independence.

This means that the IRA's war of independence at the time had a democratic legitimacy.  The recent campaign by the IRA had no such legitimacy, either in the south or in the north.

As far as the vast majority  (over 98%) of people in the south were concerned, the campaign was continued despite their strong disapproval and opposition.  In the North, the campaign continued even though it was opposed by the biggest Nationalist party in the North, the SDLP.

Sinn Fein did not replace the SDLP as the largest Nationalist party in the North until 2001, long after the IRA ceasefire had come into effect in 1994.  Which means the IRA campaign in the North did not have a democratic legitimacy either among Nationalists or among the population in the North as a whole.

So the idea that the recent IRA campaign in the North had some kind of historic or democratic legitimacy is false.  At some point Sinn Fein are going to have to acknowledge that fact and now, as McGuinness asks the people of the south to make him their president, would be a good time to do it.

Another painful awakening for Sinn Fein that is now happening is the realization that the peace process bonus in the south is long over.  Eaten bread is soon forgot.

The electorate in the south now have other concerns, so Sinn Fein and McGuinness are unlikely to get much payback for stopping the slaughter.

As far as most people here are concerned, there is no reason for us to be grateful to McGuinness and his colleagues for finally stopping three decades of a bloody campaign because it had no legitimacy anyway.

Why McGuinness shouldn’t be President

Martin McGuinness

As predicted in this column last week, the entrance of Martin McGuinness into the Irish presidential race has electrified what had been an extremely dull election here. It has launched a bitter debate not just about McGuinness's suitability as a president, but about the bloody IRA campaign which he led for so long.

Even though it was never concluded or resolved at the time, most people had thought that the debate about the IRA was over, that it had ended with the IRA campaign.

For the sake of peace most people had been happy to let it go, to let the issues involved around the IRA/Sinn Fein double act wither away over time. For the sake of peace, it seemed better to swallow hard and say nothing as former IRA men morphed into Sinn Fein politicians who suddenly believed in democracy.

In the south, it was never a big deal because Sinn Fein was a fringe party and likely to remain so.  But it turns out that this debate is not over.

The entry of McGuinness into the presidential election has opened up the argument again.  It's back with a vengeance now because it has an immediate relevance for people here.

This time the issue cannot be ignored or forgotten or swept under the carpet or left to history.  This time, because of the presidential vote in a few weeks, people in the south have to decide where they stand on the claimed legitimacy of the IRA's so-called "war.”
If it wasn't legitimate, it was criminal. We know McGuinness was deeply involved.

So depending on your view, that may mean McGuinness was involved in criminality and that would make him an unacceptable candidate for the presidency.  

Even though it's just begun, the debate already has brought to the surface again some cases of extreme IRA violence that McGuinness was either involved in or responsible for as an IRA leader.  With over four weeks of the election to go we can expect that more of these cases will be resurrected.

Some of them are so appalling and so hard to justify on any level -- we will mention just a couple of them later -- that one would think they would automatically preclude anyone involved from becoming president.  

But this debate is not just about McGuinness's personal record. His own record is not the only reason why he should not be president.

The wider and more important reason is that electing him president would confer a retrospective legitimacy on the entire IRA campaign. And that is what this is about.  That is the main reason Sinn Fein wants to get him elected as president.

It's not about giving McGuinness a happy retirement in the splendor of the Aras (on the average industrial wage, of course!) It's about parading the former IRA leader at home and abroad as the face of a new republican Ireland, comfortable with its bloody recent past.  

Another factor in the Sinn Fein planning is that the president we elect this time will be in office in 2016 when the centenary of the 1916 Rising takes place. Think about that.

A Sinn Fein president fronting the national commemoration ceremonies would give a visual reality to the direct link that Sinn Fein and the IRA claim to the men of 1916.  It would be a massive publicity boost for them and give a new context of legitimacy to the campaign of murder and mayhem they waged over the 30 years of the Troubles.

Overtaking Fianna Fail as the party of constitutional republicanism in the south, just as it has taken the place of the SDLP in the North, has been an ambition of Sinn Fein for the past few years.  It used to be a pipe dream.

