Greek financial mess not comparable to Ireland

ESB chief executive Padraig McManus.

In the past few weeks the Irish Minister for Finance Michael Noonan has been stressing to his colleagues in Europe and his high level contacts in the U.S. that there is no comparison between the Greek financial mess and the crisis in the Irish state finances. "Ireland is not Greece, you know," Noonan repeated again and again to EU ministers and U.S. financial and business chiefs on his trip over there.  It became his catch phrase.

You can understand why he was at pains to emphasize the difference.  Greece is a basket case.  It's completely insolvent as a country.  It has little or no hope of sorting out the mess it is in.
And it's not just a country in massive debt.  It's a country in massive denial as well.

The Greeks just don't get it.  They don't seem to be able to grasp the concept that a country has to pay its way.

They seem to think it's someone else's fault.  They seem to think that if they hold enough marches and fill the TV news with enough mass protests, then somehow the problem will be solved.  That they won't have to cut their spending to match their revenue.

Maybe they think that the rest of Europe will keep saying okay, give them another few billion to keep them quiet.

Sadly, life is not as simple as that, even in Europe where billions gets thrown around in the name of holding the EU together.  There's a limit, and Greece is way over the line.

The fact is that it's not anybody else's fault that the Greeks are going down the plug hole.  It's their own fault.

Greece is a country where not paying your tax is a national pastime.  It's a country where the black economy is widespread so that huge numbers of people avoid paying tax and at the same time many of them claim all kinds of state benefits.  The inefficiency, everyday corruption and waste is legendary.

There are vast numbers of people on the state payroll, but no one seems to know what a lot of them do.  One (Greek) economist I heard recently suggested that the government should lock all the state offices without warning some day and do a head count.  He said that this would show that at least a quarter of those being paid were actually at home most of the time.

In Greece a lot of state workers have been able to retire in their fifties and get a full pension.  And when they die, the system is so lax that their kids go on collecting the pension (or so a recent investigation uncovered in many cases).  The same lack of checks means there is wholesale fraud across the welfare system in Greece.

And the rot starts at the top, with politicians who get big grants and expenses, senior civil servants who get dubious bonuses and gifts of holidays, and middle-rank state officials who refuse to make anything happen unless there's a kickback for them.  

One of the best examples of the madness is the pension deal for 25,000 power workers in Greece, which puts even the feather-bedding of workers in the ESB, the Irish electricity company, in the ha'penny place.
In Greece, the state has paid ****8 billion (that's over $11 billion) into the pension fund of these 25,000 lucky workers over the past 12 years.  And before you ask, the power supply in Greece is pretty dodgy.

Some of the stuff that goes on over there, you couldn't make up. Yet it's been like this for so long that it's now considered by people there to be normal, even justifiable.  

To be blunt about it, the home of democracy is corrupt.  Too many people there are on the fiddle and those who are not fiddling themselves are implicated every time they hire a plumber or a painter who is part of the black economy.

And who's going to turn this mess around?  All hope rests on the shoulders of the Prime Minister George Papandreou, whose father was Andreas Papandreou, also a prime minister 20 years ago and corrupt, and whose grandfather was Georgios Papandreou who was (you guessed it!) prime minister several times before him.
The current George, like his dad, is a socialist, and cutting back on state spending is not what he's good at.  Dishing it out comes more naturally to him.

Anyway, the current George is doing his best, mainly because he doesn't have a choice.  But the Greek public is in revolt.  There is a two day national strike happening this week over the massive cutbacks demanded by the EU and the IMF before any more billions are handed over.  

All of which explains why Noonan can assure everyone that "Ireland is not Greece, you know."
We have huge fiscal problems also and we need to cut back drastically.  But the public here understand, they are taking the bitter medicine and Irish society is holding together.

And of course there is no similarity between the inefficiency and fiddling that goes on over there and what happens here.  And no similarity between having such high numbers on the state payroll in a small country, or the number of those on big salaries and big guaranteed pensions.
No similarity at all, right?

Well, it's at this point that Noonan's dismissive "Ireland is not Greece, you know " assertion becomes less convincing.

It's at this point that we call in Declan Collier, chief executive of the Dublin Airport Authority (DAA), which runs the airports here.  His total package in 2010 totaled €612,500.

That's not bad, considering that in 2009 passenger numbers fell by 13% and last year they fell by another 10%, just as the white elephant that is Terminal 2 opened at Dublin Airport.  It's a vast cavern of emptiness, with only a handful of the retail units occupied.

DAA profits plunged over the past couple of years but hey, so what, he jacked up the airport charges by nearly half, so they're back in the black.  The ordinary Joe can pay, right?

