Finally, Ireland exit the bailout and they might even stop eating pigeons

Anti-austerity protesters on O'Connell Street last week.

First, I want to assure you that, tough though it is for journalists here now, no pigeons were hurt during the writing of this column. 

You will have seen The New York Times story about how things are so bad in Ireland that an out of work company director has to hunt and shoot pigeons to survive. 

He has since admitted that this was a slight exaggeration.  Yes, he likes shooting as a sport and he may have shot the odd pigeon.

But the welfare payment here for someone like him who is out of work is €188 (or $258) a week. In the discount stores like Lidl and Aldi you can buy a week's food for less than a quarter of that.

So unless you're a really gullible New York Times reporter you're not going to believe that someone like that is depending on pigeons he shoots and barbecues in the back yard. 

The former company director does not deny that he said it.  The really shocking thing is that the reporter, Liz Alderman, who is chief European business correspondent for the Times, believed that this was how he fed himself.

She needs to get out more.  Or at least become more familiar with the Irish tendency to spin yarns.

Alderman was in Dublin recently to set the scene for Ireland's exit from the bailout last weekend. 
She told a cautionary tale.  And despite the dead pigeons story that she swallowed and regurgitated, she was right to do so.

So, leaving the pigeons to rest in peace, what does Ireland's exit from the bailout actually mean? 

Taoiseach (Prime Minister) Enda Kenny went on television to address the nation on Sunday night to mark the bailout exit and to explain exactly what is involved.

On Sunday we reached the end of the three-year bailout program which began at the end of 2010.  Over the three years we have been given €67.5 billion by the Troika -- the IMF, the EU and the ECB -- to keep the country going when we could not borrow money from anywhere else.

We have made considerable progress in getting our finances back on track, and at this stage the financial markets are now cautiously willing to lend to us again. So from now on we can manage without any more bailout money.

That means that we have our economic sovereignty back, or as much sovereignty as any other European country has these days.  Taking the Troika money meant that the Troika laid down the budgetary targets Ireland had to follow for the last three years.  Now that we are out of the program, instead of the Troika being in control of our finances, we are in charge again. 

But as Kenny made clear in his TV speech to the nation on Sunday night, it does not mean that our financial troubles are over.  Kenny put on his sternest face to emphasize that.

The fact is that we still have a long way to go to reach a position that is financially sustainable.  But it is only fair that we briefly pat ourselves on the back, as Kenny did. 

We are the only one of the European countries who got in a mess which has managed to get out cleanly and on time.  We're not Greece, which is still a mess, and we're not even Portugal, which is likely to need another bailout.

We managed to implement the tax hikes and spending cuts that were part of the bailout program without mass demonstrations on the streets.  All of this can be seen as a success. 

But it is success that has come at a heavy price.  It's much too soon for anyone here to go around singing “A Nation Once Again.”  Hence Kenny's serious face.

The Irish economy is still limping along. Unemployment is still 12.5 percent.  And it would be much higher except that tens of thousands of people, especially young people, are emigrating every year.

Since we started the so-called austerity program our budget deficit has come down bit by bit.  Under the Troika program we are supposed to reach the bailout target of a deficit of three percent of GDP by 2015, the level that all EU countries have agreed not to exceed.

The forecast deficit for 2013 is 7.3 percent of GDP, for 2014 it is 4.8 percent and for 2015 it is 2.9 percent.  But it is still a struggle and the last steps are the hardest to achieve.   Even though we have slashed state spending and hiked taxes in the last few years, our budget deficit next year, for example, will still be around €10 billion. 

In the years between 2015 and 2020 we are supposed to start running budget surpluses, enabling us to begin paying back the mountain of money that we owe.

The size of our national debt is enormous, now over €200 billion, including the 67.5 billion euro bailout money.  Our debt to GDP ratio is around 125 percent which is on the borderline of what the financial markets regard as unsustainable.  Any slippage in our austerity drive and the markets will pull the plug on us again. 

Interest payments on our national debt are now running at around €10 billion a year and that is a crippling drag on our economy as money is sucked out of the country, money that otherwise could be spent on state services and job creation.

In a few weeks around €7 billion euro in bonds are maturing and the investors will have to be paid. 
Since we are back in the financial markets we can roll over debts like this into new bonds. 

