It's almost beyond belief. Over the weekend it was revealed that the leader of the Catholic Church in Ireland, Cardinal Sean Brady, was deeply implicated in a cover-up of serious sex abuse by a priest.
And not just any priest, but Father Brendan Smyth, the most outrageous child abusing priest this country has ever seen. The Irish Voice featured a front page story a few weeks back about the horrors he inflicted while he was in the U.S.
Brady, who has been telling his fellow bishops here recently that they should resign if they had been part of the cover-up culture in the Catholic Church over the years, has now been revealed as the master of the cover-up himself.
In his defense he is saying it happened 35 years ago, when standards were different, and he is pleading the Nuremberg defense -- he was only following orders. But his position is completely untenable, and the calls for his resignation are now deafening.
He is still saying he will only resign if called on to do so by the Pope. But by the time you read this he may already have gone.
It's the biggest crisis ever to face the Catholic Church here since the sex abuse scandals began to emerge.
Smyth caused the first and certainly the most notorious of the pedophile priest scandals in Ireland. He became famous not only because of the number of children he abused and the severity of the abuse, but also because a seven-month delay in extraditing him to Northern Ireland to face charges there resulted in the collapse of the Fianna Fail-Labor government in 1994.
The infamous case literally brought down the government and also caused a national outcry. The bulging-eyed, crazed face of the unrepentant Smyth was splashed across the media for weeks, and the controversy meant that he became emblematic not only of the depravity within the church, but also of the secrecy which had allowed abusing priests to operate.
And this was the pervert who Brady played a role in protecting almost 20 years earlier. Of all the nauseating priest abusers, Smyth was one of the worst and certainly the most infamous.
In 1975, the then Father Sean Brady was a priest in his 30s, a professor of theology and a rising young man in the church. At time he was also a secretary to the bishop of Kilmore, in whose area Smyth had been abusing.
Brady was sent to interview two of the young people involved. He believed their stories and sent a report to the bishop. He also, as was customary in such situations, got the victims to sign an oath of secrecy.
Having passed the matter up the line, he did nothing else. He did not report the matter to the Gardai (police) even though the story of abuse he heard was likely to have been severe. (Another 10-year-old boy who was abused by Smyth around the same time said this week that the priest was an aggressive pervert who had anally raped him five minutes after meeting him for the first time.)
In spite of the stories he must have heard from the two children, Brady did nothing except write his report for the bishop and wait for the matter to be dealt with internally by the church. The bishop banned Smyth from some priestly duties in his diocese, like hearing confessions.
But further action was left to the abbot of the religious order to which Smyth belonged. Effectively little happened, although even at that time Smyth had been the subject of numerous complaints and had clearly been abusing for a number of years.
Nothing effective was done to stop him and he went on to abuse dozens more children here, in Northern Ireland and in the U.S. over the next 20 years. The prolific offender later admitted a litany of sex attacks on about 90 children in the north and south of Ireland over a 40-year period; he died in jail in 1997.
The problem for the now Cardinal Brady is that if he had stepped outside the church system and canon law for a moment back in 1975 and reported what he had been told to the Gardai, Smyth could have been stopped. Instead Smyth was free to abuse for almost two more decades.
Brady's attempts over the past few days to justify how he acted back then have only made matters worse and have caused outrage among people all over Ireland. He said it was not up to him at the time to try to stop Smyth.
"Yes, I knew that these were crimes, but I did not feel that it was my responsibility to denounce the actions of Brendan Smyth to the police,” he said. "Thirty-five years ago we were in a different world. We had no guidance, we were in uncharted territory.
“Now we have higher standards, thankfully. Certainly I would not act in the same way now as I did then."
If that was an apology, it was half-hearted. What Brady is saying is that he had to do what his bishop at the time told him to do, and he had to follow the canon law system that kept things secret and did not involve the state authorities.
In effect what he is saying is that he had to “follow orders”-- the Nuremberg defense. But the Nuremberg defense did not work for the Nazis on trial, and it certainly won't work in this situation.
Brady was morally bound to sidestep what his superiors were doing and go to the police. But, like almost everyone else in the Catholic Church at the time he failed to do so.
How much that culture of secrecy has changed is also put into question by Brady's actions since then. His involvement with the Smyth cover-up has only come to light now because of an impending High Court case involving one of Smyth's victims. But the case has been coming for over 10 years and was kept quiet.
In this case, Brady is being sued in his personal capacity -- as well as in his role as head of the Catholic Church in Ireland -- by a woman who as a child was raped by Smyth over five years. She was one of those forced to swear an oath that she would not discuss meetings she had with clergy, including the then Father Sean Brady, about her allegations that she was abused by Smyth.
The woman in the case maintains Brady was one of three priests who interviewed her as a teenager, and failed to ensure it was reported to the state authorities. It is understood an affidavit submitted to the High Court accuses Brady of failing to report the formal signed complaints to Gardai, and of failing to take any adequate steps to ensure Smyth did not continue to perpetrate sexual assaults.
Of course, neither Brady nor the church accept that what happened in the Smyth case and in the cases of other abusing priests was a cover-up. They were dealing with it in the way laid down by the Catholic Church at the time, they say.
But the secrecy involved and the failure to involve the state authorities in matters that were criminal does amount to an effective cover-up.
So far, Cardinal Brady says he sees no reason to step down. "Frankly I don't believe that this is a resigning matter," he told reporters at the weekend.
"I insist again I did act and acted effectively in that inquiry (when the children were interviewed) to produce the grounds for removing Father Smyth from ministry."
But removing Smyth "from ministry" was not what was required. What was required was removing him from contact with children and from society, preferably by putting him in jail.
Also indicative of the instinctive secrecy which surrounds all this is the fact that, according to church sources, Brady did not tell Pope Benedict about the impending High Court case during the two days of talks between the Pope and the Irish bishops in the Vatican last month. Which seems odd since he is also saying that he will not resign unless asked to do by the Pope.
But then the Pope has his own problems, since he himself is implicated in the cover-up of child abuse by a priest when he was archbishop of Munich in the late seventies and early eighties. Instead of handing the priest over to the police, the then Archbishop Ratzinger sent the pedophile priest for therapy after he had been accused of forcing an 11-year-old boy to perform oral sex.
The priest was moved around and went on to re-offend, and in 1986 was convicted of child abuse, one of many priests who were involved in child abuse in Germany at the time. The German bishops issued a public apology recently for what had gone on at the time -- and this was a time when the present Pope was a major figure in the Catholic Church in Germany. So maybe he won't be calling for Cardinal Brady's resignation any time soon.
One thing seems clear now. The Catholic Church has lost all credibility and moral authority not just in Ireland but in Rome as well.
Thursday, March 18, 2010
Wednesday, March 10, 2010
Ireland is a country in public sector worker-inspired turmoil
We're a country split down the middle. Our 300,000-plus state workers have now decided to escalate their fight against the pay cuts that have been imposed on them.
Over the last few weeks they have been taking limited action which delayed or curtailed services. But on Monday of this week they agreed to increase pressure on the government by complete work stoppages to take effect on a rolling basis over the next few weeks.
So in the next few weeks schools are likely to close for unscheduled half days, hospitals will have to cut back on treatments and welfare offices will be slower in providing help to the unemployed.
Those are just three examples. But the campaign is likely to be felt right across the range of government services, from the provision of passports to the running of the courts to the gathering of revenue and the payment of grants and state aid.
What it will amount to is open warfare between the government and 300,000 state workers. And caught in the middle will be the rest of the public.
To say there is concern and resentment here about this would be a serious understatement. There is seething rage among the general public already at the state workers for the limited action they have taken so far.
And passports are already a sore point. The passport office workers shut the public counters early last week, which meant that a number of people who were due to travel could not update their passports and were unable to leave the country.
They were on the Liveline phone-in radio show here the next day expressing their outrage at the way they had been treated. The vitriol they heaped on the state workers was shocking.
"I'm so angry I can hardly speak,” one caller said. "These are people with secure jobs and good pay and guaranteed pensions ... I could see them sitting in their back office drinking tea ... They wouldn't do anything to help me. They should all be sacked. They're selfish, out of touch, they don't care about anyone but themselves.”
Caller after caller gave vent to their feelings. There was little or no support for the state workers.
And the rage is likely to be even greater over the next few weeks, as kids are sent home early from schools and patients are sent home early from hospitals and Gardai (police) can't be contacted to respond to the public.
As I said, we're a country split down the middle.
The cause of all this has been analyzed in this column before. Tax revenues have collapsed, the government has run out of money, we can't afford to pay state workers as much as they have been getting.
In fact tax revenues here have now fallen to the 2002 level. But since then, the payroll for state workers has increased by 35%.
So far the government has cut them back by an average of 12% over two budgets. But the state workers won't accept it. They want the government to reverse the cuts and to go on borrowing or increasing taxes so that they can avoid pay cuts now or in the future.
