Ireland of the welcomes . . . and the racism

One story was big enough last week to push our economic crisis off the front pages for a day, and that was the racist murder of a 15-year-old Nigerian boy stabbed to death in Tyrrelstown, a housing estate on the west side of Dublin, the sprawling area of cheap new housing where many immigrants have settled. 


Toyosi Shittabey was one of six children and had been living in Ireland for the past 11 years, since he was four years old. He was a popular youngster and was a gifted footballer, playing for the under-15 side at Shelbourne Rovers, one of the top soccer clubs in the country. His aim was to play for Ireland one day, and he was good enough for that not to be just a pipe dream.


The killing was deeply shocking, not least because Toyosi was so well known in the area and so well liked in his local school. His funeral saw a huge turnout of people from the area and the school, with many of his schoolmates openly upset and crying.

Last weekend there was a memorial meeting in the city center to protest at what had clearly been a racist murder. 
The horrified reaction here was palpable, not just in the area but across the city, because this killing seemed to confirm the fears that many people have about the consequences of the high level of immigration we have had over the past decade and a half.

There has been a tendency at official level to sweep such fears under the carpet, to insist that there is no problem. But the reality on the ground is rather different. 


This wishful thinking at official level was visible again after Toyosi's murder. Immediately after it happened local and national politicians and church and social leaders appeared in the area to get across the message that although this was "an attack with racist overtones,” there really is little or no racism in Ireland. This attack was unusual, an aberration, they insisted. 


That is the official position. It is, as I said, largely wishful thinking, and it's pushed by the very same people who denied for so long that Ireland had a problem with immigration which needed to be fixed.

Back then, of course, with the economy booming, it didn't seem to matter too much that so many "asylum seekers" who were really economic migrants were arriving here. Typically, they had no papers, claimed to have come from somewhere their life was in danger and said they needed asylum.

And back then there was always the "Irish baby" route to becoming permanent here if their asylum claims were rejected. 
At its height, over 10,000 immigrants a year -- not counting those from other European Union countries -- were coming here, mostly from poor former Soviet and African countries. Very few of them were ever sent back.

Given our terror of appearing to be politically incorrect, the reaction was to set up numerous state funded bodies to help them and to give them free legal aid to guide them through the system. Many applications took years to process, by which time the immigrants were settled here and/or had an Irish child. 


As I said, it did not seem to matter at the time and we were all encouraged to embrace "the new multicultural Ireland" as a positive development. Anyone who expressed any doubts about what was happening was immediately accused of racism (often by the same lawyers who were doing so well out of the system). 


Looking back now, it seems ridiculous, a form of national hubris. Here we were, a tiny country on the edge of Europe which had always been so hopeless at providing jobs for our own people that they ended up emigrating all over the world, supposedly being able to give jobs to thousands of people from thousands of miles away. And many of those thousands who came here had neither English nor job skills. 


Well, now the boom is over, the bubble has burst and we are left with a serious problem. Our collapse into recession and soaring unemployment has brought the tensions that were hidden by the boom to the surface. And denial, wishful thinking or political correctness are not going to solve the problem for us. 


One of the difficulties, of course, is that despite all we were promised about programs to spread immigrants across the city and country, most of them ended up living in poorer housing areas on the west and north sides of Dublin. These already deprived areas with drug and alcohol problems and high unemployment now have large numbers of immigrants competing with the locals for the limited social services that are available. 


The small Mount Eustace estate in Tyrrelstown in West Dublin where Toyosi lived is better than most of these areas, but over 50% of the 200-plus homes in the estate are occupied by immigrants, many of African origin.

Like in the wider Tyrrelstown and Blanchardstown areas, in West Dublin, many of these homes are owned by small time Irish property investors who bought a few houses during the boom and now get the rent for their immigrant tenants in direct payments from the state. 


Inevitably there are tensions with some local people who resent the influx of foreigners and the fact that they get unemployment payments, rent support payments, welfare payments based on the number of children and so on, just like a local Irish family. Unemployment among these immigrants is very high, another source of resentment. 