But that €7 billion is just one of a succession of bond lots that will be maturing in the future; it shows what we are facing in the years to come.  Between interest payments on the debt and repayments on maturing bonds we are trussed up like a Christmas turkey, even if we are out of the Troika bailout.

We got into this mess, you will remember, because we were spending far too much during the boom years and when revenue collapsed as the bubble burst we were caught.  As Kenny said in his speech, "Everyone knows that you can’t keep spending more than you are earning."

Complimenting the Irish people on staying the course, he said that we have already completed over 90 percent of the necessary cuts and tax increases.  That is true, but the last 10 percent will be the most difficult. 

Kenny is optimistic.  As a result of the progress we have made, he said, we can now begin to reduce the national debt burden.

By 2020, he said, with continued effective management of the public finances, "we can eliminate government borrowing and cut public debt by a quarter, relative to the size of the economy."

That sounds great.  But the key phrase here is "relative to the size of the economy." 

Built into the government forecast are projections for growth of at least two percent a year, and you have to be as optimistic as Kenny to believe we will achieve that consistently. 

The forecasts right now are good, but it's really out of our control since it depends so much on a significant recovery in our export markets. 

There is also our ability to control spending.  Next year we are supposed to be taking a further €2.5 billion out of the budget, close to €1 billion of which is supposed to be cut from health spending. 

Given that the Department of Health seems incapable of enforcing cuts (instead of the planned cuts this year there was a spending over-run of over €200 million) that seems like pie in the sky. 

Where that will leave the deficit next year is anyone's guess.  And if you add in a failure to grow the economy we could be in trouble again.

The bottom line on our bailout exit is that it is a precarious business which, even if we stay afloat, will leave very little over to revive the economy here, thanks to the huge burden of debt we now carry.  We could be looking at a lost decade, or longer.

We have got this far thanks to the squeezed middle class in the private sector here who have been bled dry by tax hikes and hit by cuts in or charges for 'free' state services.  They have also seen their incomes stand still or go down at a time when everything seems to be as expensive as ever.

And as you know, tens of thousands of them are struggling and failing to pay mortgages on properties they bought during the boom and which are now worth half what the homes cost. 

You are familiar with the stories from here about all the ordinary couples who work hard and find that at the end of each month they have nothing left over when all the bills are paid.  And on top of this most people in the private sector here have seen their pensions vanish with the market collapse.

In contrast with this there is a large section of the Irish economy -- professional people and people on the state payroll -- who have escaped much of the squeeze that has hit people in the private sector. Their pay is largely intact and their pensions are protected. 

Our politicians, judges, civil servants and so on are all part of this elite.  Our saintly president, for example, who never misses a chance to deliver a sanctimonious lecture, is in line for four pensions.

That's another legacy of the bailout, a deep feeling here that the pain has not been applied equally. 
And that is why the radio stations here that did street interviews with people in the past few weeks found very mixed feelings about the Troika departure. 

A lot of people feel that it was the Troika which was pushing for cuts in wasteful state spending, often on pay and pensions, and demanding that professional fees from lawyers, doctors and others be cut so that they are more in line with European norms. 

Without the Troika there to tell our politicians what to do, will these reforms ever get done?  Or will the elite escape while ordinary workers are squeezed even more?

The government announced a new six year plan on Tuesday which sets out the steps the government will take to continue our economic recovery between now and 2020.  In the last few days some ministers have also begun to talk about a slight easing of the tax burden for the middle class (just in time for the next election). 

But the reality is that things will be tough here for the foreseeable future, even though we have exited the bailout.   

It may be a historic moment, but Kenny was right to down play it.

Now where did I leave that shotgun?  It's time to bag a few pigeon for the Christmas dinner. 

"Greed is good", especially in Ireland it seems with pillars of society on the take

Dr. Rhona Mahony, the master of the National Maternity Hospital in Dublin

Greed is good, Gordon Gekko said in the movie "Wall Street."

Well, Gordon sure has a lot of followers in today's Ireland.  Because over the past few weeks here we have seen examples of greed that would make even Gekko blush. 