The weakness in their position is that so many people in the private sector -- the real economy where jobs depend on productivity and being able to compete in the global market -- have taken heavy cuts in pay. And in contrast to the guaranteed pensions of state workers, many private sector workers have seen their pensions become worthless as stock markets crashed.
In contrast to the security of the state workers, private sector workers in Ireland are living in fear -- fear of losing their jobs, of not being able to pay the mortgage, of seeing the pensions they have paid into all their lives vanish into thin air.
This fear is making people angry, extremely angry, at the behavior of the state workers who are seen as unaware of how lucky they are and unbelievably greedy.
And on top of all that, the numbers just don't add up. There is somewhere over one million people in jobs in the private sector here (the exact number depends on how many part-timers you include). They have to pay for the 400,000-plus people who are unemployed and the 300,000-plus state workers. As well as paying for everything else.
You don't have to be an economist to see that those numbers don't add up. We have far too many people on the state payroll for a country of our size, and in spite of what the unions say, they cost too much.
In the boom years it didn't matter. But now it's unsustainable.
If the state workers are to have guaranteed pensions they must pay for them at the market rate, which is at least three times what they pay at the moment. And if the pain of the recession is to be shared equally, their pay must be reduced in line with the fall in pay in the private sector, which is the reason tax revenues have declined.
The state workers cannot be a protected elite. They must take their share of the pain that everyone else is feeling.
Yet it is clear that they have no intention of doing so. Their argument is that it is the developers and bankers who caused the crisis, not state workers. They didn't cause the mess, so they are not willing to help clear it up.
The problem with that argument is that the vast majority of private sector workers did not cause the mess either, but they are paying the price because they have no alternative. Unless they are competitive their jobs will go, so they take the cuts.
The only reason the state workers are willing to strike is that they can't be fired and the government can't go out of business. Or so they think.
The government is taking a hard line on the confrontation, saying the cuts announced in December's budget cannot be reversed. The unions are doing the same, announcing their decision to escalate action after a meeting of public sector union leaders on Monday.
The teachers are likely to be first, closing schools early and causing chaos for working parents, even though teachers in Ireland earn 30% more than in Britain and have a shorter school year.
The Frontline Alliance -- the unions representing frontline state workers like nurses, Gardai, fire fighters, prison officers and ambulance personnel -- say they will support whatever decision is taken on further action by the other unions.
Most civil servants here are well paid by international standards. But the state worker unions are making the point strongly that a lot of their members are low paid workers, the junior clerical staff, some of whom earn less than ****30,000 a year.
The weakness of this argument is that many of the 400,000-plus army of unemployed here would be delighted to have a job that pays even that much. It's more than double the minimum wage.
The Civil, Public and Services Union (CPSU), which represents 13,000 lower paid staff, has already given notice of strike action and a four-week ban on overtime. It has warned that it will immediately place pickets on any location if a member is removed from the payroll.
Members of the other big public sector unions are unlikely to pass such pickets, and so the government has to tread carefully or we could be looking at a situation that could spiral into a national shutdown of services.
The inconvenience, annoyance and even suffering this would cause to the general public would be enormous, never mind the damage it would do to the economy and the country's reputation.
Strike action could shut down public offices including welfare, passport, revenue, the courts and even the Dail (Parliament), which is already under pressure due to phone and email disruption, and to civil servants refusing to deal with parliamentary questions and ministerial reports.
To avoid all-out strike action, which would mean they would lose pay, the state workers unions are trying to concentrate on what they call "rolling" action, where services are withdrawn partially or for a few hours at a time by a work to rule and this is repeated over time.
For example, they refuse to answer phones unless this is specifically part of their job. But this kind of sporadic action, with minimal warning, is likely to make the public even angrier.
Another big weakness in the state workers’ case is that before the last budget, when they knew pay cuts were coming, they offered instead to make an equivalent saving by working more efficiently.
The government went ahead and cut their pay because they did not believe the unions would deliver. Now people are asking why state workers are not delivering more productivity anyway, since the unions have already said that is possible, just like private sector workers must constantly deliver to survive.
Last year's cuts in public sector pay were the start of a three-year program of budget rebalancing which will mean the state pay bill has to be reduced even further each year for at least another two years. That will mean there must be further savings from the state workers.
Instead of trying to reverse the pay cut already imposed on them, they should be coming up with efficiencies to deliver more savings and avoid further pay cuts in the future. They can't change what has happened, and causing disruption is not going to make any difference.
They are in this mess with the rest of us. If they don't learn to accept that it could get very ugly here, like in Greece.
At the moment we're split down the middle, but so far it's only a war of words. We don't want to get to the stage where the two sides start fighting each other on the streets.
Tuesday, March 2, 2010
Ireland is full of zombie hotels and zombie banks
The National Asset Management Agency (Nama) scheme to rescue the Irish banking system from collapse was approved by the European Commission last week, much to the relief of the government. All the signs now are that Nama will start buying in billions in bad property loans from the banks within the next few weeks.
Whether that's good or bad depends on how you look at it. It's certainly the most important thing to happen in the Irish economy in years, possibly ever.
But it's also extremely boring, which is why most people here glaze over whenever Nama is mentioned.
Readers of this column possibly feel the same way, so before we get into the heavy stuff, let's take a detour into a related issue, Ireland's zombie hotels.
The problem of our zombie hotels was big news here over the past few days, and it should be of interest to anyone thinking of coming here on vacation this year. Ireland's real hotel owners say that the zombie hotels have cut prices so low that they are being driven out of business.
When the Celtic Tiger madness was at its height, developers here built a lot of new hotels in Dublin and all over the country because they were encouraged to do so by the generous tax breaks that were available to investors.
Basically, you could write off a lot of your income tax by investing in one of these hotels, and so people piled into them without worrying too much about whether they were viable or not. The driving force was the tax breaks, not real demand from the tourist and home holiday markets.
The government's attitude was that we needed to develop tourism as much as possible. Build the new hotels and the tourists will come, was the cry.
Well, they built them and the tourists didn't come (or not enough of them), and the result is that we now have around 100 big hotels here, more than we need. The industry says that even allowing for normal tourism growth, there is over capacity of about 15,000 hotel rooms.
Many of the developers behind these hotels have gone bust, owing millions to the banks. Which means that the banks now effectively own the hotels.
They can't sell them. And they can't close them, because that would mean writing down their value by about 50%, which would not be a good thing to do before Nama buys in the associated loans. It would mean that Nama would pay the banks even less for the loans.
So the banks keep these zombie hotels open by undercutting room prices to a level that other hotels can't match. The most high profile case of zombie hotels is the D4 pair of adjoining hotels in Ballsbridge in Dublin, formerly Jurys and the Berkeley Court, two of the most exclusive hotels in the city.
They are slightly different because they are not new, but the problem is the same. Last week you could get a room in one of these hotels for €25 a night per person sharing; a few years ago a room for two would have cost over €200.
What's happened in the meantime is that one of the country's biggest developers spent a few hundred million buying the two adjoining hotels to knock them down and build a sort of mini-Manhattan on the site. He didn't get planning permission, the market collapsed and he's now more or less bust.
The banks own the hotels and they are running them at a loss. But, from their point of view, that's better than closing them down.
The same thing is happening on a wide scale around the country. The problem for the rest of the hotel industry here is that they can't compete.
They are appealing to the government to do something about the unfair competition. But so far nothing has been done to help them.
The real hotels -- as opposed to the zombie hotels, which the banks are keeping open even though they are being run at a loss -- face other problems as well at the moment. The international recession has hit tourism hard.
And in our case it's made even worse by the decline of the U.K. pound and the U.S. dollar against the euro which makes us more expensive for those tourists. To keep the foreign business, hotels here have absorbed the currency fall, further eating into their profits.
From the tourist's point of view, it means there is fantastic value to be had in the Irish hotel market this year. So if you're thinking of coming this could be the year.
All of this is just one example of how unpredictable and complicated the effects of the Nama scheme will be. A lot of people here are now questioning whether it makes sense at all. The government is insisting that the Irish banks must be saved and that there is no alternative.
But the costs involved are astronomical and the outcome is far from certain. The total loan books of the Irish banks add up to around €370 billion euro.
This was financed from deposits in the banks of €170 billion and an extra €200 billion that the banks borrowed so they could lend more.
And it is that €200 billion that has put our banks in such jeopardy. Like the hotels they now own, our banks are zombies as well, only existing because the government is underwriting them.
It's important to keep that bigger picture in mind, because it shows that the ***80 billion of bad property loans Nama is buying from the banks at a discount only solves part of their problem. The worst part, but only a part.
There has been a lot of speculation about the discount that Nama will apply to the €80 billion in loans it is buying. We may get some idea when they buy in the ***17 billion in loans owed by the country's top 10 developers which is due to happen very soon.
Up to now the discount suggested by the government has been put at 30% or 35%. But a site outside Athlone -- the big town in the center of the country -- has made people think again. The value of this land, bought for a development that never happened, has fallen by 98% from ***31 million to €600,000.