Something else that is happening now is that many of the immigrants who arrived here 10 or 15 years ago now have children who are teenagers. What happened to Toyosi is an extreme example of the problems that this is bringing. 


Exactly what was involved is still under investigation, but one newspaper here, The Sunday Tribune, reported the event as follows:

Toyosi had been to the sports center in nearby Blanchardstown with his friends on Friday evening. Afterwards, he was walking home with his friends in the Mount Eustace estate. He was with four other male teenagers, two originally from Nigeria and two originally from the Congo, and with them were two Irish teenage girls.

They passed two men outside a house in Mount Eustace and the teenage girls asked one of the men for a cigarette. Both men then began to abuse Toyosi and his friends and called them "niggers" several times, according to a local source. A brief altercation ensued before Toyosi and his friends walked away. 


According to the Tribune, the two men (who are brothers) then went into their house and got a knife. Both men had been drinking, according to a Garda (police) source. They got into their car and drove after the teenagers. 


When the men approached the teenagers again, Toyosi told his friends not to get involved and to keep walking. But the man armed with the knife stabbed him through the heart, the Tribune reported.

How anyone can say this was not a racist attack seems incredible. Yet some politicians immediately claimed that this was “not specifically a racist attack.”

But of course to admit that we have a serious racism problem here now would be to admit that our immigration policy and system over the past 20 years was a bit of a joke.

It would also mean admitting that all the money and structures that were supposed to be put in place to ensure that our immigrants would blend in and prosper here was all just talk. We did spend the money, a few hundred million a year in total, but a lot of it went to lawyers and landlords.

What we were told would never happen is exactly what has become a reality. We have ghettos in some city center streets and around the outer suburbs, usually in the poorest neighborhoods, where there is a high concentration of immigrants and a lot of resentment from the locals there. All it takes is someone to say the wrong thing, or even look the wrong way, and it can end up in serious trouble.

We have created a complex problem for ourselves, just one aspect of which is the schools in these areas. A few months back the principals of some of these schools warned a committee of the Dail (Irish Parliament) of the dangers of failing to address the educational needs of children with non-Irish parents.

The five principals (all with around 90% immigrant kids in their schools) told the committee that it was essential for these children to learn to speak English as soon as possible to help them integrate. The principal of one school in West Dublin explained that 87% of pupils at his school did not have English as a first language. He called for additional funding for language teaching for both children and their parents.

His school is not unusual -- there are half a dozen schools around Dublin with similar levels of immigrant kids, many of whom have no English at all. In some of these schools the kids speak a few dozen languages.

And it's not just Dublin. The principal of the school in Claddagh, Co Galway (and you can't get more Irish than that) said that he had high levels of immigrant children and that “ghettoization” was already happening on the east side of Galway. He noted the experience of rioting in France because immigrants had not been properly integrated into society.

The problem is, of course, that there is no money now to pay for additional language and support teachers in these schools where teachers are at their wits end trying to cope. We didn't spend the money during the boom. Where are we going to find it now?

Meanwhile, attitudes are hardening here as the recession gets worse. And it's worst among the young Irish who have to compete with immigrants for whatever jobs are available, especially low skill jobs in poorer areas.

A recent national opinion poll showed that 43% of people would like to see some, but not all, immigrants leave the state. But 81% of those aged 18 to 24 would like to see the number of immigrants fall.

The Irish are not more racist than anyone else. But we are rapidly learning that we can be just as racist as anyone else when we are put to the test.

Staring into the black hole of financial debt in Ireland

Financial Armageddon ... economic holocaust ... Celtic Chernobyl ... journalists and commentators here struggled last week to find words to adequately express the scale of what has happened to us.

Normally, language like this would be way over the top. But this time, extreme though the language was, it seemed too weak to encompass the extent of the monumental disaster that has engulfed us.

The doomsday phrases were prompted by the awful truth about the Irish economy which was revealed last week. On Tuesday of last week, the Minister for Finance Brian Lenihan revealed for the first time to the Dail (Parliament) the true scale of what it is going to cost to rescue our banks.