Or we might want to call in Padraig McManus, chief exec of the previously mentioned ESB, the semi-state which has supplied us with power over the years. He had a package of around €750,000 in 2009.

It was reduced a bit in 2010 but it's still huge.  No doubt the Greek power workers would applaud, but the rest of us, facing electricity prices that are among the highest in Europe, might not.

Not that the cost of electricity would bother Padraig since he gets a 50% discount on his own bill, like all the other ESB workers, who have average pay of around €76,000 a year.

And that's average pay, so it covers everyone including the guys with the shovels who put up the poles and the guys with the screwdrivers who do the wiring. They're probably the best paid power workers in the world.  With probably the best pensions.

Outside Greece, of course.

These are just two of the many semi-state organizations here who have had virtual monopolies for years.  The ESB is now facing some competition, but its size still makes it dominant.

And the DAA still has the kind of monopoly that would make even the Greeks envious.

That's just two of our semi-states, but the same point applies to all of them -- they don't face real competition or real risk.  So they can charge what they like and pay themselves packages that match the private sector where real risk has to be faced.

The chief executives of all the Irish semi-states are at it.  The head of An Post has been getting around €400,000 for delivering the mail. The boss of Coillte, the forestry organization, was getting around €300,000 for looking after the trees.

The head of Bord na Mona was getting the same for minding the bogs. Even the boss of Bord na gCon (the greyhound industry) was getting almost as much.  Talk about going to the dogs!

And of course this seeps down through senior management and staff, in a culture of high pay, low efficiency, long holidays and a nice easy working life with a lovely fat pension to follow.

The same culture is there in politics, the civil service, the judiciary and right across the vast numbers on the state payroll.  It's a culture of high charges, high salaries, high pensions.

And it's the pensions part that really infuriates people in the private sector, most of whom have seen their pensions decimated by the crash in the markets.  The high pensions for state workers here are paid out of state funds (i.e. borrowing) and are guaranteed. Just like in Greece.

This can't go on, of course, and the government is now taking the first steps to reforming the system.
Last week it announced that semi-state bosses, senior civil servants, judges and other top dogs are to be hit with big pay cuts to cap their salaries at €250,000.  What they didn't make clear is that these guys are still in line for pensions that would cost a private sector worker millions to fund.

And the politicians who are in charge of the system do very well out of the pensions racket, of course.
The reason all this is important is that unless there is top down reform, ordinary workers on the state payroll here won't accept pay cuts and higher efficiency changes.

One of the few exceptions to the salary ceiling is our pal Padraig, the head of the ESB, who will still be getting well over €300,000 for keeping the lights on.  How will he survive?

Maybe the Greeks can give him a few tips.

A gutless first 100 days for new Irish government

Taoiseach Enda Kenny and Tanaiste Eamon Gilmore at a press conference last week to discuss the government’s first 100 days in office

Last Friday the new Irish government reached its first 100 days in office.

Like in the U.S. when a new president is in office, this is traditionally the point at which the media in Ireland assesses performance.  It's a bit like a school report.

And in spite of the best efforts of the Taoiseach (Prime Minister) Enda Kenny at a press conference last Thursday to look like the best pupil in the class, the report was not good.

It was one of those reports that give an A for attendance and presentation, but a D for effort and performance.  It was a lot worse than a "must try harder"  verdict.

Most of the media took the view that in spite of the genial, super-confident image that Kenny likes to project, the reality is that he and his Cabinet are failing completely to get to grips with the crisis we face.  They are probably on a D, but they're not far off an F for fail.

Kenny works hard at looking relaxed.  He's been all smiles and good humor during the first 100 days, and his Cabinet have been floating along serenely behind him.

But Kenny’s mildly amused superman persona is just an act.  And underneath the surface he and his team have been paddling furiously in what appears to be confusion and panic.  

It's like they have all been stunned by the size of the immense task that confronts them.  But they knew before the election.  We all knew.

The problem is that this did not stop them making foolish promises that suggested there might be an easy way out.   And they repeated this stuff so often that they started to believe it themselves.

As a result they have drifted through the first 100 days without really doing much, like a school kid hoping that ignoring the problem would make it go away.

Now it's wake up and face reality time, both for them and for the electorate. The latest figures from the Department of Finance show that we are failing to get to grips with the situation.

Between the €18 billion deficit and the extra cost of servicing our growing debt, the state this year will have to borrow at least €30 billion, which happens to be the equivalent of the estimated total tax that will be raised by the state here this year. That's total revenue from all taxes, not just income tax.

To begin to turn around this catastrophic situation we need immediate, decisive and drastic action, big cuts in state spending and big hikes in taxes.  We probably need another emergency budget to get it started, and  a TV state of the nation address by Kenny outlining what has to be done and explaining why.
Instead of tackling the problem head on, the government over the past 100 days has tried to float above it, as though it doesn't exist.

