Denis O’Brien extends his media empire - my media mogul story

Denis O'Brien (Laura Hutton/Photocall Ireland)

Back in the early 1990s when I was editing a new weekly section for the Irish Independent called Dubliners I started an annual competition called Dubliner of the Year.  Because of limited budgets in the paper (some things never change) and also to give the competition a wider reach, I got one of the new commercial radio stations involved as a media partner. 

Which is how, a year later, I ended up at a lunch hosted by the lord mayor, the Independent and the radio station, at which the monthly winners of the competition and their families were wined and dined and the Dubliner of the Year was announced.

I don't remember too much about the lunch, except that the monthly winners of the competition, who had been nominated by the readers and listeners, were all true Dubs. 

They included some real characters with great stories to tell, some of  whom were doing fantastic work in their local communities.  Official lunches and award ceremonies can be tedious affairs, but this one was a riot.

Not counting the lord mayor (and no one did), there were to be two speakers at the event, myself on behalf of the paper and a hot young businessman called Denis O'Brien, the boss of the radio station we had got on board.  As the pre-lunch reception was concluding, O'Brien arrived in his limo, wearing an expensive suit and a perma tan, a man in a hurry.

I went over to meet him, but even as we shook hands his eyes were already scanning the room behind me for someone more important.  Failing to see anyone who mattered, he allowed his PR handler to steer him to his place at the top table; he subsequently delivered a bland speech he had clearly not read before, posed for a picture with the winner ... and then he was out of there. 

I remember thinking at the time that it was his loss.  There were some great people in the room, even if they were ordinary Dubs, and the party went on late into the afternoon. 

I was struck at the time by his ruthlessness and time management.   But the next day's paper had the picture of Denis with the winner which, of course, was what his PR team were after.
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----------------- Even then, still in his thirties, he was someone going places fast.  By last week, some 20 years later, he had not only become Ireland's wealthiest businessman (he has been for some time) but he also finally got control of Tony O'Reilly's media empire, Independent News and Media, the publisher of the Irish Independent as well as many other papers. 

He's still ruthless and his time management is still pretty impressive. And he's still a man in a hurry, as we have seen from some of the revelations about his business dealings. 

Now 54, O'Brien is a self-made billionaire, although he did come from a family with good business contacts.

As young hotshots, he and Michael O'Leary got their first break when they were hired by the late Tony Ryan who started the aircraft leasing giant GPA and also Ryanair.   O'Leary now runs Ryanair, of course, but O'Brien soon went off to do his own thing.   

One of his businesses was commercial radio, and by the time I had the above encounter with him he already had several stations.   (His Communicorp company now owns six stations in Ireland, including influential outlets like Newstalk and Today FM, and it also runs more than 30 stations in eight or nine other countries.) 

But it was the cell phone business that really made him.   In the mid-1990s he and some partners applied for and, in spite of being the outsiders in the process which included some very experienced international operators, won Ireland's second mobile phone license. 

It was, as they say, a license to print money.  Before too long he sold his personal share in the venture to British Telecom for over £250 million and went to live in Portugal to avoid paying the £50 million Irish tax that was due on it. 

That £250 million was to be the foundation of everything that followed, the seed capital.   He was soon back in the cell phone business again, setting up Digicel, the cell company that now has operations in the Caribbean, Central America and other regions, with well over 10 million subscribers.  Revenues run to billions of dollars. 

He is also involved in other business areas, like aircraft financing, property, oil, web services, golf courses, and so on.   These days his personal worth is around €3 billion.

But it is his media involvement that put him in the headlines here last week when he swallowed up Independent Newspapers, the media empire run for almost 40 years by Tony O'Reilly and more recently his son Gavin. 

Having ploughed more than half a billion euro into shares in Independent News and Media (INM) in recent years, O'Brien finally got control last week and the young O'Reilly was out. 

To add to all his radio stations, O'Brien now has all INM's papers in Ireland as well as papers in South Africa and Australia.   This makes him a major media player, and in Ireland gives him a dominance that is worrying for two reasons. 

Firstly, there is the big question mark over his financial dealings, and secondly, there are concerns about one person controlling so much of the media here.   