I wrote about it here last week, listing the tens of billions that have to be provided, but like most people the gigantic scale of what was involved did not really sink in with me immediately. Somehow it did not seem real.

It took a few days. But now I get it. Now myself and everyone else here really understands the financial catastrophe that has befallen Ireland, and the implications for all of us in the coming years.

It's easy to get lost in the billions, although it helps if you remember that every billion euro so casually mentioned by the minister last week is actually one thousand million euro.

But numbers aside, what was happening to us last week was very simple -- Ireland was being mortgaged. Last Tuesday, March 30, 2010, was the day a huge millstone was hung around our necks. It was the most significant day in Irish economic history since we got out independence nearly a century ago.

So what happened last Tuesday? To save the Irish banks the Irish government (and therefore the Irish taxpayer) is taking on an enormous burden of debt that will take decades to repay.

We are talking about at least €90 billion -- with the strong possibility that this could increase to well over €100 billion -- a debt so enormous for a country this size that it will beggar us for years.

The scale of what is involved is almost beyond comprehension. The sums are so big that not just our present but our future is being mortgaged. We are being saddled with a gigantic mountain of debt.

What this means in practical terms is that we will all be paying more tax for years to come, and instead of that money going to improve state services it will go to pay the interest on the huge debt we have now taken on.

The money that should be spent on improving our hospitals and schools and welfare and the police and public transport and the roads and all the other state services so desperately in need of extra funds will be used instead to pay for rescuing our banks. It's all going to be swallowed up by debt interest and debt repayments.

From the heady heights of the Celtic Tiger just a few years ago, we have plunged into an economic black hole that will take us decades to climb out of. And it's all down to the appalling mistakes made by the golden circle of bankers, developers, incompetent regulators and politicians who got us into this mess.

The main bankers and developers who caused this crisis through their reckless gambling in the property bubble can't pay for their losses now, because most of them are bust. So the ordinary taxpayers -- who had nothing to do with what went on -- have to underwrite the bill. And the level of anger among ordinary people here now is frightening.

People here now realize that our economy is screwed and that their future and the future of their children has been blown away. They are seething with rage.

How did this happen? Why are the people who did this to us not in jail like Bernie Madoff?

People here want answers, and they want the people who caused this mess punished without any further delay. The anger on phone-in radio shows is frightening, and it's not just the rage against the bankers and developers and politicians that is so worrying.

The way people here are talking now, our sense of community, of being proud to be Irish and being optimistic about the future and our ability to be successful have all been eaten away by this crisis.

The way people here are talking now, it's grab all you can of the diminishing pile. It's everyone for himself, it's get out if you can, it's encourage your kids to emigrate, it's a cynicism about fairness and political accountability here that is so deep that our future as a just and caring society has been shattered.

What happened last Tuesday was that Lenihan spelled out to the Dail exactly how bad things are, and began the process which will result in us taking on €100 billion or more in debt obligations.

That colossal sum is the result of two things - the transfer of the bad property loans from the banks into state ownership under the National Asset Management Agency, and the recapitalization of the banks and savings and loans institutions that are now bust.

There are two main culprits in what has happened to us, Anglo Irish Bank and the Irish Nationwide Building Society. Both of these went absolutely crazy during the boom, lending billions of euros to developers with little or no security.

Anglo in particular was out of control, a small bank that grew at an astonishing rate from a loan book of a few billion to around €80 billion during the boom years. While the boom continued, Anglo could show high profits, so much that the biggest bank in Ireland, Allied Irish Banks, began to chase them to protect its share price.

Pretty soon it too was throwing the rule book out the window and loaning vast amounts of borrowed money to Irish developers for projects not just in Ireland but around the world, from China to the U.S.

Irish Nationwide, a building society or savings and loans, was smaller but almost as bad. Instead of just taking deposits from ordinary savers and giving loans to people who wanted to buy houses which is what a building society is supposed to do, it borrowed huge sums on money markets and got into commercial property lending and speculation.

The madness that Anglo and Irish Nationwide got involved in was not stopped by the Irish financial authorities, now a very sore point with people here. And although Anglo and Irish Nationwide were the worst, the madness infected all the financial institutions here.