Instead of bold action, we have got lame assurances that we can still manage the situation by making minor adjustments here and there, as well as a lot of confusion.

An example of this confusion came, appropriately enough, in Kenny’s 100-day press conference.  Kenny was asked about the statement by the Minister for Finance Michael Noonan in the Dail (Parliament) a couple of weeks ago that, because of the difficult economic situation, he could not rule out tax increases in the budget later this year.

"As head of the government ... and this is very clear ... there will not be any income tax increases in the budget," Kenny said last Thursday.

Standing beside him, Tanaiste (Deputy Prime Minister) Eamon Gilmore added to this by guaranteeing that there would not be any decrease in unemployment benefit in the budget either.  So whether people have a job or don't have a job, their income will not be cut this year, Gilmore explained.

Of course Kenny was talking only about income tax, and there are a lot of other taxes and charges that can be imposed.  But it was hardly the right message for either him or his deputy to be putting out there.

It carries the implication again that we can muddle our way through this without feeling any real pain.  And that's just not true.

Meanwhile Noonan, the man they were undermining, was in Washington last week telling the media that we are going to burn some senior bondholders no matter what the European Central Bank says.

We have already burned a lot of the subordinated bondholders in banks here.  But the EU has insisted as part of our bailout deal that we cannot touch the senior bondholders.

To do that could shatter confidence across Europe, the European Central Bank (ECB) says.   And of course the ECB itself has lent us an awful lot of money.
Noonan has now grasped this nettle and said that the senior bondholders who gambled on our two riskiest banks must pay the price.  The two, Anglo Irish and Irish Nationwide, have been taken over by the state and wound down and are not banks any more, Noonan said.

So the senior bondholders in these failed institutions are in a different position because the banks no longer exist.  They can be badly singed, if not burned alive.

All of which is entertaining stuff, but we have yet to see how the ECB will react to this.  I hope for Noonan's sake that when the pressure comes on from Europe, Kenny doesn't do another one of his smiling climbdowns.

Also, although Noonan's solo run in the U.S. was welcome, it's not just senior bondholders in the two basket cases that should be burned.  The senior bondholders in all our banks should feel the heat because they have all failed.  Only Bank of Ireland remains outside state control and that is teetering on the brink.

The idea of burning senior bondholders is supposed to be completely unacceptable, of course. The ECB and others say it could undermine confidence in the whole banking system in Europe.

But how come it's acceptable to burn shareholders in banks and roast Irish taxpayers so that senior bondholders can be insulated from the fire?
Senior bondholders include major pensions funds, the argument goes, so you can't burn them.  But most of the shareholders in our banks are pensioners as well.

Some heartbreaking stories have emerged in recent weeks here about old folk who put all their savings into bank shares so that the interest would pay for their care homes.  Some of them spread the risk by buying shares in the two biggest banks, AIB and Bank of Ireland, instead of just in one.  Now both are virtually worthless, and these old folk cannot pay for their care anymore.

Their life savings have been wiped out.  Why should they -- and the taxpayers -- be taking all the pain?  Surely we should spread the pain around by including all senior bondholders in the mix as well?

Whether Noonan -- and his government colleagues -- have the bottle to do anything like that remains to be seen.  Certainly the record of the first 100 days would not fill you with confidence.

Remember all that stuff before the election about how we had lost our economic sovereignty and they were going to take it back.  It would be Labor's way, not Frankfurt's way.

It would be a lower interest rate on the bailout.  It would be a five point plan to get us back on our feet. It would be a jobs budget to introduce a whole new approach to create 100,000 jobs.

It all sounded great and the electorate bought it.  They only half believed it but they wanted to dump Fianna Fail, so they went with it anyway.

Now, 100 days later, we can see that it was all a bottle of smoke.   The new government policy is exactly like the old government policy.

Before the election the incoming government asked to be judged after their first 100 days.  Well, on the two big issues, the report card has to give two Fs.

Europe has refused to cut the interest rate on the bailout. And if we do get a cut -- or an extension in the term -- it's not likely to be big enough to make much difference.  So much for Kenny's special relationship with Angela Merkel.
What has also become clear over the past 100 days is that we cannot sneeze without the permission of the EU and the IMF, unless we want to risk the money taps being turned off.

The EU-IMF made it clear to the new government that they could fulfill any of their election promises, as long as they were budget neutral.  In other words, no extra spending unless there's a corresponding cut.

So the great plans for a jobs budget to create 100,000 jobs was watered way down to a jobs initiative, which may or may not create a few thousands jobs, and that is being funded by an extra tax on the pensions of private sector workers.      