And this echoes the view of one of the most respected judges in the Commercial Court here who has said that his experience dealing with such cases in the court over the past year was that land prices have fallen by more than 80% -- in other words they have gone back to farmland values.
More than half of the property loans that Nama is buying are for sites or unfinished developments, so that puts a big question mark over the suggested 30% discount.
What all this means is that, unless unrealistic values are put on the property assets being bought, the government will end up having to pump in even more money into the banks and will end up owning all of them. The Irish banks will be bust or will be nationalized. There's no other way.
There is a growing view here that a simpler way out of this mess than the Nama route would have been to let the Irish banks go belly-up and let them be taken over by some of the big international banks.
The international bond holders who lent the Irish banks the ***200 billion would have been destroyed, which would not have done our reputation much good, but these guys took the risk. They should be paying the price, not the Irish taxpayer, who will be carrying the can for decades.
Making the outlook even more grim for our banks is the rest of their ***370 billion loanbooks. It's not as compromised as the ***80 billion in property loans, but there's an awful lot of it and businesses are going bust here every day. So the bad property loans are not the only problem.
All of this would give you a bad headache. Thankfully, the perfect solution is available -- a midweek break for two in a luxury zombie hotel down the country for the price of a few pizzas.
Either that or you can move into a zombie hotel in Dublin and live there for less than you would pay in rent for a city center apartment. It's not all bad!
Whether that's good or bad depends on how you look at it. It's certainly the most important thing to happen in the Irish economy in years, possibly ever.
But it's also extremely boring, which is why most people here glaze over whenever Nama is mentioned.
Readers of this column possibly feel the same way, so before we get into the heavy stuff, let's take a detour into a related issue, Ireland's zombie hotels.
The problem of our zombie hotels was big news here over the past few days, and it should be of interest to anyone thinking of coming here on vacation this year. Ireland's real hotel owners say that the zombie hotels have cut prices so low that they are being driven out of business.
When the Celtic Tiger madness was at its height, developers here built a lot of new hotels in Dublin and all over the country because they were encouraged to do so by the generous tax breaks that were available to investors.
Basically, you could write off a lot of your income tax by investing in one of these hotels, and so people piled into them without worrying too much about whether they were viable or not. The driving force was the tax breaks, not real demand from the tourist and home holiday markets.
The government's attitude was that we needed to develop tourism as much as possible. Build the new hotels and the tourists will come, was the cry.
Well, they built them and the tourists didn't come (or not enough of them), and the result is that we now have around 100 big hotels here, more than we need. The industry says that even allowing for normal tourism growth, there is over capacity of about 15,000 hotel rooms.
Many of the developers behind these hotels have gone bust, owing millions to the banks. Which means that the banks now effectively own the hotels.
They can't sell them. And they can't close them, because that would mean writing down their value by about 50%, which would not be a good thing to do before Nama buys in the associated loans. It would mean that Nama would pay the banks even less for the loans.
So the banks keep these zombie hotels open by undercutting room prices to a level that other hotels can't match. The most high profile case of zombie hotels is the D4 pair of adjoining hotels in Ballsbridge in Dublin, formerly Jurys and the Berkeley Court, two of the most exclusive hotels in the city.
They are slightly different because they are not new, but the problem is the same. Last week you could get a room in one of these hotels for €25 a night per person sharing; a few years ago a room for two would have cost over €200.
What's happened in the meantime is that one of the country's biggest developers spent a few hundred million buying the two adjoining hotels to knock them down and build a sort of mini-Manhattan on the site. He didn't get planning permission, the market collapsed and he's now more or less bust.
The banks own the hotels and they are running them at a loss. But, from their point of view, that's better than closing them down.
The same thing is happening on a wide scale around the country. The problem for the rest of the hotel industry here is that they can't compete.
They are appealing to the government to do something about the unfair competition. But so far nothing has been done to help them.
The real hotels -- as opposed to the zombie hotels, which the banks are keeping open even though they are being run at a loss -- face other problems as well at the moment. The international recession has hit tourism hard.
And in our case it's made even worse by the decline of the U.K. pound and the U.S. dollar against the euro which makes us more expensive for those tourists. To keep the foreign business, hotels here have absorbed the currency fall, further eating into their profits.
From the tourist's point of view, it means there is fantastic value to be had in the Irish hotel market this year. So if you're thinking of coming this could be the year.
All of this is just one example of how unpredictable and complicated the effects of the Nama scheme will be. A lot of people here are now questioning whether it makes sense at all. The government is insisting that the Irish banks must be saved and that there is no alternative.
But the costs involved are astronomical and the outcome is far from certain. The total loan books of the Irish banks add up to around €370 billion euro.
This was financed from deposits in the banks of €170 billion and an extra €200 billion that the banks borrowed so they could lend more.
And it is that €200 billion that has put our banks in such jeopardy. Like the hotels they now own, our banks are zombies as well, only existing because the government is underwriting them.
It's important to keep that bigger picture in mind, because it shows that the ***80 billion of bad property loans Nama is buying from the banks at a discount only solves part of their problem. The worst part, but only a part.
There has been a lot of speculation about the discount that Nama will apply to the €80 billion in loans it is buying. We may get some idea when they buy in the ***17 billion in loans owed by the country's top 10 developers which is due to happen very soon.
Up to now the discount suggested by the government has been put at 30% or 35%. But a site outside Athlone -- the big town in the center of the country -- has made people think again. The value of this land, bought for a development that never happened, has fallen by 98% from ***31 million to €600,000.
And this echoes the view of one of the most respected judges in the Commercial Court here who has said that his experience dealing with such cases in the court over the past year was that land prices have fallen by more than 80% -- in other words they have gone back to farmland values.
More than half of the property loans that Nama is buying are for sites or unfinished developments, so that puts a big question mark over the suggested 30% discount.
What all this means is that, unless unrealistic values are put on the property assets being bought, the government will end up having to pump in even more money into the banks and will end up owning all of them. The Irish banks will be bust or will be nationalized. There's no other way.
There is a growing view here that a simpler way out of this mess than the Nama route would have been to let the Irish banks go belly-up and let them be taken over by some of the big international banks.
The international bond holders who lent the Irish banks the ***200 billion would have been destroyed, which would not have done our reputation much good, but these guys took the risk. They should be paying the price, not the Irish taxpayer, who will be carrying the can for decades.
Making the outlook even more grim for our banks is the rest of their ***370 billion loanbooks. It's not as compromised as the ***80 billion in property loans, but there's an awful lot of it and businesses are going bust here every day. So the bad property loans are not the only problem.
All of this would give you a bad headache. Thankfully, the perfect solution is available -- a midweek break for two in a luxury zombie hotel down the country for the price of a few pizzas.
Either that or you can move into a zombie hotel in Dublin and live there for less than you would pay in rent for a city center apartment. It's not all bad!
Wednesday, February 24, 2010
It's time to stop the ring-kissing of Catholic bishops in Ireland
The picture of the Irish bishops gathered in conclave with the Pope in the Vatican just over a week ago summed up what is wrong with the Catholic Church, not just in Ireland but in Rome as well.
There they all were, a large group of elderly male celibates in white dresses smiling grimly for the cameras before they began their two-day discussion on sexuality and abuse.
What's wrong with the picture? Well, for a start there's not a woman in sight.
Nor are there any psychoanalysts or psychiatrists or psychologists or even an alternative therapist or two. Nor are there any ordinary adults who might be able to offer a real opinion on sexuality, speaking from the experience of a normal, well-adjusted person with an active sex life.
Nor are there any parents of abused children. Or even any victims -- adults who were abused by priests when they were kids (and let's face it, there's no shortage of those).
In fact there was no one at all in the room who might have been able to offer a worthwhile view on sexuality and how it emerged in such a perverted form among so many Catholic priests in Ireland, wreaking devastation on so many lives over decades.
Even more telling than the picture of the Irish bishops sitting down for their conference with the Pope was the TV news film we saw here the night before which showed the bishops shortly after they had arrived inside the Vatican.
All decked out in their expensive robes and crosses, they formed a long line and shuffled forward one by one like penitents to kiss the Pope's ring, sinking half way to their knees to do so.
The body language was all squirming embarrassment, mixed with a little preening pride. After all, this was the big time for them, like Oscar night, even if the circumstances were a little uncomfortable.
The Pope had a fixed smile on his face as he greeted them one by one, his cold eyes assessing the miserable creatures who had presided over a system which had brought him so much trouble. It looked like scenes from The Godfather and The Da Vinci Code somehow had got mixed up.
The Goodfellas were lined up to pay homage to the Don, all in their elaborate costumes inside the Vatican. The air was heavy with guilt and foreboding.
Kissing the Pope's ring? That self-abasing ritual sends out completely the wrong message when what these guys should be doing is trying to make the church more relevant in the modern world.
What this Pope needs is sound advice from a wide variety of people, clerical and lay, male and female. What he doesn't need is a roomful of Irish bishops going through the traditional motions.