Some went less crazy than others, but they're all bust now and have to be rescued, the government says, also a very sore point with people here.

Why not just let the worst banks go bust, particularly Anglo and Irish Nationwide? We can't do that, the government says, because that would mean burning the bond holders (the international money market people who lent the money to the banks) and that would destroy our international reputation.

The biggest bond holders are senior bond holders, the government says, like big investment funds and pension funds, and they have to be paid.

It's hard to swallow but the government is right about that. If we don't pay them we will never be able to get funds in the future (and don't forget Ireland is running a big budget deficit).

But there are also the unprotected subordinated bond holders, the guys who took a bigger risk for higher interest payments, and it's hard to see why the government is insisting on paying them in full as well. They took the risk and now they should pay the price, maybe getting back a fraction of their investment.

But the government is insisting all the bond holders have to be paid in full. The guys who gambled billions must get it all back. Why?

Lenihan’s argument is becoming less convincing by the day, as we learn more about the black hole we are in. There are a lot of couples here who bought a house during the boom for, say, a €350,000 mortgage, the house is now worth less than €200,000, maybe one of them has lost his or her job, they are battling to save their house, pay the utility bills, they can't afford a holiday, some weeks they can't put petrol in the car.

It's that bad for a lot of people here now. So when they read about banks being rescued and bondholders being paid in full and all this being done by piling a huge burden of debt on the back of every person in Ireland, you can understand why people here are so angry and disillusioned.

Day of reckoning for Irish Banks

Tuesday of this week was the Day of Reckoning for the Irish banks as the full truth of just how much it is going to cost us to rescue them was revealed for the first time.

Of course we have known for some time that the banks are in deep trouble. But exactly how much it is going to cost us taxpayers to save them was not very clear.

Well it's clear now. And it's not a pretty picture.

The picture was filled in on Tuesday afternoon by the Minister for Finance Brian Lenihan when he addressed a packed Dail (Parliament) to put official numbers on all the rumors for the first time.

Lenihan explained that the National Asset Management Agency (Nama), the body set up last year to take the bad property loans from the banks, has now examined the books in the banks and has valued the assets that the loans were given for.

Lenihan said that with that work done, Nama is now in the process of taking over more than 1,200 property loans from the banks, loans that were originally for ***16 billion.

These loans will be bought by Nama for 8.5 billion euro, representing an average discount of 47%. This means the agency will give the banks just over half of what the loans were worth on the banks' books.

The property developers who took out the loans will still be liable for the full amount of the loans and have been given just a month to come up with business plans to show how they will repay them. If not they may be forced into liquidation or pursued for personal assets.

But of course many of the biggest developers here are bust and no one really thinks they are going to be able to repay any significant amounts any time soon, or ever in some cases. Hence the discount Nama is applying to the loans -- or "haircut" as the bankers like to call it.

Nama will hold on to the loans for 10 or 15 years and wait for the property market to recover a bit before selling the assets back into the market and recompensing the taxpayer. That's the theory anyway.

The reality is much more complicated, involving assets that may never be worth anything, developers who will be liquidated and a property market that may never regain the crazy valuations that were spawned by the Celtic Tiger.

The 1,200 loans now being taken over by Nama include loans taken out by all the big name developers here, the billion euro boys. But this is just the first batch of loans that Nama will be taking on.

In total Nama will be taking €81 billion in property related loans from the banks and savings and loan institutions here, and the aim is to have the whole process complete by next February, a deadline set by the EU Commission.

The purpose of all this is not just to stop the banks going bust and the Irish economy collapsing as a result. The purpose is to free the banks of this huge burden of toxic debt which at present is preventing them from lending to individuals and businesses here and freezing the Irish economy as a result.

And just how bad things have gotten here were clear last week when the figures for the last quarter of last year became available and showed our economy had shrunk by a quarter.

The reckless, disgraceful behavior of the senior people in the Irish banks during the boom has now been exposed by the size of the discount being applied to the loans. Allied Irish Banks, for example, the biggest bank in the country and supposedly a pillar of caution and wisdom, will have a 43% discount applied to its massive property loan book.