What has also become clear in the first 100 days is that servicing the enormous bad debt of the banks is so costly that there's no money left to do anything.

The only way out, as Professor Morgan Kelly said, is to take the hard decisions quickly.  The first 100 days has shown that this government, in spite of its huge majority, just does not have the courage to do that.

Brian Lenihan: the lost leader

Brian Lenihan pictured with a copy of the Irish budget in 2008.

THE profound sadness across the country at the death last week of the former Minister for Finance Brian Lenihan crossed party lines, social levels and age groups.

It was a universal grief, a feeling shared by everyone here that we had lost one of our best, taken from us in tragic circumstances at too early an age (just 52) and at a time when politics in Ireland really needs people of his caliber and integrity.

In Hemingway's memorable phrase, courage is the ability to show grace under pressure, and Lenihan was the perfect example of that.   For the past year and a half he was battling both deadly pancreatic cancer and the biggest financial crisis ever faced by the state, an exhausting double burden.

Because the news about his illness had leaked out, he had to do it in public.  Yet he managed to do so always with composure, eloquence and good humor.

He never complained or looked for sympathy, or even a little time off. He maintained his dignity at all times, as well as a sunny optimism that was infectious.  

It was an extraordinary exhibition of grace under extreme pressure, of true courage.  The people of Ireland recognized that and they admired him greatly for it.  

So when he lost the battle with cancer last week a wave of genuine sadness swept over the country.  It just didn't seem fair that someone so gifted and so good had been dealt such a rotten hand.  He deserved better.

In some ways Lenihan seemed to be a throwback to an earlier golden age in politics, when a certain formality and a degree of reserve were combined with honesty and charisma in leaders like Jack Lynch, or even JFK.  

Lenihan had the same patrician aura, the same commitment to public service, the same style and ease, the same gift for oratory and the same capacity for hard work.

He should have been leader of Fianna Fail and taoiseach (prime minister), but Bertie Ahern, probably recognizing the threat from his ability, did not promote him early enough and so we got Brian Cowen instead.

When Cowen took over as taoiseach halfway through 2008 he had the good sense to make Lenihan his minister for finance.   But already the storm clouds had gathered, and it became Lenihan's unenviable role to be the public face of Ireland's financial crisis as the economy faltered and we teetered on the brink of collapse before the eyes of the world.  

From then until the defeat of the Fianna Fail led government in February this year Lenihan was in the center of the storm, facing a crisis of such magnitude that it threatened our very sovereignty.  

It was a crisis on a scale that no other minister for finance here had ever faced since the foundation of the state.  And for part of 2009 and all of 2010 -- right through the time we were forced into taking the bailout from the EU/IMF -- Lenihan had been undergoing treatment for pancreatic cancer, one of the most deadly forms of the disease.  

The pressure must have been horrendous, with endless draining meetings at home and in Europe, yet he never faltered and he did what he thought was best for the country in very difficult circumstances.

Patrician is a good word to apply to Lenihan, in its best sense.  He came from a privileged background, something that can often spoil a person, but in his case had the opposite effect.  He appreciated deeply the advantages he had been given by birth and he used them as best he could, not to line his pockets, but to make the country a better place.   In that he was a Fianna Fail patriot in the old tradition.

He was part of a political dynasty, with a grandfather and father who had both been in the Dail (Parliament).
His father, also Brian, had been tanaiste (deputy prime minister) and a presidential candidate, and was probably the most popular Fianna Fail figure of his generation.  

Brian junior was sent to the famous Jesuit school in Central Dublin, Belvedere College, alma mater to a long list of high achievers from James Joyce to Tony O'Reilly, and then went on to study law (like his father) at Trinity College and in Cambridge.  He excelled at everything, getting a first in Cambridge.  He was fluent in Latin and French as well as Irish, a cultured man who read voraciously and carried his learning lightly.

He worked as a lawyer and a university law lecturer, but after the death of his father politics claimed him.  Ahern left him on the back benches for years before eventually making him a junior minister and then minister for justice.

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Read More:
Brian Lenihan dies, Former Irish Finance Minister was an heroic figure who battled deadly cancer

Even for politically adverse youth, Lenihan was a hero

Brian Lenihan, former Irish finance minister dies of pancreatic cancer
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He had to wait for Cowen's arrival before being given the top job in the Cabinet.  He became minister for finance in May 2008 just as the economy began to fall apart.  It was the unluckiest timing imaginable.

With only a brief ministerial career behind him and knowing no more economics than any young lawyer, however brilliant, it was instant immersion in the complexities of high finance, fiscal policy, budgets, banking, bondholders and bullying international bodies like the European Central Bank and the IMF.