One thing you can say about real people who resemble the fictional Gekko is that at least they take risks in the financial markets and make their money that way.  They may be capitalists who are red in tooth and claw, but they don't pretend to be anything else.

What we have seen here in the past couple of weeks, however, is a different kind of greed.  It's greed by the “top people” in senior positions in “official Ireland” who are regarded as pillars of our society, and it's greed that frequently feeds off state money.  In that sense it's more despicable and sickening than anything the real life Gekkos get up to.

Over the past four or five years here, the austerity regime enforced by the IMF and the European Central Bank has hit the living standard of people at all levels in the private sector hard.

Unemployment has soared, pay has been cut and private company pensions have collapsed as companies have struggled to survive or have gone under. 

The state sector has also taken some pain, but nothing like that which has been suffered in the private sector.  We have ended up in a situation where state workers on average earn far more than their private sector counterparts and where their generous pensions have survived, even if trimmed a little.

It's obviously unfair, but nothing has been done about it because it goes on under the radar. 

In the last few weeks, however, we have seen several examples which have enraged people in the private sector who were under the impression that the burden was being shared equally, at least to some degree.

One of the measures that has been in place here for a while now is a cap on state sector pay.  This is supposed to mean that the top earners in the state sector have had their pay capped to mirror the pain in the private sector. 

But instead of accepting this and being grateful that they still have big salaries and fat pensions, some of the top people involved have sidestepped the cap.   

The most high profile example of what has been going on is the case of Dr. Rhona Mahony, the master of the National Maternity Hospital in Dublin (it's the biggest maternity hospital in the country with around 10,000 babies a year born there). 

Because she is young, attractive and a woman in a profession dominated by men – and also because she played a starring role in the parliamentary committee hearings that preceded the abortion legislation here – Mahony has been the pin-up girl for the media here, and that made the revelations about her pay all the more shocking. 

As head of the hospital, Mahony is paid a state salary of €236,000 ($321,000), far more than her equivalent in other European countries would earn.

That's not unusual here – professional salaries in Ireland are way out of line.  But what came to light in the last few weeks is that she is also getting a €45,000 ($61,200) addition (or “top-up”) to her salary, which was not publicly known.

At a time when state spending on health is being slashed and ordinary workers have been hit hard by austerity, this kind of secret “top-up” is disgusting, particularly since it is on top of such a very high salary, a salary that ultimately comes from the ordinary taxpayer.  As such, it is clearly a breach of the public sector pay cap. 

Mahony denies this and says that her top-up actually came from fees from her private patients.  She has yet to explain how those fees added up to such a neat figure as €45,000. 

The wider question, of course, is whether someone like her in such a demanding role should be seeing private patients at all.  Since she's on such a huge salary from the state, surely she should be giving all her time to public patients?

Her claim that she has been singled out and vilified by the media is a reference to the fact that most senior consultants in the Irish health service earn big money from private patients in addition to their pay from state funds. 

One way or the other, it seems shocking that money from hospital car parks or shops or, even worse, public fundraising should be going to fund top-ups for the top people running our hospitals. 

A lot of hospitals here, including children's hospitals, have extensive fundraising operations, and people who support these are disgusted that some of the money they were raising was being diverted into the pockets of senior managers.   

The outcry over the Mahony case led to a review of pay to top managers in the other hospitals here and, surprise, surprise, it was revealed that nearly all of them are getting big top-ups in breach of the public sector pay cap. 

As public anger grew last week, the net was cast wider and other cases emerged in organizations that get public money.

Probably the most shocking was the case of the Central Remedial Clinic, one of the best known charitable organizations in the country which provides remedial care to handicapped people, accident victims and so on.

The clinic admitted last week that Paul Kiely, its former chief executive, had his state salary of €106,000 ($144,000) topped up by €136,000 ($185,000) in funds that came from public donations meant to support the work of the organization.  Charitable donations were also used to top up the salaries of several other CRC executives.  Kiely, who retired this summer, is a close friend of the former Taoiseach (Prime Minister) Bertie Ahern. 

As far as most people here are concerned, this was taking money away from handicapped children and adults who desperately needed it.  It is beyond disgusting. 