It's time to dump this kissing of the Pope's ring. And it's way past time to dump the bit where ordinary people fall to their knees to kiss their bishop's ring.
What's all that about, anyway? I don't remember Jesus Christ having a ring and expecting everyone to fall down and kiss it.
As for what a roomful of aging celibates could possibly know about sexuality, your guess is as good as mine. It's worth remembering that most of Christ's 12apostles were married men, and that compulsory celibacy was an invention of the church that came over 1,000 years later, after centuries of married priests and even married Popes.
It was the worst decision the Catholic Church ever made, and the present problems about sexuality stem from that disastrous change.
Celibacy may work for some, but for many others it doesn't. If you take the Freudian view, repressed sexuality will always find a way out, frequently in undesirable ways. Add to that the system that sent young boys from all male schools into all male seminaries and you have a recipe for arrested sexual development and release that puts children at risk.
But the Catholic Church refuses to recognize this. Instead of accepting that the abuse is a consequence of the church's attitude to sexuality, the church sees it as wrongdoing by aberrant priests.
So in Ireland we have had denial, cover-up and abusing priests being moved by bishops from one parish to another when complaints were made. We have had decades of abuse by dozens of priests all over the country.
The appalling saga of abuse was revealed not because of anything the church did but because of the courage of the victims and the judicial inquiries set up by the state. The failure of the Irish bishops, past and some present, which was revealed in the report on the Dublin area, was the immediate reason they had all been summoned to Rome.
The victims -- who were not invited to the meeting -- were hoping for a full apology from the Pope, for an acceptance of some responsibility by the Pope and for a recognition of the trauma they had suffered. What they got was the same old waffle, relayed by the Irish bishops after the two-day meeting.
The Pope put what had happened in Ireland down to "a weakening of faith." If the priests involved had been stronger in their faith they would never have done such terrible things. He also said that "the lack of respect for the human person" in society was one of the causes.
This lame response and the failure to offer an adequate apology angered abuse victims here. They are also angry because the Pope failed to take any responsibility for what happened in the Dublin diocese even in recent decades.
This is significant because it was the Pope, then Cardinal Ratzinger, who as prefect of the all-powerful church committee the Congregation for the Doctrine of the Faith, had been Rome's top man for dealing with this stuff since 1981. All cases of abuse worldwide had to be referred to him.
To suggest that he did not know what was happening in Ireland and how the Irish bishops were dealing with it is nonsense. He was part of the culture of cover-up within the church for years.
So there is every reason to think that the Pope is as culpable as the Irish bishops who moved abusing priests around. If he didn't know, he should have known. That was his job.
But getting him to admit that either he or Rome was at fault was never going to happen, because that would open the Vatican to a legal challenge from Irish abuse victims. Any admission of the Vatican's culpability in its directives to bishops on the reporting of abuse complaints could open the floodgates to massive compensation claims.
One particularly nasty suggestion to emerge from Rome over the past week was that the abuse was a peculiarly Irish problem. Given the worrying number of Irish religious who have been involved in abuse in other countries, like the U.S. and Australia, that might seem to have some validity.
But the fundamental problem is not where the abusing clergy are from. It's the warped attitude to sexuality the church has given them.
The truth is that abuse has emerged among priests and brothers in many countries. For example, this weekend the bishops in Germany -- home of the present Pope -- got together for a major press conference to make a public apology for abuse that happened there.
The Pope is due to issue a special message to Irish Catholics within a few weeks. But since he would not agree to allow any of the victims to attend the meeting in Rome, no one is expecting much.
Irish Catholics don't need any empty messages. Words are cheap.
What the Catholic Church needs to do urgently is end celibacy, start ordaining women, allow contraception and generally change its attitude to human sexuality.
Until the church starts treating human sexuality as something healthy and wonderful to be enjoyed and celebrated instead of something dirty and furtive to be denied and hidden, the problem is never going to go away. Either in Ireland or anywhere else.
It's time to get back to the message of Jesus and get rid of all the pomp and ceremony, particularly the ring kissing.
There they all were, a large group of elderly male celibates in white dresses smiling grimly for the cameras before they began their two-day discussion on sexuality and abuse.
What's wrong with the picture? Well, for a start there's not a woman in sight.
Nor are there any psychoanalysts or psychiatrists or psychologists or even an alternative therapist or two. Nor are there any ordinary adults who might be able to offer a real opinion on sexuality, speaking from the experience of a normal, well-adjusted person with an active sex life.
Nor are there any parents of abused children. Or even any victims -- adults who were abused by priests when they were kids (and let's face it, there's no shortage of those).
In fact there was no one at all in the room who might have been able to offer a worthwhile view on sexuality and how it emerged in such a perverted form among so many Catholic priests in Ireland, wreaking devastation on so many lives over decades.
Even more telling than the picture of the Irish bishops sitting down for their conference with the Pope was the TV news film we saw here the night before which showed the bishops shortly after they had arrived inside the Vatican.
All decked out in their expensive robes and crosses, they formed a long line and shuffled forward one by one like penitents to kiss the Pope's ring, sinking half way to their knees to do so.
The body language was all squirming embarrassment, mixed with a little preening pride. After all, this was the big time for them, like Oscar night, even if the circumstances were a little uncomfortable.
The Pope had a fixed smile on his face as he greeted them one by one, his cold eyes assessing the miserable creatures who had presided over a system which had brought him so much trouble. It looked like scenes from The Godfather and The Da Vinci Code somehow had got mixed up.
The Goodfellas were lined up to pay homage to the Don, all in their elaborate costumes inside the Vatican. The air was heavy with guilt and foreboding.
Kissing the Pope's ring? That self-abasing ritual sends out completely the wrong message when what these guys should be doing is trying to make the church more relevant in the modern world.
What this Pope needs is sound advice from a wide variety of people, clerical and lay, male and female. What he doesn't need is a roomful of Irish bishops going through the traditional motions.
It's time to dump this kissing of the Pope's ring. And it's way past time to dump the bit where ordinary people fall to their knees to kiss their bishop's ring.
What's all that about, anyway? I don't remember Jesus Christ having a ring and expecting everyone to fall down and kiss it.
As for what a roomful of aging celibates could possibly know about sexuality, your guess is as good as mine. It's worth remembering that most of Christ's 12apostles were married men, and that compulsory celibacy was an invention of the church that came over 1,000 years later, after centuries of married priests and even married Popes.
It was the worst decision the Catholic Church ever made, and the present problems about sexuality stem from that disastrous change.
Celibacy may work for some, but for many others it doesn't. If you take the Freudian view, repressed sexuality will always find a way out, frequently in undesirable ways. Add to that the system that sent young boys from all male schools into all male seminaries and you have a recipe for arrested sexual development and release that puts children at risk.
But the Catholic Church refuses to recognize this. Instead of accepting that the abuse is a consequence of the church's attitude to sexuality, the church sees it as wrongdoing by aberrant priests.
So in Ireland we have had denial, cover-up and abusing priests being moved by bishops from one parish to another when complaints were made. We have had decades of abuse by dozens of priests all over the country.
The appalling saga of abuse was revealed not because of anything the church did but because of the courage of the victims and the judicial inquiries set up by the state. The failure of the Irish bishops, past and some present, which was revealed in the report on the Dublin area, was the immediate reason they had all been summoned to Rome.
The victims -- who were not invited to the meeting -- were hoping for a full apology from the Pope, for an acceptance of some responsibility by the Pope and for a recognition of the trauma they had suffered. What they got was the same old waffle, relayed by the Irish bishops after the two-day meeting.
The Pope put what had happened in Ireland down to "a weakening of faith." If the priests involved had been stronger in their faith they would never have done such terrible things. He also said that "the lack of respect for the human person" in society was one of the causes.
This lame response and the failure to offer an adequate apology angered abuse victims here. They are also angry because the Pope failed to take any responsibility for what happened in the Dublin diocese even in recent decades.
This is significant because it was the Pope, then Cardinal Ratzinger, who as prefect of the all-powerful church committee the Congregation for the Doctrine of the Faith, had been Rome's top man for dealing with this stuff since 1981. All cases of abuse worldwide had to be referred to him.
To suggest that he did not know what was happening in Ireland and how the Irish bishops were dealing with it is nonsense. He was part of the culture of cover-up within the church for years.
So there is every reason to think that the Pope is as culpable as the Irish bishops who moved abusing priests around. If he didn't know, he should have known. That was his job.
But getting him to admit that either he or Rome was at fault was never going to happen, because that would open the Vatican to a legal challenge from Irish abuse victims. Any admission of the Vatican's culpability in its directives to bishops on the reporting of abuse complaints could open the floodgates to massive compensation claims.
One particularly nasty suggestion to emerge from Rome over the past week was that the abuse was a peculiarly Irish problem. Given the worrying number of Irish religious who have been involved in abuse in other countries, like the U.S. and Australia, that might seem to have some validity.
But the fundamental problem is not where the abusing clergy are from. It's the warped attitude to sexuality the church has given them.