He learned fast because he had to, and in pressure situations in press conferences with financial journalists firing complicated questions he not only coped but was impressive.

He appeared to have a firm grasp on the issues and on what he was doing.  And he was courageous and proactive.

He was so alarmed by the mess we were in, by the shrinking tax revenues as the construction boom collapsed and the yawning deficit in state finances that he introduced an emergency budget within a few months of getting the job.

Including that one, he brought in four tough budgets in his three years as minister for finance, imposing the cutbacks and corrections that we needed to do to get our borrowing back onto a sustainable level.

That job is not finished yet.  There is still a long way to go, a lot more pain to come, with more tax and more cutbacks in state spending. But the heavy lifting on the overall budget problem was started by Lenihan.

It cost him and Fianna Fail dearly, although most people realized that the mess was not of his making. Indeed, it seems certain that if he had been in finance earlier he would have cut through the soft landing baloney of the Ahern/Cowen clique and started the correction long before it did happen.

In spite of this he is likely to be judged harshly by history because he was the one, with Cowen, who introduced the blanket guarantee for the banks.  He had only been minister for a few months when Anglo Irish started to go belly-up, and the markets were getting very nervous about our main banks as well and their massive property loans.

On that infamous night in September 2008, with the top bankers in the country warning him that the whole system was on the point of collapse and with it the Irish economy unless the government stepped in with a rescue, Lenihan signed up to the blanket guarantee.

From Europe he was being urged to do it by the head of the European Central Bank, Jean Claude Trichet, who told him the Irish banks had to be saved for the good of the country.  

Of course we now know that what Trichet was really concerned about was contagion from a banking collapse in Ireland to banks in Europe.  If it meant the Irish taxpayer had to be buried under a mountain of debt to prevent a crisis in Europe, so be it.

What the guarantee meant was that the enormous bank debts were transformed into state debt, with the taxpayer liable for everything.  In retrospect it looks like a disastrous decision.

But we have to remember that at the time no one realized the scale of the problem.  Lenihan was being told by the experts around him that the problem was manageable, that it was a temporary problem of liquidity in the main banks, not a solvency issue of banks that were going bust.  

Lenihan was surrounded by Department of Finance officials who were incompetent and did not understand what was going on. In fact it is likely that even the top bankers who were minimizing the problem on the night did not themselves realize just how big the problem actually was.  

It wasn't long before the truth began to emerge.  The markets were not fooled and no one would lend to Irish banks.

Having nationalized Anglo, Lenihan eventually had to pump so much borrowed money into the two main banks that one is already owned by the state and the other is about to follow.  Along the way the two biggest building societies (savings and loans) ended up in state ownership as well.  

Lenihan set up NAMA, the state agency designed to take the bad property loans off the books of the banks so that they could start lending to business again and get the economy going.  That is now costing us a fortune and the banks are still not lending.

And finally, at the end of last year, Lenihan was forced to swallow his pride and accept the bailout from the EU and the IMF for Ireland, with all the humiliating conditions that are attached.

So overall, as I said, history may well judge Lenihan harshly. However, it can truthfully be said that on the evidence available to him at the time, the solutions he implemented must have seemed the most radical, the bravest and the best.

It is a measure of how much he was trusted and liked that even now, when we know better, there are few who blame him for the sorry state we are now in.  The new government, in spite of all the bluster before the election, is continuing along the same path.  


They are now getting ready to raid the last €5 billion from the National Pension Reserve for their jobs program.  That would be justifiable if we could be sure that the investment would produce enough to pay the pensions when they are needed, as well as jobs now that may or may not last into the future.  

We were all told, Lenihan included, that to let the banks here go bust and to burn the bondholders and the French and German banks which had poured money into the Irish banks would be an absolute disaster.

We were told that it would make Ireland into a financial leper colony and that the money markets would never touch us again.  So the state had to step in with the guarantee.

In spite of us doing this, however, the Irish banks and the Irish state still can't borrow money on the markets.

The government's aim is to start borrowing from the markets again next year, but some experts are saying it will be 2013 at the earliest before we will be able to do so, and that is dependent on meeting our deficit targets.

Iceland, you my remember, did the opposite and let its banks default when it got into trouble at around the same time as Ireland. Yet it is now back in the markets successfully raising money at around 5%, which is not only a lot cheaper than the 11% yields last week on five year Irish bonds but even cheaper than the bailout we have been given by the EU/IMF!

Lenihan would have got a laugh out of that.  He had no problem laughing at himself.  He will be missed.  

We’re broke and we don’t need blarney

Transport Minister Leo Varadkar.