And to make matters even worse, it has been discovered that the fundraising arm of the CRC put €3 million ($4m) into the pension pot of the organization over the past year.  That's an awful lot of euros from CRC collection buckets filled by a sympathetic public on the streets of Ireland.  As I said, it is beyond disgusting.

All this is typical of what has gone on here since the austerity drive started after our economic collapse a few years ago. The top people – and particularly people who are paid by the state – have managed to insulate themselves from the shocks being felt among ordinary workers in the private sector. 

They have found ways of maintaining their Celtic Tiger pay, pensions and extras.  And their sense of entitlement – as in the case of Mahony – is staggering. 

It's a different mindset, a them and us mentality. They feel so important and essential that they regard themselves as exempt from the grinding austerity afflicting everyone else.

This is seen in particular in the whole pensions issue.  The pension schemes run by 80 percent of private companies in Ireland have been decimated by the economic crisis leaving the staff who have been paying into these schemes all their working lives with a very uncertain future. 
An example would be Independent News and Media (INM), the biggest media company in Ireland.  Its pensions have been cut in half.  Yet people in the state sector are still getting pensions that are almost as good as when the crisis began.

How?  The state simply borrows the money to pay them.

All state workers – teachers, nurses, police, etc. – benefit from this.  It also extends to the semi-state sector, like the ESB, the giant electricity supply company here which used to have a complete monopoly of the power market in Ireland and is still the dominant player.  Workers there (among the highest paid electricity workers in the world) are now threatening a national power strike in a few weeks because they are unhappy that their pension scheme is underfunded.

The value of the ESB pension scheme crashed with the stock markets, the same as the pension scheme in INM and numerous other private companies.  The difference is that workers in private companies are being left in the cold, but workers in the state and semi-state sectors, like the ESB and Aer Lingus, are getting their generous pensions paid.

No one should be surprised at this because all our politicians and senior civil servants are part of this system that protects their fat pensions.  Even our saintly president is in line for several guaranteed pensions when he retires. 

It's not just pensions.  The top-up scandal that breaches the public sector pay cap is also found at senior political level. The president, the taoiseach and senior ministers all have advisors who are getting salaries that are way above the capped level they are supposed to be at.

They are all special cases, you see, so talented and important that they must be paid extra.  No austerity there. 

All this illustrates that the top people in Ireland – including the top people in our state-owned banks – look after the most important thing first: themselves.  Their sense of entitlement and importance is so strong that they are deeply resentful at the suggestion that they might be doing anything wrong. 

The top people here have the morals of the elite in the worst banana republics.  And that did not change, even when we moved from the Celtic Tiger to the austerity program.

Vintage pamphlets offer a glimpse at the rules of 50s-era Irish Catholicism

Pamphlets were designed to attract the attention of young Catholics. 

You young ones are going to have to be a bit patient with us oldies this week.

Because this week the “Ireland Calling” column is dipping into the past, into a different time in Ireland when everyone not only said they were Catholic but behaved like real Catholics.  And in those days, real Catholics were obedient and unquestioning.

These days, Catholicism is very different. Everything is questioned.

Instead of being obedient, people pick and choose what they want to believe and which rules they want or don’t want to follow.  The church has lost its power, for reasons we all know about.  People have become a la carte Catholics.

When I was a kid growing up in midlands Ireland there was no such thing as a Catholic who treated the church’s set of rules like a menu from which you were free to choose.  You were free, of course, to follow your conscience, but it had to be what the church called an “informed conscience.”

And an informed conscience was one which was educated enough to understand and accept all of the church’s rules and teachings.  So you were free to decide as long as your conscience came to the right conclusion.  A kind of Catholic Catch-22!

A similar deal applied to the fundamental beliefs of the Catholic religion. Let’s say you had trouble believing that the little white wafer and the cheap red wine actually turned into the body and blood of Christ in the middle of Mass.  Or you had difficulty understanding how Mary could have conceived without having sex, or how later on she floated up to heaven through the clouds in a process called the Assumption.

Or you even had a problem believing that Christ had come back to life again after being dead for three days.

Well, there was no need to worry.  In fact there was no need to even think about it too much, because back in the 1950s and ‘60s when I was growing up, thinking too much was the worst thing a “good Catholic” could do.
 