The financial question arises from the findings of the Moriarty Tribunal (one of the judicial inquiries here into corruption) which found that O'Brien gave almost £450,000 directly to Michael Lowry, the minister in the last Fine Gael government in the 1990s whose department was running the competition for the cell phone license which O'Brien eventually won.

O'Brien also guaranteed loans and made other financial arrangements that benefited Lowry around the same time.  It all added up to around £1 million he gave to Lowry (this was before we went on to the euro and is equivalent to almost €1.4 million). 

According to the tribunal, Lowry had an "insidious and pervasive" influence on the competition, and gave O'Brien "substantive information" that helped his consortium win the license. 

Moriarty also found that Lowry "not only influenced, but delivered" the license  to O'Brien. 

Both Lowry and O'Brien have rejected the tribunal report, but there's no sign of them challenging the findings in the High Court.   What it amounts to in plain English is a finding that suggests O'Brien bribed Lowry to give him the cell phone license. 

As I said above, this is critical because it was the foundation on which O'Brien's business empire was
built. The tribunal findings cannot be used in a criminal prosecution because a different standard of proof is used.

Tribunals make findings based on the balance of probability rather than beyond a reasonable doubt.
For that reason, the Gardai (police) have to start from scratch when building a case, even if they have clear pointers from a tribunal report. 

So far, there is no sign of the state bringing corruption charges against O'Brien (or any charges against 95% of the business leaders who got the country into its present mess -- the contrast with what happens to people like Bernard Madoff in the U.S. is striking). 

But the concern over O'Brien's business ethics remains, and many people here believe he should be shunned by the state because of the damning tribunal findings against him.

Which is why there was such a furor in the media here when he was pictured on the balcony of the New York Stock Exchange at the recent bell-ringing ceremony with the Taoiseach (Prime Minister) Enda Kenny. 

Of course it is also true that he provides lots of jobs and is a big donor to lots of charities.   But he is also a tax exile, like the other Irish billionaires who like to lecture us on how to save the Irish economy. 

And does giving to charity and providing jobs mean we should overlook the very serious questions
about his financial past?  

All of  which raises concerns about his suitability as a media mogul in Ireland. He now has effective control of the INM papers in Ireland which include the Irish Independent, Sunday Independent,
Evening Herald, Sunday World, The Star, The Belfast Telegraph and its weekend paper Sunday Life.  INM also has a large stable of local papers across Ireland.
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----------------- Together, this makes INM by far the most dominant player in print in Ireland.  Added to all O'Brien's radio stations here, it will give him an extraordinary level of potential influence in Ireland, to a level that puts Rupert Murdoch in the shade in other markets.

Is this healthy for the Irish media or for Irish democracy?  The answer has to be no.

Even if there were no worries about O'Brien's probity, to allow such dominance of the media in one country seems dangerous, to say the least.  

The government here is now trying to decide what to do about the situation.

Arguments about cross-media ownership are being made by journalists, lawyers and people from many areas of Irish public life.  It has been suggested that a legal cap must be introduced to limit cross-media ownership by one person or company. At present there is no such legal bar, apart from the ordinary competition rules that apply to all industries.   

This story , as they say, will run and run.

The Irish Government - teachers with no class control

Eamon Gilmore and Enda Kenny.

You will remember George Bernard Shaw's famous maxim beloved of students everywhere -- those who can do, those who can't teach.  Here in Ireland a third line is frequently added -- those who can't teach become government ministers.

The Taoiseach (Prime Minister) Enda Kenny, his Minister for Finance Michael Noonan and the Minister for Public Expenditure and Reform Brendan Howlin are all former school teachers.  Two of them (guess!) are former elementary school teachers.  That's worrying enough.

Possibly even more worrying is the CV of the Tanaiste (Deputy Prime Minister) Eamon Gilmore who did psychology in college, became a student leader and then got a job as a trade union organizer.

Having had some experience of the airheads who gravitated to psychology when I was in college, I'm inclined to think that anyone who went that route is probably even less clued into the world of high finance than teachers.   You can decide for yourself.

But these four buckos (two Fine Gael and two Labor) all have one thing in common.  None of them has ever worked a day in his life in the real economy, in a business that had to make a profit to survive.  

Something else they have in common is that together they make up the core of the government sub-committee in charge of getting us through the financial crisis, getting us out of the IMF bailout and getting back our economic sovereignty.  