The euphoria generated by the visits of the Queen and President Obama has now worn off. We were on a high here for a while and it certainly was a welcome break from the depression that has pervaded the country for the past year or more. But last week it was back to reality with a bang. And boy, that reality sure is grim.

Last week the latest figures for unemployment showed that the number out of work is going up, not down; it's now at 14.8%, up from 13.2% a year ago.

Also last week we learned that the interest payments on our huge debt burden are now eating up HALF of all the income tax raised in the state.  And of course the debt is still growing at a dizzying rate because the state is still spending tens of millions every day we don't have.

In fact a government minister here let it slip last week that we might need a second bailout from the EU-IMF, like Greece, which will add even more to the mountain of debt that is crushing our economy.

All told, it's a pretty grim picture.  On top of that last week, government ministers were also talking about a water charge and a household charge, both of which we are committed to introducing under the terms of last year's IMF-EU bailout.

And in case you're thinking that a household charge is probably some kind of payment to have the garbage bin emptied, it's not (we already pay separately for that).  It's actually a polite way of saying property tax.

So property tax is coming back, probably at a low level to start.  But you can be sure it will soar in the coming years.  Since most of our income tax will be going to pay the interest on the national debt, they have to get money from somewhere.  

Another sacred cow was led to the slaughterhouse here last week when the Minister for Education Ruairi Quinn admitted that college fees are on the way back. So much for equal access to college for everyone with ability, no matter what your parents earn.  Again, you can be sure college fees will climb quickly in the years ahead.  

So last week, after all the pomp of the royal visit and the feel-good factor generated by President Obama, the hole in the ground opened up under us again, giving everyone here that sinking feeling once more.

As I said, it was back to reality with a bang.  This country is so broke everyone here is going to swamped in extra taxes and extra charges until we are squeezed dry.  

For the million and a half people who have a job it's tough enough.  Many of them are already struggling to pay big mortgages, school fees, car payments and all the rest of the good life stuff that became normal during the boom years.

But for the nearly half a million who don't have a job, it's a struggle to keep the roof over their heads and food on the table.   For those out of work and in negative equity, it's a nightmare.

All of which, in retrospect, makes that Obama speech at the huge event at College Green in Dublin look more idiotic than inspiring.  All that Yes We Can, Is Feidir Linn stuff is patronizing and insulting rather than useful.  It implies that we don't understand the scale of what lies ahead of us and that positive thinking is going to be enough to get us through it.  

Well, I'm sorry, but a more appropriate and certainly a more honest rallying cry for us at the moment would be No We Can't.

By loading the enormous bank debt on top of our state fiscal debt, the government and our EU-IMF "partners" have weighed down the Irish economy and Irish taxpayers with a burden so great that we simply can't carry it.

It's too much.  It's beyond our capacity.

The debt is already up around €125 billion, and it's predicted that it will top out at around €250 billion before we start coming down the other side of the debt mountain.

Bear in mind what I said above about half of our income tax take already being eaten up by interest payments and you get an idea of where we're headed.

And of course, there's the bigger question of the morality of Ireland borrowing all this money to pay back the bondholders and European banks who gambled on the Irish boom ... and then forcing the Irish people to pay for this with huge tax hikes and state spending cuts.

One could argue about the morality question. But it's irrelevant because it's no longer a question of whether we should pay.  The fact is we can't pay, not even if we turn this country into a Third World economy with Third World services and pay levels.

So the truth is that No We Can't pay.  And even if we could pay, we shouldn't pay unless there is large scale burden sharing or debt forgiveness by the European banks who took the risk and now don't want to share the pain.

The first step in Ireland breaking the EU-IMF stranglehold is us being able to go back into the financial markets again.  At present the markets won't lend to us except at prohibitive rates over 10%.

To change their minds we have to get our spending down, get our budget back on track, and get some realistic burden sharing into our debt interest problem.

We were supposed to be going back into the markets at the end of next year, as the EU-IMF cash starts to
run out.  But there's no sign of that being possible.

That's what the Minister for Transport Leo Varadkar said here last week.  He's a young minister with a tendency to tell it like it is.

"It is very unlikely that we'll be able to go back (to the markets) next year. I think it might be a bit longer", Varadkar said. "2013 is possible, but who knows?"

There was consternation in government circles when Varadkar let the cat out of the bag.  However, the fact is that if we can't get money from the markets in a couple of years, we WILL need a second bailout.

But that's not the government message. Taoiseach (Prime Minister) Enda Kenny and his senior ministers are sticking to the script that Ireland won't default and that we will be welcomed back into the financial markets next year.

But more and more they're whistling past the graveyard.  And to make matters worse, they're paralyzed by fear and indecision, so that even starting the process of getting state spending under control seems to be beyond them.