There was no need for it, you see, as long as you had what the church called “the gift of faith.”  Having faith meant that you believed in things that you could not prove or understand, things like transubstantiation (the wafer and wine transformation), the Resurrection, the Assumption and a whole lot of other stuff that defied science, reason and logic.

The “gift of faith” enabled you to believe in these extraordinary things without having to give yourself a headache from too much thinking.  It was a great system, you have to agree.

The Pope was infallible, so he could never be wrong about the beliefs and teachings of the Catholic Church.  Whatever he decided and the bishops and priests relayed down the line to you was all you needed to know.

It wasn’t a matter of proof; it was a matter of acceptance.  If you had a problem with that, you were told to pray for “the gift of faith.”

It was a closed system of total power.  The Islamic ayatollahs these days must admire the total control the Catholic Church had over its followers back then.

This power and control filtered down to the local parish level in Ireland where the priest was rarely if ever questioned on matters of Catholic faith.  This turned many of them into mini despots who would tolerate nothing except absolute obedience to all the rules of the Catholic Church. Especially anything to do with “occasions of sin” when any form of sexual contact, no matter how minor, might be possible!

It was a different time, especially in Ireland where Catholicism and nationalism had been interwoven into the fabric of the new state. Even though many of us saw through the mind control and rejected it early on, it is still extraordinary now to look back and remember what it was like.

Memories of that time were brought back last week when a new book appeared here published by Veritas, the noted Catholic publisher in Ireland.

Anyone who grew up in Ireland in the 1940s, ‘50s and ‘60s -- and even later -- will remember the racks of Catholic Truth Society pamphlets in the foyers of Catholic churches all over the country.  These little booklets were designed to sooth the troubled minds of young Catholics at the time who might be having “problems of faith.”

The covers of more than 100 of these pamphlets -- which were striking because of their outstanding design -- have now been gathered together in the new art book titled Vintage Values which was published last week.   The titles of the pamphlets were unforgettable.
 
The Young Lady Says No!  What To Do on a Date?  Shall I Be a Nun?  Divorce Is a Disease!  Shall I Start to Drink?  The older generation of Catholics will remember them.

The booklet covers -- some of which you can see here -- were provocative, even faintly titillating.  They were designed to be “modern,” to catch the attention of the young faithful, promising to answer their questions about sexuality, spirituality and life in general.

Inside the covers, however, there was the same old conservative message, even if it was sometimes couched in language that tried to be liberal or even “hip”.  Many of the authors were priests, doing their best to be “modern” and usually not succeeding.

One of the most striking covers, The Young Lady Says No!, is on a pamphlet by a priest, Rev. Wm. P. O’Keeffe, C.M.  We’re not told on the cover what question the Young Lady was asked, but you can guess.  But Fr. O’Keeffe, in spite of being a male celibate, had no problem supplying the answer!

Another striking cover is Shall I Be A Nun? This one, believe it or not, was written by another priest, Rev. Daniel A. Lord, S.J.   Presumably Fr. Lord felt able to put himself into the mind of the girl on the cover to answer this question.

The same talented priest is also the author of What To Do on a Date?  Again, how is a celibate priest -- even a Jesuit -- supposed to know anything about what to do on a date?

But my favorite cover of all is on a pamphlet by another Jesuit, Rev. Martin J. Scott, S.J., titled Divorce Is A Disease!  He does not pull his punches with that title (even if, as a priest, we can assume he was never married and therefore knows nothing of any real value whatsoever about marriage or marriage failure and divorce).

The booklets kind of sum up everything that was presumptuous, arrogant and wrong about the Catholic Church in Ireland at the time.  Despite this, they were incredibly popular.  In 1951 alone, one and a quarter million pamphlets were distributed in Ireland, selling at three old pennies each.

Whatever about the message inside, the striking covers on the pamphlets clearly worked.

The best of these covers -- 117 high quality images with notes on the artists -- have been showcased in the new art book. Catholics of a certain age, including those who immigrated to the U.S., will get all nostalgic over them. But the book will also appeal to be those interested in graphic design and comic book art.

Bold, bright and vibrant, the covers rejected the usual symbols of Catholic nationalism in Ireland at the time -- Celtic interlace, shamrocks and harps — in favor of contemporary American showcard art and typography.