The truth is that abuse has emerged among priests and brothers in many countries. For example, this weekend the bishops in Germany -- home of the present Pope -- got together for a major press conference to make a public apology for abuse that happened there.
The Pope is due to issue a special message to Irish Catholics within a few weeks. But since he would not agree to allow any of the victims to attend the meeting in Rome, no one is expecting much.
Irish Catholics don't need any empty messages. Words are cheap.
What the Catholic Church needs to do urgently is end celibacy, start ordaining women, allow contraception and generally change its attitude to human sexuality.
Until the church starts treating human sexuality as something healthy and wonderful to be enjoyed and celebrated instead of something dirty and furtive to be denied and hidden, the problem is never going to go away. Either in Ireland or anywhere else.
It's time to get back to the message of Jesus and get rid of all the pomp and ceremony, particularly the ring kissing.
Wednesday, February 17, 2010
Only for Irish government spending cuts, it would be a Greek tragedy
If you were reading your world news last week you will know that the European Union leaders came to the rescue of Greece. The Greek economy is in crisis, it has a massive budget deficit, the country is at the limit of its borrowing ability, and without EU backing it would go belly-up.
Sound familiar? There but for the Grace of God and the spending cuts goes Ireland.
Taoiseach (Prime Minister) Brian Cowen said as much last week after the EU summit. Greece needs to follow Ireland's example in getting its state spending under control. They have to cut their deficit.
Tell that to the militant unions in Greece, which make the Irish trade unions look like sheep. They brought Greece to a standstill last week, shutting the airports and filling the streets with protests. They want higher taxes on the rich and even more state borrowing to protect their lifestyle, even though the country can't pay its way.
The reason the EU leaders intervened is because the big Greek economic mess is destabilizing the euro. The euro has sunk in value against the dollar in recent weeks, and the international money markets are becoming more nervous not just about Greece but about some of the weaker countries in Europe, including us.
In official European circles, the group of problem countries in question is called the PIGS -- Portugal, Ireland, Greece and Spain. And make no mistake about it, even though the sense of crisis in the Irish economy has abated in the media here in recent weeks, the fact is we are just as deep in the smelly stuff as we have been for the past two years.
The soft guarantee given by the EU leaders to the markets last week about Greece has given the Greeks some time and breathing space to get their act together. But there is a lot more belt-tightening to come over the next few years -- for them and for us -- before we will all come through this recession.
So Cowen's suggestion last week that Greece should follow the Irish example caused a few sniggers here. I'm not sure following Ireland's example is what anyone should do, given how we messed up our economy and our current snail's pace towards putting it right.
There is still no real sense of urgency here, either in government circles or in the media. For the past week, for example, Irish TV news and newspapers have been saturated with coverage of the resignation of George Lee from Fine Gael, the main opposition party.
Lee is a former RTE economics correspondent with a big profile who gave up his job to join Fine Gael and help save the country. Or so he thought.
Some of the senior Fine Gael people, while they were glad to have him as a vote getter, did not share his high opinion of himself as the national Messiah. He felt ignored and, in what looked like a fit of pique, he resigned from the party and the Dail (Parliament) last week after less than a year in politics.
This storm in a tea cup was interpreted as a failure on the part of Fine Gael leader Enda Kenny, and it became a huge national story which went on for days. The truth is that Lee's resignation is of little national significance.
What was of real significance here last week was the revelation that a senior International Monetary Fund (IMF) official, an American economics expert called Steven Seelig, had told the Irish Minister for Finance Brian Lenihan in April last year that the IMF did not believe that NAMA would result in a significant increase in bank lending in Ireland.
This was a real bombshell. You will remember that the National Asset Management Agency (NAMA) was set up by the government here to buy the bad property loans from the Irish banks to stop them going bust. It was going to cost billions, and it was justified on the basis that if we bought the bad loans and also put enough billions in new capital into the banks (so far we have put in ****11 billion) this would get the banks lending to businesses again and get the Irish economy going again.
Now we learn that the IMF representative who came to Dublin last year told the government that, while NAMA might save the Irish banks, the IMF did not believe it would get credit flowing here again. This revelation, which emerged under a Freedom of Information request, was really shocking, implying that the government's strategy was wrong then and is still wrong.
Even before this revelation, a lot of people here were getting very disenchanted with NAMA. It's way behind schedule -- the billions in loans from the top 10 developers were due to be transferred out of the banks in December but that is still a month or two away, at least.
NAMA is operational and the valuation work is proceeding. But there is still a lot of uncertainty about the value of the property involved in the loans and the discount that is to be applied when NAMA takes them on. The original estimate by Lenihan of an average 30% discount now seems to be too optimistic, and the valuations coming in from the experts are much lower than 70% of the original price.
This has major implications for Irish taxpayer. On the one hand it increases the chances that when NAMA eventually sells the properties back into the market in 10 or more years, it may not make a loss.
On the other hand, it means that there will be such a big hole in the books of the banks right now that the government will have to pump billions more in to recapitalize them. Already the Irish taxpayer has underwritten ****11 billion in funding and another ***15 or even ****20 billion might be needed to keep the banks here afloat.
Last week the ratings agency Standard & Poors estimated that the cost of Ireland's bailout would be as high as ***25 billion, and other estimates have been even higher. What this means is that the government will effectively be nationalizing the banks, which is something it has always said it wanted to avoid.
But it seems likely that the amount of capital that will have to be put into the big two banks here, AIB and Bank of Ireland, will mean that the taxpayer will end up owning as much as 80% of both banks.
Welcome to Communist Ireland, you may think. And it's true that nationalizing the Irish banks, however reluctantly, would cause all kinds of problems in the future. But as far as I'm concerned, it's still better that than paying way too much for the property assets coming into NAMA.
I don't mind being a taxpayer shareholder in the Irish banks. Maybe I will get some money out of it in the long run, or maybe my kids will. And maybe they will also get something back when NAMA sells all those properties after holding on to them for years.
There is another big plus in nationalizing our banks, one that could even please the IMF, an organization that is not a big fan of state ownership. If the government is in ultimate control, it can dictate bank policy and make lending to businesses happen again. Everybody wins!
Except the existing shareholders, of course. But then they have already lost almost everything.
It's a tough world these days, especially for the PIGS.
Sound familiar? There but for the Grace of God and the spending cuts goes Ireland.
Taoiseach (Prime Minister) Brian Cowen said as much last week after the EU summit. Greece needs to follow Ireland's example in getting its state spending under control. They have to cut their deficit.
Tell that to the militant unions in Greece, which make the Irish trade unions look like sheep. They brought Greece to a standstill last week, shutting the airports and filling the streets with protests. They want higher taxes on the rich and even more state borrowing to protect their lifestyle, even though the country can't pay its way.
The reason the EU leaders intervened is because the big Greek economic mess is destabilizing the euro. The euro has sunk in value against the dollar in recent weeks, and the international money markets are becoming more nervous not just about Greece but about some of the weaker countries in Europe, including us.
In official European circles, the group of problem countries in question is called the PIGS -- Portugal, Ireland, Greece and Spain. And make no mistake about it, even though the sense of crisis in the Irish economy has abated in the media here in recent weeks, the fact is we are just as deep in the smelly stuff as we have been for the past two years.
The soft guarantee given by the EU leaders to the markets last week about Greece has given the Greeks some time and breathing space to get their act together. But there is a lot more belt-tightening to come over the next few years -- for them and for us -- before we will all come through this recession.
So Cowen's suggestion last week that Greece should follow the Irish example caused a few sniggers here. I'm not sure following Ireland's example is what anyone should do, given how we messed up our economy and our current snail's pace towards putting it right.
There is still no real sense of urgency here, either in government circles or in the media. For the past week, for example, Irish TV news and newspapers have been saturated with coverage of the resignation of George Lee from Fine Gael, the main opposition party.
Lee is a former RTE economics correspondent with a big profile who gave up his job to join Fine Gael and help save the country. Or so he thought.
Some of the senior Fine Gael people, while they were glad to have him as a vote getter, did not share his high opinion of himself as the national Messiah. He felt ignored and, in what looked like a fit of pique, he resigned from the party and the Dail (Parliament) last week after less than a year in politics.
This storm in a tea cup was interpreted as a failure on the part of Fine Gael leader Enda Kenny, and it became a huge national story which went on for days. The truth is that Lee's resignation is of little national significance.
What was of real significance here last week was the revelation that a senior International Monetary Fund (IMF) official, an American economics expert called Steven Seelig, had told the Irish Minister for Finance Brian Lenihan in April last year that the IMF did not believe that NAMA would result in a significant increase in bank lending in Ireland.
This was a real bombshell. You will remember that the National Asset Management Agency (NAMA) was set up by the government here to buy the bad property loans from the Irish banks to stop them going bust. It was going to cost billions, and it was justified on the basis that if we bought the bad loans and also put enough billions in new capital into the banks (so far we have put in ****11 billion) this would get the banks lending to businesses again and get the Irish economy going again.