That is only slightly better than the discount of 50% being applied to loans from Anglo Irish Bank, the small rogue bank that went completely crazy over the last few years of the boom and whose boss was taken in for questioning here a couple of weeks ago.

What does that say about the decisions that were taken by the most powerful men in Irish banking, the elite at the top of AIB? It says that in just a few years they managed to blow the entire profits of the bank that had been built up over decades.

It says that they have dug themselves into a bottomless black hole by taking risks that would shock a freshman business student. Risks like lending almost all the money into a single sector (construction) and concentrating a lot of that lending on a small number of people (the top 10 developers).

As your mother used to say, you don't put all your eggs in one basket -- but that is exactly what these senior bankers on their annual salaries of a million or two actually did. You couldn't make it up.

Figuring out how much Nama would pay for the junk property loans is only one side of the problem, as Lenihan told the Dail on Tuesday. Because discounting the huge property loan books in the banks cuts their capital.

Until this Tuesday, the banks could pretend that a property loan on the books for €100 million was still worth €100 million. Now they can't.

The loan has now been bought for about half that by Nama. And that discounting process -- or major reality check, if you like -- means that the capital reserves that the banks are supposed to hold have been destroyed.

The government has already had to step in to boost the banks over a year ago, first with the guarantee on deposits and then with direct capital injections. As a result the Irish state already owns a quarter of AIB, 16% of Bank of Ireland and has complete control of Anglo Irish Bank after last year's €11 billion bailout of the three institutions.

When the Nama process continues, Lenihan explained, the Irish state is going to have to put in even more billions to bolster the capital reserves of the banks so that they can meet international standards and function as legitimate banks should.

The new financial regulator here (the old one retired in disgrace) said on Tuesday that the Irish banks must have 8% of Tier 1 capital, and Lenihan told the Dail that he agrees with that. It's now emerging as the new international norm and is necessary to protect our banks from further shocks that are on the way as our economy contracts even more.

What that means is that the Irish taxpayer is going to have to pump even more massive capital amounts into the banks. Lenihan told the Dail that the state may need to pump more than €18 billion into Anglo Irish Bank, and over €8 billion of that is going in this week because the situation is so urgent.

Anglo Irish, the small maverick bank that started all the madness, is already owned by the state. But it now looks like our biggest bank is heading the same way.

AIB needs to raise €7.4 billion in capital by the end of the year, which seems impossible without a big amount of state input. The state already owns 25% of AIB, and unless the bank is able to raise enough funds in the markets (very unlikely) then the state will end up with well over 50%, effectively nationalizing Ireland's biggest bank.

AIB is doing everything it can right now to avoid this, like immediately selling off its assets in Poland, the U.S. and Britain, but majority state ownership now looks inevitable if the bank is to survive.

Slightly better positioned is our next biggest bank, Bank of Ireland, but it is also facing a difficult future even if it manages to stay in private control.

In return for pumping capital into them, Lenihan told the Dail that he will be ordering AIB and Bank of Ireland to lend €3 billion each to businesses this year and next year, to try to get credit flowing in the Irish economy again.

In total the Irish banks may require an estimated €32 billion in capital, Lenihan told the Dail, the final amount depending on exactly how big the losses at Anglo Irish Bank turn out to be.

What all this means is that between the cost of Nama and the cost of recapitalizing the banks, every man, woman and child in Ireland is going to be up to their eyes in debt. And it's a debt that will hang around the necks of the next generation as well as the present one.

Despairing parents ringing the radio phone-in shows this week were saying that their children were not going to be lumbered with this because they were going to encourage them to emigrate.

Mind you, unless they already have their passports they won't be doing that any time soon. There's a backlog of 50,000 passport applications in the passport office here because the workers have been in dispute with the government over pay cuts.

The government has been desperately trying to trim its spending by cutting the pay of state sector workers by around 10%. Chaos has been threatened across the public service, in hospitals, schools and so on.