Other ministers are called in to join this supreme committee as needed, but these four geniuses with their non-existent experience of the real economy are the main men in charge of saving Ireland.   Is it any wonder people here have such little confidence in our future?

What we have learned over the past year from this Fine Gael-Labor government is that they are very good at being sanctimonious about the mess that Fianna Fail made of our economy.  They get all high and mighty and holier than thou about it.  And in the first few months you could not blame them.

Fianna Fail destroyed the country and left the new government in an impossible situation, with the economy carrying an enormous financial burden that may take decades to remove.
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But despite the lousy hand they have been dealt, there comes a time when the new  government has to start taking resolute action.  Now, after more than a year in power, the new government has passed that point.

What we are getting, however, is confusion and weakness.   It turns out that the new government is not so good at actually taking the hard decisions that are necessary to put things right again.

The big challenge, of course, is shifting the portion of the debt burden that is directly attributable to the banking collapse away from the ordinary Irish taxpayer who had little or nothing to do with it.

For the first time a week ago a very senior official of the European Central Bank admitted (perhaps inadvertently) that the reason Ireland has been prevented from burning unguaranteed senior bondholders was not just to protect the reputation of Irish banks, but also the stability of the European banking system.

The ECB is well aware that the European banks that lent money into the Irish boom to get a share of the action are partly to blame for what happened here.  Yet instead of sharing in the cost of the property crash, they are getting all their money back.  And the Irish taxpayer is being forced to carry the enormous bill, with the bailout provided so we can make the payments.

The new government, in spite of all the huffing and puffing, has failed to do anything about this gross injustice.  They have managed to get a portion of the debt pushed down the road, but there is no debt forgiveness or burden sharing involved.

On the biggest issue we face, they have failed.   They are still trying to be the best boys in the European class in the hope that the head teacher in Europe will reward us for good behavior.
Sadly, the real world does not work like that.

Because of the billions being sucked out of the economy each year, taking away from much needed spending on services like health, education and welfare, the debt burden is our number one issue, dwarfing everything else.

But the government has caved in and swallowed the ECB line -- everything must be paid back.
The banking debt is only one half of the problem, however.  The other half of the problem, for which we are entirely to blame ourselves, is the overspending by the state.

We need to get our spending back in line with our revenue.  That's far from easy, since revenue has contracted so much since our property boom turned into bust.  But there is no alternative.

Since they are the ones funding our budget deficit, the IMF, the ECB and the EU (the troika) not only have laid down the schedule for us to cut spending and raise taxes but have suggested ways we should go about it.

Some of this is pretty obvious stuff.  Ireland is one of the few countries in the world which don't have a property tax.  We got rid of local property taxes (called rates) back in the 1970s, and since then local services have been funded from central government, a bill that is now enormous and which the government can't afford.

So the troika told us to introduce a property tax.  If you've read an Irish paper in recent weeks you will know what a mess the government made trying to do this.
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To get the ball rolling, a flat "household charge" was introduced at a modest €100 for all houses.  In future, the charge (or tax) will be progressive so that those living in big houses will pay more.  But the government could not wait until all houses were valued, because the IMF had said to start immediately.

This caused huge resentment, and even though the deadline for payment has passed half the country has still to pay, with a sizable section swearing they will never pay.

This chaos was made worse because the government looked for payment via the internet and failed to make arrangements for all those people who like to pay in cash at the post office (like they pay their TV or dog license). The explanatory publicity campaign about the new tax also was confusing and unconvincing.

This debacle followed another one a few weeks previously that had thousands of people in rural Ireland up in arms.  This happened when the government tried to implement an EU instruction that all septic tanks (unconnected sewage systems) must be inspected to protect ground water quality.

The cost was to be €50.  There was such a revolt on this that the government subsequently dropped the charge to €5.

This week the row is about water charging.  Unlike in most other countries where local councils charge for water, the provision of water here has always been free.

This is counter to EU policy and our EU masters have told us to introduce a charge.  This means that every home in the country has to be fitted with a water meter.

At first we were told that this was going to cost a few hundred euro, to include fitting.  Again there was uproar.

Now we are told the fitting will be free and the payment for the meter may be spread out over a few years. But no one knows.

None of this sounds like a government in control, does it?  If they can't get to grips with the relatively small items like these, how are they ever going to tackle the big issues like the overall debt burden?