Now we learn that the IMF representative who came to Dublin last year told the government that, while NAMA might save the Irish banks, the IMF did not believe it would get credit flowing here again. This revelation, which emerged under a Freedom of Information request, was really shocking, implying that the government's strategy was wrong then and is still wrong.
Even before this revelation, a lot of people here were getting very disenchanted with NAMA. It's way behind schedule -- the billions in loans from the top 10 developers were due to be transferred out of the banks in December but that is still a month or two away, at least.
NAMA is operational and the valuation work is proceeding. But there is still a lot of uncertainty about the value of the property involved in the loans and the discount that is to be applied when NAMA takes them on. The original estimate by Lenihan of an average 30% discount now seems to be too optimistic, and the valuations coming in from the experts are much lower than 70% of the original price.
This has major implications for Irish taxpayer. On the one hand it increases the chances that when NAMA eventually sells the properties back into the market in 10 or more years, it may not make a loss.
On the other hand, it means that there will be such a big hole in the books of the banks right now that the government will have to pump billions more in to recapitalize them. Already the Irish taxpayer has underwritten ****11 billion in funding and another ***15 or even ****20 billion might be needed to keep the banks here afloat.
Last week the ratings agency Standard & Poors estimated that the cost of Ireland's bailout would be as high as ***25 billion, and other estimates have been even higher. What this means is that the government will effectively be nationalizing the banks, which is something it has always said it wanted to avoid.
But it seems likely that the amount of capital that will have to be put into the big two banks here, AIB and Bank of Ireland, will mean that the taxpayer will end up owning as much as 80% of both banks.
Welcome to Communist Ireland, you may think. And it's true that nationalizing the Irish banks, however reluctantly, would cause all kinds of problems in the future. But as far as I'm concerned, it's still better that than paying way too much for the property assets coming into NAMA.
I don't mind being a taxpayer shareholder in the Irish banks. Maybe I will get some money out of it in the long run, or maybe my kids will. And maybe they will also get something back when NAMA sells all those properties after holding on to them for years.
There is another big plus in nationalizing our banks, one that could even please the IMF, an organization that is not a big fan of state ownership. If the government is in ultimate control, it can dictate bank policy and make lending to businesses happen again. Everybody wins!
Except the existing shareholders, of course. But then they have already lost almost everything.
It's a tough world these days, especially for the PIGS.
Wednesday, February 10, 2010
I don't buy the Ireland-is-out-of a recession talk
One or two of the more optimistic economists here have started to predict that Ireland will emerge from recession later this year or early next year. That view is founded mainly on the fact that some of the world's major economies have already edged out of recession and started to grow a little again, and that world trade will pick up a little in the coming year as a result.
As an open economy heavily dependent on exports, we will benefit from this upturn and Ireland will come out of recession. That's the theory, anyway.
Much as I would like to, though, I'm not buying it myself. I don't think we're going to see much, if any, growth in the Irish economy this year or next year, and we'll be lucky to see it in the year after that.
What will happen, I think, is that we will just about come out of recession, or in other words our economy will stop shrinking. But instead of showing much growth it will flatline, bumping along the bottom for a few years. And that's going to be bad news for all those out of work here and for school and college leavers over the next few years.
That's the reality. But it's a reality that a lot of people here just don't get.
They see a few headlines predicting that the recession is over and they think that we're just magically going to go back to the way things used to be here. I've got news for them -- we're never going back to the way it used to be in the Celtic Tiger years.
Towards the end of the Tiger years our growth was mostly driven by the construction sector, and our manufacturing sector had already started its sharp decline. We've had our property bubble and we're not going to have another, at least not for a very long time.
So if we are to recover the strong economic growth that made us well off, in the future it will have to come from the rest of the economy, from manufacturing and services. For that to work we have got to restore our international competitiveness; in other words, to start producing a whole lot more for a whole lot less. And what that really means is that we will have to work harder and longer for less money.
It's not going to be easy. Last week, in a major speech, the Taoiseach (Prime Minister) Brian Cowen seemed to suggest that the main thing we need is confidence.
The speech, to the Dublin Chamber of Commerce, has become an annual event in which the taoiseach talks freely and directly to the country's business elite. Last week he even invoked the spirit of 1916 as he urged the captains of industry to make the recovery happen.
But it's not that simple. In fact it's even more complex than sorting out our banking mess and getting credit flowing again.
It's not about a lack of confidence. It's about getting our costs down to the level where multi-national companies will want to come here again instead of lining up to get out of the place.
Because that's what they have been doing. Last year 130,000 people in Ireland lost their jobs, many in construction but many also in manufacturing.
The most recent figures, released a week ago, show that there are now 434,700 people here either out of work or working part time and claiming welfare. I remember predicting on this page about a year ago that unemployment would hit half a million, and we're now well on the way there.
In spite of this huge number of people out of work, however, there is also a whole section of the workforce here whose jobs are protected from the crisis because they are cocooned from reality in other ways. As far as they are concerned, they are carrying on as though nothing has changed.
So if you go to the doctor or the dentist, you find that it still costs you as much as before. The same is true of a wide range of professionals, from lawyers to accountants.
It's also true, of course, of all the people who are paid by the state. Yes, their pay has been trimmed a little over the past year, partly to pay more of their huge pension bill, but they are still very highly paid and they have job security, unlike workers in the real economy.
The problem is that too many of these people -- the professionals and those on the government payroll -- are still floating around on cloud nine, and they still don't get it. They talk about the recession and competitiveness, but it's always someone else's problem, not theirs. They oppose all efforts to get them to accept lower pay levels.
The difficulty for the rest of us is that their pay affects the cost of living and of doing business here. Our electricity power plant workers (semi-state workers with a virtual monopoly) are the highest paid in Europe. We also have the most expensive electricity in Europe. That's not a coincidence.
In a way we have become a divided nation. It's not about the border anymore.
These days there's a new border, between those who have secure jobs and those who are out of work. And so far the haves are showing very little consideration for the have-nots.
The professionals talk about the effects of the recession, but there's no sign of their organizations proposing a nationwide drop in fees. The state workers (the last bastion of old-fashioned union power in Ireland) have already begun a campaign of non-cooperation and disruption aimed at reversing the moderate pay cuts that have been imposed on them.
The government desperately needs to reduce the budget deficit by reducing its pay bill, yet the state workers refuse to accept it. They want the government to go on borrowing to pay them.
The result of all this is a growing rift in Ireland between the two sides. Those who are out of work and desperately trying to live on welfare and hold on to their homes look in disbelief at the behavior of the state workers and the professionals.
They read about people on state boards and in state organizations and quangos who are still living like they did before the recession, still taking big salaries, getting big expenses and charging all kinds of things from foreign trips to concert tickets to the taxpayer.
Every week here the media uncovers more examples of this waste, more stories about state organizations which seem to do very little except keep their senior staff in the luxury they have come to expect.
One thing seems clear. The significant reduction in pay and living standards that will be necessary here to shift us back into a competitive position will have to be shared across Irish society.
If that does not happen -- and so far it is not happening --then there is a serious risk here of social breakdown, of those who have well-paid, protected jobs and the army of unemployed becoming openly antagonistic to each other.
That would be a disaster for us, and the government will have to show real leadership over the next couple of years to avoid it.
Apart from the manufacturing sector, the other area that is really suffering here at the moment is small business, including retail, as spending contracts in the recession. Small businesses are having a very tough time, and it's not helped by the triple whammy they face.
Sales are down, the banks won't give them credit to keep going, and the government red tape, enforced by well-paid state workers, continues to tie them up as though everything is normal. It is driving some small business people to despair.
Let me give you an example. My daughter lost her Saturday job in our local bookshop recently when it closed down. The owner explained to me that he could no longer afford to pay the high rent he was being charged.
It was over ****1,000 a week, a huge rent for a small unit in a suburban shocking mall. There were some weeks last year, as the downturn pushed spending down, when his turnover was not much more than that. So after 20 years in business he closed.
He had pleaded with the landlord to reduce the rent, but to no avail. That was a couple of months back and the place is still vacant.
And all over Dublin, in some of the main shopping malls, the same thing has happened. Even on Grafton Street there are a number of vacant units, dark and dirty gaps in the smile on the face of the most prestigious shopping street in Dublin.
Commercial rents are a real problem here now. Like wage levels, they soared during the Celtic Tiger years, making Grafton Street the fifth most expensive shopping street in the world.
The problem is that they have not come down, even though the recession has sharply reduced turnover, and this is destroying many long established businesses.
There was real shock here a couple of weeks ago when the Grafton Street jewelers West -- the Tiffany of Dublin -- said it would be closing. Iconic fashion and shoe stores are also closing, and the street that was once famous for its shopping experience is being reduced to a waste land of cell phone outlets and fast food joints.
Tough times in Ireland -- but not for all.
As an open economy heavily dependent on exports, we will benefit from this upturn and Ireland will come out of recession. That's the theory, anyway.