There has been quite a bit of criticism here of that Obama speech in the past week (some of which is on IrishCentral.com), and it's not just for the way it blithely glossed over the economic nightmare that faces us.

A lot more of it was so folksy and trite that it was insulting, even if the emotion carried the crowd on the day.  You can find the full text here.

In particular, the attempt in the speech to align the struggle for the end of slavery in the U.S. with the fight for Irish freedom over the centuries is far too simplistic.  The Irish were as racist as anyone else, as we all know.

And the stuff about how much the Irish have done for America is true ... but as we all know it's only a part of the American story and ignores the contributions of those who came from other countries which were equally important.

Of course the crowd at College Green lapped it up.  We all like to be told we're wonderful and special and therefore that we can meet any challenge in the future.

But is it really what we needed to hear from the president at this critical time in our history?

"This little country that inspires the biggest things, your best days are still ahead. Our greatest triumphs, in America and Ireland alike, are still to come,” he said.

“And Ireland, if anyone ever says otherwise, if anybody ever tells you that your problems are too big, or your challenges are too great, that we can’t do something, that we shouldn’t even try, think about all we’ve done together. Think about whatever hardships the winter may bring, spring-time’s always just around the corner."

This was the build-up near the end of the speech to Obama's translation of Yes We Can into Is Feidir Linn.

It's blarney, of course, more Hollywood than Moneygall.

And there were other references in the speech, like the one to "fallow fields," which just didn't ring true either.

Here's a bit of free advice for the president.   The next time you're doing a big speech here, get your speechwriters to run it by me, or Niall O'Dowd or someone who knows what it's like here first.  And less of the blarney would be good.

Maybe the Guinness went to his head!  

Guinness promos were in bad taste

Queen Elizabeth watches a pint of Guinness being poured at the Guinness Storehouse in Dublin on May 18.

OKAY, here's your question for today.  What was the one thing that the Irish visits by Queen Elizabeth and President Obama had in common?  

Now I know the two state visits had a dozen or more things in common and you're probably reeling them off right now, starting with the fact that both Obama and the Queen met the Irish President Mary McAleese.  
But it's not that.  It's something much more ordinary, yet something that was interesting enough to make headlines and picture stories around the world. 

Still don't get it?   Let me go give you a clue.  This something is about nine-tenths black and one-tenth white.  It often has beads of moisture running down its side.  It takes a minute or two to prepare and it cannot be rushed.  

It is, indeed, the pint of Guinness, a/k/a the black stuff, the national drink of Ireland, etc. etc.   It was the one thing, more than anything else, that linked the two visits in the coverage in the international media.  

Both the Queen and Obama did many significant things while they were here, things of great symbolism, historical importance and emotion.  But it was their encounters with the humble pint of Guinness that made the strongest visual impression in newspapers and on TV around the world. 
And I have a major problem with that.  

Now before I go any further with this -- and you will be choking on your pint by the time I am finished -- I need to own up to one thing myself.  

I love Guinness. It may be an acquired taste, but once you've got it you're hooked forever, and I've been a devotee ever since student days. Nothing else comes close to that malty, creamy, bitter taste, that smooth, bubbly swallow of satisfaction.  

In a quiet bar, in the dappled light of a long summer afternoon, a slow pint of Guinness is your only man.  On a cold winter's night, with a log fire spitting in the grate of a cozy pub, a pint of Guinness reconnects you with the things that matter in life.

Stop me before I turn into a TV commercial.  But you get my drift.  I love the stuff. 
That's not the issue here.   The issue is the way Guinness was allowed to become emblematic of the Irishness of the visit here by the Queen and Obama.  

The issue is the way their encounters with the pint of Guinness became the money shot, the must-have picture of our two very important guests enjoying their time in Ireland. 

The issue is that these are the shots that went around the world, reinforcing a certain stereotype of the Irish, as though this is all we are. 

Now I have no problem with us celebrating our pub culture, the pint of Guinness, the craic, the traditional music, the Irish stew, the smoked salmon on brown bread and all the other ingredients of the Irish pub experience that tourists - and locals - love. 

It's unique.  It's something to be proud of.   It is, indeed, part of what we are.   

But it's only a part.  There's a lot more to us, especially these days.  So there's something a little bit depressing about the way coming close to a pint of Guinness somehow became the key visual moment of the visits here by the Queen and the president.  

It's a bit depressing because it demeans us in a way, even if it's only in a small way.  
So I do have a problem with the way Guinness managed to stamp itself on the two state visits.  And I'm not the only one. 

People here have been ringing up the radio stations to make the same point, and The Irish Times ran a column about it last weekend.