But the collapse of Fianna Fail in the election earlier this year has presented Sinn Fein with a golden opportunity to make the dream a reality. An election of a Sinn Fein president this year would make it easier for a lot of people to vote for Sinn Fein candidates in the next general election in a few years.

The opportunity to eclipse Fianna Fail and become the main opposition party has been enhanced by Fianna Fail's shortsighted decision not to run a candidate for the presidency this time.  They say they need time to rebuild the party.

But with Sinn Fein looming, this is a strategy that makes turkeys voting for Christmas look intelligent.  With the present government faced with three years of painful cutbacks ahead, people will be fed up and looking for alternatives by the time the next general election comes. It could be Sinn Fein's big chance.

The election of a Sinn Fein president this year is part of this long-term strategy, a plan the party has been working on for some time. They want to be in government north and south of the border, which they believe will make their ultimate aim of reunification easier to achieve. And when that comes about the Unionists will just have to accept the situation!

The problem with all this, of course, is Sinn Fein's selective approach to democratic legitimacy, as we have seen in the recent past, not just in the north but in the south as well. This has allowed them to refuse to acknowledge the state, the courts and the law in the south.

It has allowed them to murder Gardai (police) and ordinary citizens, to rob banks, import weapons and explosives and intimidate anyone (including juries) who may get in their way.
Their certainty not only of the legitimacy of their cause but of its supremacy over the requirements of our democracy makes them different than other political parties here.

They claim to have changed and to now fully accept and support the southern state.

But for many people here it's much too early to judge whether this is true or not.  There needs to be a much longer period of probation. That is the background to what's going on behind the headlines.

But it is McGuinness's personal record which has been making the headlines over the past week. Back in the late 1990s McGuinness told the Saville Inquiry into Bloody Sunday that he had left the IRA in the early 1970s.

Nobody -- including himself -- believes this. Certainly the British government did not believe it, since they continued to talk to him whenever they wanted to negotiate with the IRA.  And the Gardai in the south believe that he continued to be one of the top IRA leaders from the 1970s to the 1990s.

His IRA career is so well documented that it's not necessary for me to go through it here again.  From his time as a teenage butcher boy (!) in Derry who joined the IRA, quickly rising to take command of the IRA in the city, on to being head of the Northern Command, chief of staff and chairman of the Army Council.    

Some of the most infamous IRA actions took place on his watch -- Mountbatten, Warrenpoint, Enniskillen, to name just three -- at a time when he led the Northern Command or held an even more senior position.

One of the early ones I remember was the Kingsmill massacre in Co. Armagh in 1976 when the IRA stopped a bus, took everyone off, separated the Protestants and executed 10 of them.

But it is some of the lesser-known or forgotten individual atrocities that McGuinness was responsible for that have been brought up again in the media here in the past week to illustrate the ruthless cruelty with which he operated, a far cry from his recent Chuckle Brothers act.

There was the invention by the IRA under McGuinness's leadership of the "proxy bomb,” long before the Islamist suicide bombers thought of it (at least they blow themselves up, the IRA forced other people to do it).

In particular, there was the case of a Catholic man called Patsy Gillespie who worked in a British Army canteen and therefore was deemed to be a "collaborator" (not just a family man who badly needed a job).  The IRA held his family hostage while they strapped him to the driver's seat of a van with a 1,000 pound bomb and ordered him to drive the van up to an army checkpoint.  They then detonated it by remote control, killing him and several soldiers.

Or there was the case of IRA man Frank Hegarty, who had betrayed the location of an IRA arms dump to the British Army. He fled to England and was in hiding but wanted to come home.

McGuinness visited his mother several times, telling her Frank needed to return to straighten things out and that he would be okay.  When he did come back the IRA kidnapped and murdered him.  Mrs. Hegarty never forgave herself for being fooled by McGuinness into luring her son back, and years later when she took part in a TV program telling the story she was still blaming herself.