Much as I would like to, though, I'm not buying it myself. I don't think we're going to see much, if any, growth in the Irish economy this year or next year, and we'll be lucky to see it in the year after that.
What will happen, I think, is that we will just about come out of recession, or in other words our economy will stop shrinking. But instead of showing much growth it will flatline, bumping along the bottom for a few years. And that's going to be bad news for all those out of work here and for school and college leavers over the next few years.
That's the reality. But it's a reality that a lot of people here just don't get.
They see a few headlines predicting that the recession is over and they think that we're just magically going to go back to the way things used to be here. I've got news for them -- we're never going back to the way it used to be in the Celtic Tiger years.
Towards the end of the Tiger years our growth was mostly driven by the construction sector, and our manufacturing sector had already started its sharp decline. We've had our property bubble and we're not going to have another, at least not for a very long time.
So if we are to recover the strong economic growth that made us well off, in the future it will have to come from the rest of the economy, from manufacturing and services. For that to work we have got to restore our international competitiveness; in other words, to start producing a whole lot more for a whole lot less. And what that really means is that we will have to work harder and longer for less money.
It's not going to be easy. Last week, in a major speech, the Taoiseach (Prime Minister) Brian Cowen seemed to suggest that the main thing we need is confidence.
The speech, to the Dublin Chamber of Commerce, has become an annual event in which the taoiseach talks freely and directly to the country's business elite. Last week he even invoked the spirit of 1916 as he urged the captains of industry to make the recovery happen.
But it's not that simple. In fact it's even more complex than sorting out our banking mess and getting credit flowing again.
It's not about a lack of confidence. It's about getting our costs down to the level where multi-national companies will want to come here again instead of lining up to get out of the place.
Because that's what they have been doing. Last year 130,000 people in Ireland lost their jobs, many in construction but many also in manufacturing.
The most recent figures, released a week ago, show that there are now 434,700 people here either out of work or working part time and claiming welfare. I remember predicting on this page about a year ago that unemployment would hit half a million, and we're now well on the way there.
In spite of this huge number of people out of work, however, there is also a whole section of the workforce here whose jobs are protected from the crisis because they are cocooned from reality in other ways. As far as they are concerned, they are carrying on as though nothing has changed.
So if you go to the doctor or the dentist, you find that it still costs you as much as before. The same is true of a wide range of professionals, from lawyers to accountants.
It's also true, of course, of all the people who are paid by the state. Yes, their pay has been trimmed a little over the past year, partly to pay more of their huge pension bill, but they are still very highly paid and they have job security, unlike workers in the real economy.
The problem is that too many of these people -- the professionals and those on the government payroll -- are still floating around on cloud nine, and they still don't get it. They talk about the recession and competitiveness, but it's always someone else's problem, not theirs. They oppose all efforts to get them to accept lower pay levels.
The difficulty for the rest of us is that their pay affects the cost of living and of doing business here. Our electricity power plant workers (semi-state workers with a virtual monopoly) are the highest paid in Europe. We also have the most expensive electricity in Europe. That's not a coincidence.
In a way we have become a divided nation. It's not about the border anymore.
These days there's a new border, between those who have secure jobs and those who are out of work. And so far the haves are showing very little consideration for the have-nots.
The professionals talk about the effects of the recession, but there's no sign of their organizations proposing a nationwide drop in fees. The state workers (the last bastion of old-fashioned union power in Ireland) have already begun a campaign of non-cooperation and disruption aimed at reversing the moderate pay cuts that have been imposed on them.
The government desperately needs to reduce the budget deficit by reducing its pay bill, yet the state workers refuse to accept it. They want the government to go on borrowing to pay them.
The result of all this is a growing rift in Ireland between the two sides. Those who are out of work and desperately trying to live on welfare and hold on to their homes look in disbelief at the behavior of the state workers and the professionals.
They read about people on state boards and in state organizations and quangos who are still living like they did before the recession, still taking big salaries, getting big expenses and charging all kinds of things from foreign trips to concert tickets to the taxpayer.
Every week here the media uncovers more examples of this waste, more stories about state organizations which seem to do very little except keep their senior staff in the luxury they have come to expect.
One thing seems clear. The significant reduction in pay and living standards that will be necessary here to shift us back into a competitive position will have to be shared across Irish society.
If that does not happen -- and so far it is not happening --then there is a serious risk here of social breakdown, of those who have well-paid, protected jobs and the army of unemployed becoming openly antagonistic to each other.
That would be a disaster for us, and the government will have to show real leadership over the next couple of years to avoid it.
Apart from the manufacturing sector, the other area that is really suffering here at the moment is small business, including retail, as spending contracts in the recession. Small businesses are having a very tough time, and it's not helped by the triple whammy they face.
Sales are down, the banks won't give them credit to keep going, and the government red tape, enforced by well-paid state workers, continues to tie them up as though everything is normal. It is driving some small business people to despair.
Let me give you an example. My daughter lost her Saturday job in our local bookshop recently when it closed down. The owner explained to me that he could no longer afford to pay the high rent he was being charged.
It was over ****1,000 a week, a huge rent for a small unit in a suburban shocking mall. There were some weeks last year, as the downturn pushed spending down, when his turnover was not much more than that. So after 20 years in business he closed.
He had pleaded with the landlord to reduce the rent, but to no avail. That was a couple of months back and the place is still vacant.
And all over Dublin, in some of the main shopping malls, the same thing has happened. Even on Grafton Street there are a number of vacant units, dark and dirty gaps in the smile on the face of the most prestigious shopping street in Dublin.
Commercial rents are a real problem here now. Like wage levels, they soared during the Celtic Tiger years, making Grafton Street the fifth most expensive shopping street in the world.
The problem is that they have not come down, even though the recession has sharply reduced turnover, and this is destroying many long established businesses.
There was real shock here a couple of weeks ago when the Grafton Street jewelers West -- the Tiffany of Dublin -- said it would be closing. Iconic fashion and shoe stores are also closing, and the street that was once famous for its shopping experience is being reduced to a waste land of cell phone outlets and fast food joints.
Tough times in Ireland -- but not for all.
Tuesday, February 2, 2010
Back to the dour old past in Northern Ireland politics
So here we go again. Just when we thought it was all over and consigned to history, we're back to another crisis in Northern Ireland.
If they ever make a movie about it, it will be called Back to the Past instead of Back to the Future. This latest crisis which could sink the power-sharing administration and wreck stability up there has been going on for over a week now.
It may be resolved by the time you read this. But I'm not betting on it.
Watching the dour faces of British Prime Minister Gordon Brown and the Taoiseach (Prime Minister) Brian Cowen as they arrived in the North last week to deal with the crisis, I could not help thinking back to the famous remark made by the late Reggie Maudling.
When the Conservatives took power in Britain in 1970 the North had just exploded in violence, making it the number one problem for Maudling, the new British home secretary. He came over to the North for a look, and after the visit he gratefully boarded the plane back to London, settled into his seat, and called out, "For God's sake, bring me a large Scotch. What a bloody awful country."
Brown, a Scot, probably felt like doing the same in the middle of last week as he left the North after a couple of days of frustrating talks that failed to produce a result.
Cowen, a man who knows his history, was probably thinking of a pint rather than a Scotch as he headed back to Dublin. He may also have been thinking of the famous quote from Churchill.
Speaking about the North during the House of Commons debate on the Irish Free State Bill in 1922, Churchill referred to the way the First World War had changed everything:
“Then came the Great War -- every institution, almost, in the world was strained. Great Empires have been overturned. The whole map of Europe has been changed.
“The position of countries has been violently altered. The modes of thought of men, the whole outlook on affairs, the grouping of parties, all have encountered violent and tremendous changes in the deluge of the world.
"But as the deluge subsides and the waters fall short, we see the dreary steeples of Fermanagh and Tyrone emerging once again. The integrity of their quarrel is one of the few institutions that has been unaltered in the cataclysm which has swept the world.”
Yes indeed. Everything changes, but the North remains the pain in the behind it always was.
Churchill's words are as true today as they were 90 years ago. Despite disarmament, peace and power-sharing, the place is still a problem.
Despite enough years of normality to make even Belfast a tourist destination, the ancient quarrel bubbles away beneath the surface. Despite truckloads of money poured into the place and endless encouragement for the local politicians, the new beginning has been on the point of collapse for the past 10 days.
Once again, the political facade cracked and the backwoods men threatened to bring the house of cards down. That's the last thing we need, given the potential there would then be for a return to violence.
That is unthinkable. Which is why Cowen and Brown immediately put everything else on hold and hurried to Belfast early last week.
They left the talks after a couple of days, but the negotiations have continued now for over a week with the Irish foreign minister and the British secretary for the North keeping an eye.
By the time you read this, some compromise may have been cobbled together. Or maybe not.
One way or the other, enormous damage has been done to trust and confidence, to hopes of building a normal society in the North. The whole episode has left a very bad impression.
While the rest of us grapple with real problems and try to pay our way, the Northern politicians (on both sides) split hairs and spill out their old venom while Britain spends billions to keep the place going. They're not only different, they're on a different planet.