And long angry lines outside the passport office in the past week was part of that, with delays causing people to miss flights, cancel holidays and so on.

But that war has been averted, at least for the moment. A deal was struck in the early hours of Monday morning between the two sides which means that state workers will not be hit with any further pay cuts for the next three years, as long as they agree to save large amounts of money for the state by working harder and longer.

But they won't be getting back any of their pay that has already been cut. Why?

Because it's just not there. It's all needed to prop up the banks and to sort out the property mess.

The Day of Reckoning has arrived . . .

Too little, too late, Pope Benedict

The Pope's letter to Catholics in Ireland, a short version of which was read out at all Masses in the country last Saturday night and Sunday morning, is too little, too late. It has been dismissed with something approaching contempt not just by the victims of clerical abuse, but by people in general here.

All the newspapers and TV did vox pops -- street interviews -- in the wake of the letter, and reporters had a real problem finding anyone to say it was an adequate response to the abuse and cover-up scandal here.

People are right to be dismissive. I didn't go to church at the weekend myself. I don't go that often anyway, but I might have gone because I was curious.

But I decided against it because I did not want anyone to be interpreting the Pope's message for me. I prefer to make up my own mind on these things, which makes me a sort of Free Thinking Protestant, I suppose.

So I read the full text of the Pope's letter on line (it's easy to find on the web). It's not that long, and anyone interested in this issue should do likewise.

Not for any enlightenment, mind you, but to see what a load of self-serving waffle the Pope's message to Ireland actually is.

The Pope's letter is an exercise in obfuscation, rambling on at length about all kinds of extraneous matters without ever getting to the point. The point should have been to make changes in the Catholic Church that would help to prevent abuse like this ever happening again, at least on the scale it happened in Ireland.

Changes like ending priestly celibacy, ordaining women, confining close contact with children to married clergy, relaxing church rules on contraception, on sex before marriage, on people who are gay and on many other things.

Also helpful would be a school system in Ireland that is multi-denominational and co-educational rather than single religion and single sex. And of particular help would be an immediate decision by the church to refuse to ordain any young man who went straight from a single sex school into a seminary and had little or no contact with women or the world outside.

I could go on. As I have said before in this column, you don't have to be a psychologist to understand that a system that sent young boys from all male schools into all male seminaries was a recipe for arrested sexual development.

Repressed or arrested sexuality will always find a way out, and it is the release of that which put so many children in Ireland at risk from so many priests and religious who were incapable of a mature sexual relationship.

So what has the Pope to say about these things? Nothing, of course, because that would mean questioning the fundamentally negative attitude of Catholicism to sex.

And it goes way back. Remember that this is a religion which finds sex so questionable that the Immaculate Conception had to be dreamed up to explain how Mary had become pregnant with Jesus!

So in his letter the Pope had nothing to say about married priests, about celibacy, about ordaining women or any of the other things that might actually result in a clergy people can trust. He had no suggestions of changes in church teaching which might encourage a mature, responsible enjoyment of sex between consenting adults.

Instead he continues with a regime of repression and guilt. He prefers a church which is so uptight about sex that it produces twisted, fumbling abusers.

That is the broad context in which this Pope's message should be read. But even within a narrow context that accepts the current Catholic status quo, the Pope's letter to Ireland is so poor it's embarrassing.

For example, he presents the crisis over sex abuse as a problem not just for the Irish clergy but for everyone, as though everyone somehow shares in the blame. In the letter he even suggests it's a problem that's bigger than Ireland and the Catholic Church, further spreading the blame.

"It is true, as many in your country have pointed out, that the problem of child abuse is peculiar neither to Ireland nor to the church. Nevertheless, the task you now face is to address the problem of abuse that has occurred within the Irish Catholic community, and to do so with courage and determination,” the Pope wrote.

So it's a problem for "the Irish Catholic community," not just the clergy who ran the rotten system here.

The letter has a lot of flattery about the historic role of the Irish missionaries over the centuries, and a hope that the great days of the Irish Catholic Church can be restored. And there is a constant refrain that prayer and devotion can fix everything.