The bottom line on all this is that people here, like everywhere else, don't like paying tax.  And we've got bad habits.  To buy votes, politicians here failed to implement property taxes and water charges and now we are out of line with everywhere else.

I don't have to tell you guys in the U.S. about such taxes.  But we don't have to look that far to see what others are doing.  In Britain, for example, local taxes pay for local services and an average size house pays over £200 or £300 a year for water.

The trouble is that so many people here are struggling to pay their bills already that they say they have nothing left to pay these new charges.   A new survey has shown that more than half a million adults here have no money left at the end of the month after paying their essential bills. That's a tough place to be in.

Census 2011- what does the future hold for Ireland?

Taoiseach Enda Kenny and a group of children at a census promotional event last year  

Where is Ireland heading?   What kind of Ireland are we likely to have in the future?  Is it the kind of Ireland we really want?

No one in power here seems to be answering fundamental questions like that.   What's worse, no one who matters seems to be even thinking about questions like that.

Our social scientists and economists make predictions because that's what they are paid to do.  But they have no power and their track record is uneven, to say the least.  

The politicians have power and they make promises.  But given their track record they have even less credibility.

They tell us continually that despite our present difficulties everything will be all right.   Rather than seriously considering the implications of worrying developments in our society, they gloss over any concerns and tell us to work together, be confident and leave the future to them.  Don't worry, be happy.  

The politicians pretend to plan for the future, but it's really all short term.

They're too busy coping with the present to be worrying about the future.  For them, the future is the next election.    

So what does the real future hold for Ireland?  Who has the big picture for 20 or 30 years from now?  No one in authority has a clue where we're heading.

And this stuff is important because, for example, it will influence living standards here,  it will influence retirement, it will influence whether you should be telling your kids to think about living somewhere else.  

It's not just economics and the massive debt burden that is hanging around our necks, although that will play a huge part in our unknown future.   It's also to do with our society in general, the kind of Ireland that is evolving, whether it is what we want, or whether it makes some people feel so alienated they may want to leave.

If it's a waste of time asking politicians about what really lies ahead of us, where do we look?
Well, probably the best advice is to start thinking for yourself.  No one in authority has a clue, so you might as well try to work it out for yourself.

And if you're wondering where to start, one jumping off point is the National Census data which has just been published.   It's the best indicator by far of what Ireland will be like in the future.

We have a census every five years here and the data from the most recent one, Census 2011 (taken in April last year), makes illuminating  reading.

Believe me, you can learn a whole lot more about how Ireland is shaping up by studying the data and thinking about the implications than you can by listening to waffling speeches from Taoiseach (Prime Minister) Enda Kenny or, far worse, President Michael D. Higgins.

Looking at the data for Ireland as it is now is fascinating in itself.  Comparing the data for 2011 with where we were in 2006 when the last census was taken is even more revealing because it shows the way our society is changing, and how quickly.

The information is easy to find on the Internet -- just Google Census 2011 Ireland.  What comes up, as you will see, is the Preliminary Report of Census 2011, giving the main headlines -- more detailed data will be published in subsequent reports later this year.

It also tells you that this report is the first of two summaries of the results of Census 2011. This first one, This Is Ireland - Part 1, looks at overall population change by county; it also examines age, marriage, households and families as well as including first results on nationality, foreign languages, the Irish language, religion and housing.

The second summary report, This Is Ireland - Part 2, (coming in June), will look at other social and economic factors such as employment, occupations, education and skills, as well as health related topics.

The census is fascinating because it's the real deal.  It's the raw data of people's lives, revealing a whole range of behavior and attitude, as well as the numbers on everything from whether we take the bus to work or drive, how many kids we have, what kind of home we live in, how much education we have, what kind of religion we are, and so on. In addition to that, of course,  there are the headline numbers about population, age profile and so on.

Some of the information has to be treated with caution, mind you, because on some issues which are hard to measure specifically, there can be a tendency for people to indulge in a little wishful thinking.  Or maybe in just fooling themselves.

Take, for example, one of the findings in the 2011 Census which revealed that 84% of us are Catholic.  Yeah, right.   If 84% of us were active Catholics you would need a church on every corner.  Instead the church is dying, for reasons we all know about.