These and some of the accounts of McGuinness's actions in his earlier days in Derry -- tarring and feathering locals or doing punishment shootings to enforce his rule -- show a cold ruthlessness from the very beginning.  He was uncompromising and vicious, quickly moving on from attacking British soldiers in Derry to assassinating Catholics who were in the RUC.  

One story about him that I had forgotten resurfaced in the Irish Independent last weekend, and it's worth relaying because it typifies the absolute ruthlessness with which he operated. This happened in April of 1982 when McGuinness was chief of staff of the IRA but still intimately involved in what the IRA was doing in Derry.

In 1982 Joanne Mathers, 29, a mother of a young son, was doing a part time job collecting census forms on a housing estate in Derry.  The IRA had ordered people in Derry to boycott the census.

Joanne, a Protestant originally from Donegal who had a degree in town planning from Queen's University, was helping a man to fill out his form when she was attacked on the doorstep of a house.  A masked gunman rushed up and shot her through the neck.

The IRA denied that they were responsible, but ballistics showed that the same gun had been used in several IRA murders.  It was a big story for a day or two.

But then it was forgotten because a month later Bobby Sands died on hunger strike.  As Joanne's husband told the Irish Independent last week, everyone knows about Bobby Sands, but who remembers Joanne?

Martin McGuinness -- our possible future president -- still lives about two miles from where Joanne was shot.

All the President's gunmen

Martin McGuinness greets a Kerry football fan in Dublin on Sunday

We have resisted writing about the presidential election in Ireland so far because up to now it's been hard to take seriously. That's mainly because of the candidates who have presented themselves this time, mostly a B-list of minor politicians and minor public figures all with delusions about their own importance and abilities.

There were one or two exceptions to this. But mostly it's been a parade of pygmies with inflated egos, all of them spouting nonsense about leadership and their vision for Ireland in the future.  (Memo to all candidates -- the Irish President has no real power.)

Quite frankly, our presidential election so far has been an embarrassment. We will recap on the other candidates in a moment, but first the dramatic news last weekend that has changed everything.

At a stroke, this has been turned into the most electric and controversial presidential election we have ever had here.

We are, of course, talking about the entrance into the race of Martin McGuinness, former IRA gunman and IRA leader, Sinn Fein peacemaker, current Northern Ireland deputy first minister and, until Ian Paisley's recent retirement, one half of the Chuckle Brothers comedy duo.

That's an impressive CV Martin has. But only one part of it, the very first part, is going to matter here in the next few weeks.

Stories about all the aspiring President's gunmen will be making so many headlines in the next few weeks that everything and everyone else in this presidential race will be, ahem, blown away.

It's going to be a simple choice here. You will either be For Martin or Against Martin.

And it's likely to be a very bitter and angry debate. There won't be many chuckles around, that's for sure.
So let's get stuck into it right away. The first problem is Martin's many years as an IRA gunman and IRA leader, neither of which he denies.

In that role, like all IRA men, he did not accept the legitimacy of the 26-county Irish state.  Nor did he accept that the Irish army was the legitimate army of the state, since the IRA believed that, legally, that was their role, covering all of the island of Ireland.

The president of Ireland is the head of the Irish state and also the commander in chief of the Irish army.  Under our Constitution the president, on the advice of the taoiseach (prime minister), appoints the members of the government, the judges and army officers.

McGuinness wants to be president, but he has spent around two decades as a leading member of an illegal army that refused to accept any of this. The IRA refused to recognize the legitimacy of the Irish state, the Irish army, and the Irish courts.

There is also the problem that the president's main role in Irish politics is protecting the Constitution and safeguarding the democratic decisions of the Irish people. But Martin's loyalty was to the IRA, not to our Constitution.

He did not accept the democratic wish of the Irish people, expressed time and again in national votes, that the murderous campaign of the IRA should stop.
 
Not only did he not accept this, but he himself was an IRA leader and active IRA man when some of the most shocking and disgusting IRA violence was perpetrated.