The Pope praises the way we stood up to years of persecution and the strength of traditional Catholicism in Ireland. And that brings another shoal of red herrings.

"In recent decades, however, the church in your country has had to confront new and serious challenges to the faith arising from the rapid transformation and secularization," he says, adding that "fast-paced social change” has been “often adversely affecting people’s traditional adherence to Catholic teaching and values.

“All too often, the sacramental and devotional practices that sustain faith and enable it to grow, such as frequent Confession, daily prayer and annual retreats, were neglected . . . the program of renewal proposed by the Second Vatican Council was sometimes misinterpreted and indeed, in the light of the profound social changes that were taking place, it was far from easy to know how best to implement it. In particular, there was a well-intentioned but misguided tendency to avoid penal approaches to canonically irregular situations."

Er, hello? What he seems to be suggesting there is that it's our fault for becoming too materialistic and not being good enough Catholics. And Vatican 2 didn't help either, it seems.

And on and on it goes with the waffle, when he could be talking about real change. To the abuse victims, the Pope says he is "truly sorry" and that what happened to them is "sinful and criminal." But all he really suggests is healing through more prayer.

To the Irish bishops he says, "It cannot be denied that some of you and your predecessors failed, at times grievously, to apply the long-established norms of canon law to the crime of child abuse . . . grave errors of judgment were made and failures of leadership occurred."

That's a serious rap on the knuckles, but there's no real follow-up. And the reference to canon law is worrying. The Pope doesn't come right out and say they should have gone to the police instead of covering up the abusing priests.

What the Pope does tell the bishops is that “in addressing cases of child abuse, continue to cooperate with the civil authorities in their area of competence.”

Notice that word "continue," which sort of suggests that this has been happening for ages. And also notice the reference to "competence," which seems to suggest that the bishops can decide which cases of child abuse the “civil authorities” are competent to deal with.

On and on this waffling and hair-splitting goes, and still there is nothing you could call a real breakthrough to respond to the situation. The Pope fails to ask any of the bishops, especially our compromised Cardinal Sean Brady, to resign.

To the Irish clergy in general he says, "I urge you to examine your conscience, take responsibility for the sins you have committed, and humbly express your sorrow."

That "take responsibility" phrase could be taken as a call for resignations, but if that's what he means, why not say so?

When it comes to what he calls "concrete initiatives to address the situation," the Pope calls for more intense prayers, Lenten devotions, Eucharistic adoration and so on. He says he is "confident that this program will lead to a rebirth of the church in Ireland."

Well he may be, but I think most ordinary Catholics, as opposed to the daily Mass goers, want something much more concrete.

The Pope also says in the letter there is to be an "Apostolic visitation" (a formal process whereby the Pope sends outside church investigators) to some places in Ireland where the worst abuse was going on -- dioceses, seminaries and religious orders. But that's not going to impress anyone here if they're more clergy.

As I was saying here last week, there is one big problem for the Pope in all of this. At the beginning of his message he says that he decided to write the letter to Ireland because of the "gravity of these offenses, and the often inadequate response to them on the part of the ecclesiastical authorities in your country.”

But it's not just a problem for the Irish bishops. It's a problem for him, as well.

Under an edict from the Vatican in 2001, which was mainly the work of the present Pope who was then Cardinal Ratzinger, all bishops were ordered to report cases of clerical child abuse to the Vatican authorities instead of police in their own countries. Such cases were to be handled under canon law and kept secret, as they always had been.

Which is exactly what the head of the Catholic Church in Ireland, Cardinal Sean Brady, had done back in 1975 when he handled cases of clerical child abuse under canon law and did not report them to the police.

People now say Brady must resign because of the cover-up. But if Brady goes, surely the Pope must resign as well?

In recent weeks we have learned about dozens of abuse cases in Germany which happened during the time he was Archbishop of Munich from 1977 to 1982, and there were cover-ups and priests were moved around there as well.

For all those reasons, the Pope's letter was greeted here with indifference, disdain and contempt. Too little, too late.

The Irish Catholic Church is imploding

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.

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.

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!