So why do so many of us still describe ourselves as Catholic on our census forms when the reality is so different?   Is it because we want to hang on to the Ireland we knew when we were kids, even if it no longer exists?

Another example of this wishful thinking is the census finding that 1.77 million people are able to speak Irish (compared to 1.66 million people in 2006).

This means that nearly half the population is claiming to be able to "speak Irish!”  The reality is that the vast majority of us have great difficulty in putting more than a few words of Irish together, and certainly could not hold a conversation in Irish.

We put our claim to fluency in Irish down on our census forms because, like our declaration of Catholicism, we like to think it's part of what we are.  But it's aspirational, rather than real.  We're fooling ourselves.

It's nonsense, but that did not stop the minister responsible for Irish saying that the census finding on Irish shows what great strides we are making in reviving the language.

Yeah, right.  We're all devout church-going Catholics who are fluent in Irish.

This is amusing, but it should not be taken as evidence that the rest of the census data is unreliable.  Most of the findings are to do with numbers and statistics. They are not as susceptible to wishful thinking or misplaced notions about what it means to be Irish.

The most important number, of course, is population, which has now reached 4.58 million, the highest it's been for well over a century.

Even more striking than the size of the population now is the fact that is has continued to grow strongly since the last census in 2006 when our economic boom was approaching its peak and immigrants were flooding in here.

The peak of the boom was in 2007.  From then on there was a rapid downward spiral as the boom turned into a catastrophic bust, followed by the arrival of the IMF and the loss of our economic sovereignty.

Yet throughout this period -- in the five years between 2006 and 2011 covered by this latest census -- our population continued to grow.  In fact it's up by close to 8%, which is way ahead of the population growth rate in other European countries.

Given that the Irish economy has been on the floor for most of this five year period, you would think that immigration would have stopped and even partly reversed. But not so.

This latest census shows that there are now 544,357 non-nationals living here, which is 12% of the population.  This is an increase of 124,624, or almost 30%, on the census 2006 figure, which is remarkable when you think about it.

It shows that the predicted return of non-nationals who came here for work has not happened even though jobs have been very hard to find here over the past few years.  In fact, although we have an unemployment rate of over 14%, non-nationals are still coming to live here in significant numbers, mainly from Eastern Europe.

But our strong population growth is not just a factor of immigration.  A bigger factor is our high birth rate, although the two are related since most of the young immigrants who arrived over the past five to 10 years are at the right age for starting a family.

One of the interesting facts to emerge from this census is that the biggest non-national group here now is no longer the British (who were always here in high numbers because of our trading ties and because a lot of older Brits like to retire here).

The biggest non-national group here now is the Poles, at 122,585.   The number of Poles here has increased by a staggering 94% over the past five years, even though for most of this time the Irish economy has been collapsing and the Polish economy has been growing.

Despite the ongoing arrival of large numbers of non-nationals to live here over the past five years, the pace of immigration has been slowing down since the economic downturn really started in 2008.   But it's still continuing.

For example, the census data shows that 33,674 foreign nationals moved to Ireland in the four months to April 2011 when the census was taken.  The census people say that this “confirms Ireland as a destination of choice for people from a wide range of countries,” despite the high unemployment and economic difficulties we are having.

The population and immigration statistics raise many questions about where we are going as a country and about the kind of society we will have in 20 or 30 years.

There are obviously big questions about whether ongoing immigration on this scale is a good thing, particularly since the Irish economy is bankrupt and we can no longer afford the very high level of welfare payments that are the norm here. Given that cutbacks are inevitable, should these be targeted in a way that will discourage immigration?

There are many big questions like that to be considered.  But there are smaller questions as well.
For example, this census asked questions about foreign languages and English capability for the first time.

The results were interesting.

Of the  544,357 non-Irish nationals living here now, 514,068 said that they speak a foreign language (presumably their own language) inside their Irish homes.  They were also asked how well they could speak English, and almost 80,000 said not very well, including over 9,000 who did not speak English at all.

Assuming that immigrants indulged in wishful thinking on their census forms like the locals -- and given the fear that many immigrants would have about admitting that their English is not very good -- it is safe to assume that the real situation is considerably worse than this.

That has serious implications about how effectively our schools can work, especially at a time when they are being criticized for falling behind in many areas.