People down here in the south have watched in disbelief. Cowen has his hands full right now as the true extent of the banking black hole created by our property collapse becomes visible. The challenge we face to avoid national bankruptcy is immense.
And where was the taoiseach last week? Up in Belfast talking to the looney tunes.
Brown is also in a battle for survival. He's up to his neck in Iraq and Afghanistan and he faces similar economic problems to us, with the added problem of an election in a few months. Yet he was also stuck in the North.
Both of them are extremely busy men. Yet last week they had to drop everything to go to the North and babysit the toddlers who were throwing everything out of their buggies again.
This column has not been concerned with Northern Ireland for a long time, for the very good reason that the place no longer impinges on us in the south the way it used to do.
But this mini crisis up there dragged it back on to our agenda again, and people here are not happy about that. In fact it would be fair to say that people here are disgusted with the bickering, the intransigence, the sheer bloody-mindedness.
For a lot of people down here, if they ever hear another whining, self-righteous Northern accent again it will be too soon.
The crisis, as you probably know, was caused by Sinn Fein's warning that it was about to pull out of the power-sharing administration because of the failure to devolve responsibility for policing and justice from Westminster to the administration in the North. This is the final part of the transfer of power to the North's new administration, which already handles everything else.
It's way overdue but the Unionists have been dragging their feet, still suspicious of giving Sinn Fein a say in such a critical area.
In fairness to Sinn Fein, one can understand their frustration. It's nearly 12 years since the Belfast Agreement was signed. It's over three years since the St. Andrews Agreement, after which the transfer of policing powers was supposed to follow without further delay.
But here we are three years later, and the Democratic Unionist Party (DUP) which shares power with Sinn Fein are still not ready to play ball.
The frustrating thing is that -- apart from the Neanderthal wing of the DUP -- the people in the North don't care that much about who controls policing now. As long as it's fair and even-handed it's not an issue.
What they do care about now is the economy, jobs, health, education and all the other bread and butter issues.
The DUP’s extreme wing can't bear the thought of the former gunman Martin McGuinness and his colleagues having an influence on policing. So they are saying no and they could yet split the party and topple their unfortunate leader Peter Robinson. They want Sinn Fein to prove it is trustworthy for another few years.
This is all nonsense, of course. The main threat at the moment up there is from the Real IRA and the other dissident Republicans, and Sinn Fein is likely to show those boys little mercy if it has a hand in directing police policy.
The DUP hardmen's intransigence on this is not only stupid but dangerous, although after the 30 years of IRA mayhem and murder, you can see why they find it hard to listen to McGuinness discussing policing. Nevertheless, it's time for them to move on.
As for Sinn Fein, their threat to collapse the administration was not what the North needs right now. The power-sharing administration already has responsibility for finance, jobs, business and all the other areas that affect people's everyday lives like health and education.
Given the state of the North's economy, there is no shortage of work to be done. It may be irritating for Sinn Fein, but there is no real urgency about the transfer of policing responsibility.
Both sides are at fault in this latest crisis, but this time the Loyalist hardliners are by far the most culpable.
If they ever make a movie about it, it will be called Back to the Past instead of Back to the Future. This latest crisis which could sink the power-sharing administration and wreck stability up there has been going on for over a week now.
It may be resolved by the time you read this. But I'm not betting on it.
Watching the dour faces of British Prime Minister Gordon Brown and the Taoiseach (Prime Minister) Brian Cowen as they arrived in the North last week to deal with the crisis, I could not help thinking back to the famous remark made by the late Reggie Maudling.
When the Conservatives took power in Britain in 1970 the North had just exploded in violence, making it the number one problem for Maudling, the new British home secretary. He came over to the North for a look, and after the visit he gratefully boarded the plane back to London, settled into his seat, and called out, "For God's sake, bring me a large Scotch. What a bloody awful country."
Brown, a Scot, probably felt like doing the same in the middle of last week as he left the North after a couple of days of frustrating talks that failed to produce a result.
Cowen, a man who knows his history, was probably thinking of a pint rather than a Scotch as he headed back to Dublin. He may also have been thinking of the famous quote from Churchill.
Speaking about the North during the House of Commons debate on the Irish Free State Bill in 1922, Churchill referred to the way the First World War had changed everything:
“Then came the Great War -- every institution, almost, in the world was strained. Great Empires have been overturned. The whole map of Europe has been changed.
“The position of countries has been violently altered. The modes of thought of men, the whole outlook on affairs, the grouping of parties, all have encountered violent and tremendous changes in the deluge of the world.
"But as the deluge subsides and the waters fall short, we see the dreary steeples of Fermanagh and Tyrone emerging once again. The integrity of their quarrel is one of the few institutions that has been unaltered in the cataclysm which has swept the world.”
Yes indeed. Everything changes, but the North remains the pain in the behind it always was.
Churchill's words are as true today as they were 90 years ago. Despite disarmament, peace and power-sharing, the place is still a problem.
Despite enough years of normality to make even Belfast a tourist destination, the ancient quarrel bubbles away beneath the surface. Despite truckloads of money poured into the place and endless encouragement for the local politicians, the new beginning has been on the point of collapse for the past 10 days.
Once again, the political facade cracked and the backwoods men threatened to bring the house of cards down. That's the last thing we need, given the potential there would then be for a return to violence.
That is unthinkable. Which is why Cowen and Brown immediately put everything else on hold and hurried to Belfast early last week.
They left the talks after a couple of days, but the negotiations have continued now for over a week with the Irish foreign minister and the British secretary for the North keeping an eye.
By the time you read this, some compromise may have been cobbled together. Or maybe not.
One way or the other, enormous damage has been done to trust and confidence, to hopes of building a normal society in the North. The whole episode has left a very bad impression.
While the rest of us grapple with real problems and try to pay our way, the Northern politicians (on both sides) split hairs and spill out their old venom while Britain spends billions to keep the place going. They're not only different, they're on a different planet.
People down here in the south have watched in disbelief. Cowen has his hands full right now as the true extent of the banking black hole created by our property collapse becomes visible. The challenge we face to avoid national bankruptcy is immense.
And where was the taoiseach last week? Up in Belfast talking to the looney tunes.
Brown is also in a battle for survival. He's up to his neck in Iraq and Afghanistan and he faces similar economic problems to us, with the added problem of an election in a few months. Yet he was also stuck in the North.
Both of them are extremely busy men. Yet last week they had to drop everything to go to the North and babysit the toddlers who were throwing everything out of their buggies again.
This column has not been concerned with Northern Ireland for a long time, for the very good reason that the place no longer impinges on us in the south the way it used to do.
But this mini crisis up there dragged it back on to our agenda again, and people here are not happy about that. In fact it would be fair to say that people here are disgusted with the bickering, the intransigence, the sheer bloody-mindedness.
For a lot of people down here, if they ever hear another whining, self-righteous Northern accent again it will be too soon.
The crisis, as you probably know, was caused by Sinn Fein's warning that it was about to pull out of the power-sharing administration because of the failure to devolve responsibility for policing and justice from Westminster to the administration in the North. This is the final part of the transfer of power to the North's new administration, which already handles everything else.
It's way overdue but the Unionists have been dragging their feet, still suspicious of giving Sinn Fein a say in such a critical area.
In fairness to Sinn Fein, one can understand their frustration. It's nearly 12 years since the Belfast Agreement was signed. It's over three years since the St. Andrews Agreement, after which the transfer of policing powers was supposed to follow without further delay.
But here we are three years later, and the Democratic Unionist Party (DUP) which shares power with Sinn Fein are still not ready to play ball.
The frustrating thing is that -- apart from the Neanderthal wing of the DUP -- the people in the North don't care that much about who controls policing now. As long as it's fair and even-handed it's not an issue.
What they do care about now is the economy, jobs, health, education and all the other bread and butter issues.
The DUP’s extreme wing can't bear the thought of the former gunman Martin McGuinness and his colleagues having an influence on policing. So they are saying no and they could yet split the party and topple their unfortunate leader Peter Robinson. They want Sinn Fein to prove it is trustworthy for another few years.
This is all nonsense, of course. The main threat at the moment up there is from the Real IRA and the other dissident Republicans, and Sinn Fein is likely to show those boys little mercy if it has a hand in directing police policy.
The DUP hardmen's intransigence on this is not only stupid but dangerous, although after the 30 years of IRA mayhem and murder, you can see why they find it hard to listen to McGuinness discussing policing. Nevertheless, it's time for them to move on.
As for Sinn Fein, their threat to collapse the administration was not what the North needs right now. The power-sharing administration already has responsibility for finance, jobs, business and all the other areas that affect people's everyday lives like health and education.
Given the state of the North's economy, there is no shortage of work to be done. It may be irritating for Sinn Fein, but there is no real urgency about the transfer of policing responsibility.
Both sides are at fault in this latest crisis, but this time the Loyalist hardliners are by far the most culpable.
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