But that's all ancient history, I hear you say. Since then we've had the peace process, in which Martin played a leading role, bringing the IRA to the point where their so-called war was ended and their weapons were decommissioned (most of them, anyway).  

It's time to move on, you say. These days Martin is a democratic politician, not a gunman. If he can chuckle away with Unionists like Paisley and Peter Robinson, surely it's time for us in the south to turn the page of history as well.

And I completely agree with you. But it would help if Martin were to tell us that the IRA has completely disbanded, that the IRA Army Council no longer exists and that its members now accept that the army of the Irish state is the only legitimate army in the country.

Above all, we need some straight talking from him. In other words, we don't need him telling us that he doesn't know, or can't talk on behalf of the IRA or what's left of it.
 
I know that last weekend Martin said that he accepted that he, like other IRA members, had a duty to heal the hurt their actions in the past caused to people.

That is welcome and there will need to be a lot more of it.  But it's not the same as saying that the actions he is referring to were wrong.  We will need to hear more on that score over the coming weeks from him.
If we accept that his IRA activity was well intentioned and the product of his past and the country's past, will he now accept and publicly state that the bloody IRA campaign was wrong and, since it did not have the backing of the Irish people, illegitimate?

And will he express sorrow that it ever happened?

He will need to be a lot clearer on this than he was last weekend when he was asked to condemn the IRA murder of Detective Garda (Police Officer) Jerry McCabe. At first he used the familiar Sinn Fein/IRA verbal trick of calling it "a terrible tragedy" and talking about understanding the grief of the family without actually condemning the murder.

A few hours later, realizing that this was not going to be enough, he told reporters that he did "unreservedly condemn it."  But it had to be dragged out of him. And that suggests that his old attitudes are just beneath the surface.

You may say that this is all southern hypocrisy. If we think it's okay for McGuinness to be deputy first minister in Northern Ireland, why is it not okay for him to be president in the South?

If people in the North, particularly the Unionists, were prepared to compromise for the sake of peace, why can't people in the south do the same?

Well, the answer to that one is pretty simple -- we don't have to. A fudge or a compromise was necessary in the North to establish the peace and get an administration in place.

In the south we don't have to compromise, and many people here will not be willing to do so. Either Martin comes clean, or he will have no chance of getting their vote.

We're only at the start of this, of course. The election is not until October 27 so there will be plenty of time to question McGuinness.

The next few weeks will be fascinating.  And you can expect lots of questions about funding.

McGuinness’s assertion that if elected he will only accept the average blue collar salary is all very well.  But what about the Northern Ireland Bank robbery millions? Will the IRA be giving any of that back?
In spite of all that, McGuinness may do well in this election. He is an engaging campaigner and there is a lot of appreciation out there for the role he has played in the peace process.

And the other factor is the weakness of the other candidates.

There's Ireland's most famous gay, Senator David Norris, who was in the race, withdrew, but is now trying to re-enter.  His problem is not his sexual orientation but his lack of judgment (Google him for the details).

Then there's veteran Labor politician Michael D. Higgins, always politically correct and full of righteous liberal rage.  Both of these guys blather endlessly and are far too emotional and impulsive for politics.

There are a few other minor candidates, including a businessman from Dragon's Den (our version of Shark Tank), a woman who ran the Special Olympics here, our former Eurovision star Dana,  and possibly an elderly Fianna Fail Senator who is a big name in Irish traditional music (although since Fianna Fail is not fielding a candidate, he will have to run as an independent).

For a while Fianna Fail tried to talk the Patron Saint of Irish Television, Gay Byrne, into running but after agonizing about it for days he eventually decided against. That was a relief because he was clearly going to be out of his depth -- the kind of simplistic views about complex problems he used to offer on radio and TV could not be put forward by a president.

Even the publisher of the Irish Voice toyed with the possibility of being our eighth president. Niall O'Dowd would have been a more coherent and articulate candidate than most of those mentioned above. But, in spite of his role in the peace process it was always going to be a long shot coming back from the U.S. to run here, and after testing the water he withdrew.  