Most schools are already complaining about cutbacks in resources.   Will we have to divert resources in future to English teaching, even though computer skills is still not part of the school curriculum because we can't afford it? How many ICT jobs will we lose in the future as a result?

Census 2011 raises lots of questions.   But you won't hear any answers from our politically correct Irish politicians.

Irish have no time for Fine Gael annual convention

Enda Kenny speaks at the Fine Gael ard fheis last weekend 

The main party in the government here, Fine Gael, had its ard fheis (annual convention) last weekend. It was a jubilant, celebratory affair, as though we were still in the middle of the boom.  

Nobody seemed to find it strange that it was being held in our new National Convention Center, built by one of the biggest developers here who is now bust and owes at least a billion.  Another monument to the boom now owned by all of us.

It was Enda Kenny's first ard fheis as taoiseach (prime minister).  Despite him saying that the convention was not going to be a celebration or a party, the delegates could not help themselves.  

They were grinning from ear to ear, cheering every good line in the speeches.  There was a lot of self-congratulatory backslapping.  The country may be down the toilet, but this is Fine Gael's time to shine and boy, are they enjoying it.

It's hard to blame them.  Fine Gael are in power after decades in the wilderness.  And thanks to the disintegration of Fianna Fail, they look like being there for a long time to come.

That's what is different this time. Yes, Fine Gael have held power in the past but it always seemed to be a blip, a few odd years here and there which were temporary interruptions of the decades of Fianna Fail rule.  The last time Fine Gael was in power was when John Bruton was taoiseach from 1994 to '97.

But now it's their turn to contemplate decades in power. The tables are turned and the roles are reversed.
Fianna Fail, the party that dominated Irish politics for generations, has destroyed itself to such an extent that it could vanish altogether.   Fine Gael is the new Fianna Fail.

That's what underlies the supreme confidence that Kenny exudes these days.

The trouble is that it's completely out of sync with the wasteland he is presiding over.  

Outside the Convention Center hundreds of angry protestors were venting their rage at the new household charge (the start of a property tax system) that is being imposed on every home here.  By the March 31 deadline only half the country had paid up, which shows the level of revolt there is on the issue.  

It's not so much the tax itself, because people here recognize that almost all countries have property taxes.  It's being started as a flat tax at a low level, applied to all houses, although it will be progressive in future and clearly the rates will go up very rapidly in the coming years.  

What's bothering people here is that the money being raised, like so much of the rest of our taxes, is going to pay off the billions in debts of our bust banks.

Of course the government is saying that the money is being ringfenced for local services, but no one believes them. At the end of the day it will go into the same revenue pot, and the payments we have to make on our zombie bank debt and bailout interest come out of that pot, leaving much less for everything else, like local services, schools, hospitals and so on.  

The injustice of what is happening to Ireland is the weak underbelly of the Fine Gael position.  Kenny's relentless positivity is all very well, but people here are not fools.  

They know they are being bled dry to pay for something that was not their fault in the first place.  And the resentment on that is growing all the time.

This resentment will not be lessened by strokes like the carefully timed deal on the Anglo Irish Bank promissory note which was announced last week, just before the Fine Gael convention.

It was presented as some kind of breakthrough.  In fact it's more of the same, loading more debt on to taxpayers.

The situation is that the former Anglo Irish Bank, now a zombie bank being wound up, owes around €30 billion, which is supposed to be paid off over 10 years in annual payments of over €3 billion euro.   The deadline for the first payment was last Saturday, March 31.

The deal the government has done with our European "partners" is a highly complicated one which effectively means we won't have to pay until 2025.

But it does mean that the debt has now been converted into a government bond, which means that the bank debt has been transformed into a state debt which taxpayers here will have to pay back in the future, along with interest charges.

Of course the Anglo debt, like all bank debt here, is state debt, since it was taken on board by the state under the infamous blanket guarantee issued by the last government.   So it could be argued that this new deal does not change the playing field.

But it does because it makes it explicit that this is now state debt, and it undermines the argument that much of this debt should have been written off instead of being loaded on to taxpayers.  

And the former Anglo Irish bank is only part of the problem.  During the boom here Irish banks were unable to raise enough cash from depositors here to fund the lending demand.  So they started borrowing from other banks, mostly in Germany and France.  