The interesting thing is that no one seems to know exactly how Guinness managed it.  Who decided, for example, that the Queen would visit the Guinness Storehouse, and that while there she and Prince Philip would be offered a pint? 

Now it's true that the old Guinness Storehouse up at the brewery is the number one tourist attraction in Ireland.   It's a wonderful museum which shows you the history of the black stuff and how it has been made over the centuries.  And then at the end you go up to the Gravity Bar at the very top, the highest point in Dublin, with 360-degree panoramic windows.  

It's a great spot and it's the most visited tourist attraction in the country, so it's arguable that the decision to bring the Queen there was justifiable. 

However, what is not justifiable in my view is the way she was steered over to the bar and asked to watch and wait while a pint of Guinness was pulled for her.  Then, as the cameras clicked and whirred, she was offered the pint, which was placed on the counter in front of her.  

The perfectly pulled pint sat on the bar, with the glass turned exactly the right way so that the Guinness name on the glass was facing the cameras.

And folks, I know you are far too intelligent to think that that was an accident. 

Now the Queen has been around the block often enough to know when she's being set up.  So she declined to taste the black stuff. 

And full marks to her for that.  And anyway, she strikes me more as a gin and tonic kind of gal.
But that does not excuse the stroke pullers in Guinness and/or Bord Failte (the Irish Tourist Board) and/or whoever else was involved in attempting this stunt. 

The fact is that as far as Guinness was concerned the cameras got the money shot of the Queen with a pint of Guinness on the bar in front of her.  That shot has been on front pages and TV screens around the world.  And it will live on the web forever and be used again and again in the future.

One media executive here put the value of the publicity to Guinness at over €20 million, but I have seen another professional estimate exceeded $100 million.  

You can add up the value of the known exposure the shot has already got.  Or you can try to assess what it would have cost Guinness in promotion to generate a similar level of visibility in media around the world. 
On top of that, of course, the apparent stamp of approval from the Queen is priceless. So we're talking big bucks here.  

We're talking about a benefit that is worth huge bucks for a multinational corporation, Diageo, which has its headquarters in London, not Dublin.   It's the biggest drinks company in the world, and just a few of its many brands are Johnnie Walker, Smirnoff, Baileys and Guinness, (Guinness joined another drinks conglomerate to set up Diageo in the 1990s).  

One thing is certain -- Guinness and its owner Diageo are well able to afford to pay for their own advertising and marketing.  So why did the Irish state allow this private company to hijack the Queen's visit to Ireland for marketing purposes?

You think I'm being ridiculous about this? Well, how about this scenario, which was suggested by one caller to radio here.  Wrigley's Chewing Gum, as you may know, was founded in Chicago back in the 1890s and is now a global brand.  Let's say our President Mary McAleese is on a visit to the U.S. and while she's in Chicago they bring her to the Wrigley plant, unwrap a few sticks for her and suggest she starts chewing for the cameras. It doesn't seem appropriate, does it? 

President Obama appeared to be a more willing victim.  He obviously enjoys a Guinness and more luck to him for that. 

And there was nothing inappropriate in him nipping into the bar in his ancestral village of Moneygall to meet the locals.  The pictures of him relishing his pint of Guinness and holding it aloft have probably gone even further around the world than the shots of the Queen.  

But I wonder if you noticed that the glass he was holding also had the Guinness name on it.  Was that an accident? 

Maybe ... but again, maybe not.  I know that if you go into pubs around Ireland and ask for a pint of Guinness, sometimes you get it in a glass with the Guinness name stamped on it, but far more often it's in a plain glass with no writing on it. 

Given that Obama's visit to Moneygall and to the bar was planned with meticulous care and attention to detail, it seems to me very likely that someone took the decision that when the president asked for pint it would be served to him in a Guinness glass.  

But who?  Whoever took that decision was making sure that when the pictures went around the world, it would be clear exactly what the president was drinking.  

Again, I have no objection to the president enjoying my favorite drink.  But I do have a problem with what appears to be the use of the state visits here by the president and the Queen to benefit a private company. 

There was an element of management and manipulation going on that does little credit to this country.   Being complicit in feeding the international stereotype of drink and the Irish does not do the Irish government any credit either. And besides, Guinness is not the only black stuff, you know.  Ever hear of Murphys?

One last point.  Just 24 hours after President Obama left Ireland, Guinness announced that it was cutting around 400 of its 1,700 jobs here, including a few dozen jobs in promotion and marketing.  

After all the publicity they got during the visits, they probably feel they don't need to spend anything on marketing for a few years.  Why would they bother, when the Irish state helps them to get global publicity for free.

Talk about a bitter aftertaste!