Finally, there is Fine Gael politician Gay Mitchell, a member of the European Parliament, a very shrewd Dubliner with working class roots and easily the most impressive candidate in the field. He's a no nonsense guy with loads of experience who would be slightly right of centre on most issues.

But his big problem is that he's lacking in the charisma department and is struggling in the polls. And after the two Marys, charisma is seen as an important attribute for our president.

So looking at the rest of the field so far you would have to say that it's a B-list of candidates and not a very inspiring race.   There's no stand out potential president among them.

Looking at them you would have to think that McGuinness must have a good chance simply because of his huge profile at home and abroad. It's a pity about his past.  

As I said above, it will be very much a case of Martin against the rest.  Fianna Fail decided not to run their own candidate because they need time to rebuild the party after their destruction in the general election.

But they will do everything they can to undermine McGuinness because if he is successful he could take all the soft Republican constitutional Nationalists who are the Fianna Fail bedrock.  And that could see Fianna Fail collapsing altogether and being subsumed into Sinn Fein.

Everyone else will oppose McGuinness because the whiff of gunfire is still hanging about him.  At this stage it's all to play for.

Home is where the mortgage is

Robert Marsh recently evicted from his home by Start Mortgages. Photo:Leon Farrell/Photocall Ireland

One of the first poems Irish children of my generation learned in school was Padraic Colum's “An Old Woman of the Roads.”  It's a simple but moving poem in the voice of an old tinker woman who is tired of living on the lonely roadsides in the wind and the rain.

She longs for a little place of her own so she can be dry and warm.  She dreams of a stool by the fire, a ticking clock and a dresser of shining delph.

The poem, written almost 100 years ago, is so famous it's on the Internet now and will pop up when you search the first line: O, to have a little house!

Time has moved on, but a century later it's a sentiment shared by so many Irish people, who like the security of owning their own homes.

In contrast with many people in France or Germany, for example, who are happy to rent all their lives, most Irish people aspire to owning their own place.  It's something that probably has historical roots (years of colonization and tenancy).

Colum's famous poem may be a bit old-fashioned now -- "the pile of turf against the wall' -- but it has a new relevance here today given what's happening on the home ownership front.

The poignancy of the poem about the old woman dreaming of a roof over her head is in tune with the mood in many houses in Ireland right now, with families struggling to hang on to their homes and fearful of what may happen if they fail.

It's been called the hidden third part of our economic crisis. First part is the budget deficit, the massive gap between our taxes and our spending.  The second part is the billions the banks lost to property developers and speculators which the Irish state has taken over to stop the banks going bust and which made our national debt so huge we needed the bailout from the EU and the International Monetary Fund (IMF).

And the third part, only now becoming fully visible, is the huge problem in domestic mortgages.

With all the talk about the first two, the deficit and the banks, the domestic mortgage crisis did not got much attention up to now.  But it's been bubbling away under the surface of the financial collapse for months.

And it's now become headline news after a Central Bank report revealed that well over 10% of mortgages in Ireland is in difficulty, with people either falling behind on payments or only keeping up through a restructuring of the loan terms.
The Central Bank report said that more than 7% of all mortgages are in arrears for more than 90 days.  The number of homeowners falling behind in their repayments has jumped sharply this year and the situation is getting worse.

There are also another 70,000 people (including couples) who have restructured their loans with their banks, extending the time frame of the loan or paying interest only for the time being.  The banks are reluctant to do this, of course, but getting some money is better than nothing.

All the indications are that we have a huge problem, made up of the tens of thousands of individual people who can't pay, or are really struggling to pay, their mortgages.  If they go under, the loss goes back to the banks.

Estimates of how big the overall problem is vary from €6 billion to €10 billion or even a lot more.  Since the banks that gave out the money in mortgages are in deep trouble themselves, the bill would end up with the government and ultimately the taxpayer. Depending on how big the problem is, it could even mean we will need even more EU-IMF money to deal with it.

The money is not the worst part of it, of course. There is the human cost involved, the worry as the bills mount and the mortgage goes unpaid, the fear of losing your home and ending up on a housing list or even on the street.
 