I pointed out the statistics in this column recently.  In 2003 foreign borrowing by Irish banks was below €15 billion.  By the time the boom peaked in 2007/08 it was €110 billion, most of it used to fund property speculation here.  

The Irish economy was the toast of Europe at the time and foreign banks wanted a slice of the action. So they shoveled the money into the Irish banks and, even though some economists were already warning that the boom was a bubble, the European Central Bank (ECB) which was supposed to be regulating banking in Europe did not intervene.

It was a gamble by the foreign banks involved, in search of higher profits.  It was incompetence on the part of the ECB.  

When the bubble burst and the Irish government stepped in with the state guarantee to stop our banks going bust the Irish taxpayer was saddled with the debt.

As we now know, the Irish banks claimed at the time that it was just a temporary liquidity problem and that they were solvent.  To be fair to the last government, no one at the time realized the situation was so disastrous.  

No one realized that converting the bank debt into state debt was going to bankrupt the country within a couple of years, drive us into the IMF bailout and rob us of our economic sovereignty. But that is what has happened.

It turned out that the Irish banks were completely insolvent and they owed well over €100 billion which by then had been transferred into a debt carried by the Irish taxpayer.  

Under the normal rules of free enterprise, if you make a poor investment you lose some or even all of your money.  That's what should have happened to the German and French banks and the other financial institutions who pumped money in here during the boom.  But that's not what happened.

To get the bailout money, the IMF and the ECB insisted that Ireland must honor all its debts, including its banking debts.  There could be no default, no debt reduction.   Everything must be paid back in full.
To get the bailout money, the last government agreed with this -- in fact since the IMF/ECB had them over a barrel they had little choice -- and the present government has continued on the same policy path.   Kenny repeated it in his ard fheis address last weekend.

"Let me be clear. I will not throw away the progress we have made in the last year by reneging on our international commitments. Ireland will NOT default."

The progress he was referring to was the interest rate reduction (which we got courtesy of Greece) and the promissory note deal.   Neither do anything to reduce the overall debt burden we face.  They do not affect the big picture.  

The huge debt burden is strangling our national finances because billions have to be diverted every year from services and from productive investment into simply repaying our debt and the interest on it.
That the ordinary Irish taxpayer has to carry this burden is both outrageous and unjust.   Most of the foreign banks that speculated on the Irish property boom sold the debt at a discount to hedge funds and speculators some time ago.  

These funds and speculators have now made a fortune because the bonds involved have been paid back at full face value by the Irish state.  To do so the government here used tens of billions of euro we borrowed from the ECB, via the bailout we got.

And who pays?  The Irish taxpayer, of course, the mug at the end of the line with no power and no voice.  
Our voice is Kenny, who is still trying to justify this arrangement, still trying to convince us all that there is something noble in paying back every last cent in full.

The reason this has been imposed on us by our European "partners" is that they didn't want to undermine other banks in Europe who lent us the money.   That would have destabilized the euro even further.

So Ireland, the willing sacrificial lamb which never protests, was led to the slaughter.   For the sake of the euro and EU stability, Ireland (the Irish taxpayer) was nailed to cross and will bleed there for years until all the debt is paid back.

What should be happening, of course, is that the EU and particularly the ECB should be acknowledging that their failure to control bank lending into the Irish boom was a major factor in what went wrong.

They should be acknowledging that they -- and the European financial institutions which poured money into the Irish boom -- should be sharing in the loss.

The only way this can be done is by a serious level of debt forgiveness or write down.  Kicking the can down the road, like lengthening the deal on the Anglo money, is not sufficient.

Instead of saying repeatedly that Ireland will never default, what our political leaders should be saying is that Ireland will never default as long as we get a get a debt write down that will ease the huge burden on the Irish taxpayer.

After all, the ordinary Irish taxpayer had very little to do with the massive burden of debt that now hangs around the neck of the Irish state like a millstone.

Nor is it convincing for Kenny to say that because the last government signed the Irish state up to the deal, we have to abide by it now.  The last government did so because they did not get the full picture from the Irish banks who either lied about the true position or did not know.  

And who was ultimately responsible for regulating the Irish Central Bank and through it the Irish banks?  The European Central Bank, that's who.

We may be a Catholic country. But it's time we stopped being martyrs.