How did we get into this situation?  Property prices here rose year after year during the decade of the boom.

People piled in and paid high prices for apartments and houses, confident that within a few years the rising market would make their expensive homes look like a bargain.  Except that it hasn't worked out like that.

What has happened is that someone in Ireland who bought a modest home for, say, €300,000 in 2006 or 2007 now finds that it's worth €150,000 today.

The Irish banks and building societies (savings and loans) were so keen to lend money during the boom they gave people loans that were 95% or even 100% of the price of the property.  Even though the apartment or house may now be worth only €150,000, the person with the mortgage may still owe the bank close to €300,000.

It's called negative equity. This means that you can't sell and pay off the mortgage.

In the U.S. most mortgages are "non-recourse,” which means that the lender can't go after you if you give the keys back and say that's it buddy, keep the house.  The legal position with mortgages here is that you still owe all of the money.

Negative equity is a major concern for many people here -- it's reckoned that at least 200,000 people (or couples) in Ireland who bought homes during the boom are now in negative equity.

They still have to make the repayments on the original loan, even though their house may have halved in value.  That's a very tough place to be, but legally there's no way out.

Negative equity itself is not the core problem, however.  There are many people in negative equity and they are still paying their mortgages. The real problem is inability to pay.

The stagnation in the economy after the boom means that many people have lost their jobs or had their pay cut or are on short time.  Two income homes are now single income, or even no income apart from welfare. So they can't pay their mortgages.

People with big mortgages who still have jobs also find they are struggling because they haven't got the increases in earnings they were expecting.   So people fall behind, they miss payments, they look for interest only deals and so on.

All of which is a huge problem for the government.  The Minister for Finance Michael Noonan told a Dail (Parliament) committee two weeks ago that the government is waiting for a report from an expert group before deciding what to do. He insisted that the government wanted to see as many people as possible staying in their homes, even if they ended up renting instead of buying.

The crisis has led to widespread calls for "debt forgiveness" for people who can't keep up mortgage payments.  This would mean the banks would write off part of the debt.

But it's not as simple as that.  For a start, it would be very difficult to limit to those who really are in dire straits.

Let's say there was some system of debt forgiveness for mortgage holders in trouble, and let's say you are behind on your car payments, your credit card payments, the kids’ school fees and your mortgage.

What are you going to do?  You're going to pay everyone else and let the mortgage mount up so you can benefit from mortgage debt forgiveness.

The other problem is what the economists and lawyers call moral hazard. If you see someone else in similar circumstances to yourself getting debt forgiveness, why should you continue to make big sacrifices so you can make the full repayments on your mortgage?  It would not seem fair, or moral.

So any widespread debt forgiveness is going to cause difficulties. There is also the fundamental problem that if it's a widespread debt forgiveness program, it's going to cost a fortune ... and someone has to pay the bill.

So far Noonan has not revealed exactly what he is going to do.  He pointed out that the banks had been recapitalized by the state (with billions from the EU and IMF) and that mortgage arrears had been part of the calculation when this money was put into the banks.  It was up to the banks to deal with the problem, treating each case on an individual case, he said.

But the banks are having it both ways.  Having got the recapitalization money, they are now holding on to it instead of using some of it to allow for mortgages that cannot be repaid. Instead of forgiving debt they are pursuing people for the full amount of their loans.

There is some anecdotal evidence that in really hard cases the banks are doing deals, agreeing to take interest only for a few years, or extending the time frame of the loan and thereby reducing payments or even in a few cases agreeing to write down the debt to an affordable level.

But the banks won't say on the record that they are doing this because they fear opening the floodgates. To emphasize this point they are still taking some people to court and repossessing homes.

Where this is going to end is anyone's guess at the moment.  Debt forgiveness is complicated because, as Noonan, there are those who can't pay and those who won't pay.

It may make sense to forgive some of the debt for those who can't pay.  But separating them from those who won't pay is not going to be easy.

One thing is sure. Putting 50,000 or more individuals, couples or families out of their homes is not going to solve anything.