The artists who produced the covers were among the best commercial artists of the day in Ireland.  They were more in tune with popular visual culture in America at the time than with European design, and they were using that to get across the Catholic message.

It was a clever strategy by the church, using the same American poster style art to package its message.  It was battling against what it saw as the “scourge” of American and British influence coming into Ireland at the time from films, magazines, dance and music.

The Catholic Truth Society of Ireland, founded in 1899, produced the pamphlets from the 1920s to the early 1970s.  Was there anything like this in America?

A leap of faith by Ireland, the exit from the IMF/EU bailout

Finance Minister Michael Noonan.

Ireland is to make a clean exit from the IMF/EU bailout when we leave the program on December 15.  There will be no precautionary credit line negotiated with the European Central Bank or the IMF, no backstop, no insurance policy in case we get into financial trouble again in the months and years ahead. 

We're going it alone. It's a brave move and we can only hope that it's the right one. 
The decision not to seek a credit line came in a dramatic announcement by Taoiseach (Prime Minister) Enda Kenny in the Dail last week.  There is no doubt that the decision was based on political concerns more than on economic policy.

There were strong economic reasons why a credit line -- even if we never use it -- might have been a good idea.  Our ability to fund ourselves going forward after we exit the bailout program depends on growth in the Irish economy in the next few years and the absence of any nasty surprises, especially from the banks. Neither of these things is certain. 

Because we are an export-led economy, growth here is dependent on a sustained recovery in Europe and beyond, and that is far from guaranteed. We need a strong recovery in the global economy to increase demand for our exports.  If the European economy and the world economy limp along with little or no growth then we will be in trouble. 

The banks are also a real concern.  Our banks are still basket cases, and there is a European wide stress test for banks coming next year which could expose just how weak they are.  And because it's an EU stress test we won't be able to fudge the outcome.

There is a huge unresolved problem in our banks due to the number of domestic mortgages in crisis, and the number of people deep in negative equity after the property crash. 

The potential losses involved have never been crystallized on the books of the banks.  They have billions in property loans on their books which have not been written down to their current value.

So we have two major problems.  If the European economy fails to grow then our exports won't increase and the growth we need in the Irish economy to enable us to fully fund ourselves again, including making our debt repayments, won't happen.

If the banks are forced to admit the real level of losses they face on domestic mortgages and write down the loans accordingly, then they are likely to need another big capital injection to meet EU solvency standards.

At present they are ignoring the reality, hoping that if they delay long enough the property market will recover sufficiently to solve the problem for them.

So we face an extremely uncertain future in the next couple of years.  Things could pan out the way we want.  But they might not.

Even the government admitted last week that it had been "a finely balanced decision" not to seek a credit line.  I remember hearing Minister for Finance Michael Noonan just a couple of months back saying that it might be prudent to seek a backstop of around €10 billion.  So why did he change his mind?

Several reasons have been put forward.  We have built up a cash pile of around €20 billion in borrowings in the treasury piggybank here, enough borrowing to get us through 2014 and part of 2015. 

So when we go back to the markets in the next few months we could cope even if they decided they wanted us to pay penal rates and we decided not to borrow.  We can get through any short term difficulty.

Perhaps more important, the general economic picture in Europe at the moment is relatively benign in comparison with the chaos we saw over the past few years when several countries were on the verge of financial collapse.  So it's a good time to be leaving the bailout and going back into the markets to borrow under our own steam.  

In addition, we have shown an ability to cut spending and increase taxes to reduce the budget deficit, although we still have a way to go to get down to the three percent of GDP deficit that is our target and is the agreed maximum among the EU countries.

The reality is that we will have to go on borrowing for another few years as we balance the national books again.  The more we can grow the economy the more tax revenue will increase and the less tax hikes we will have to impose , which is why growth is so important.  But in the meantime we have to continue borrowing to keep state services going at an acceptable level.   

The signs are good, with our state bonds now back at reasonable rates, which indicates that the markets have confidence in us.  The government has been testing the water over the past year with small amounts of bonds being offered and taken up.  There is unlikely to be a problem when we go back into the markets in the coming months to borrow on a serious level.

All of these are reasons why the government decided that we didn't need a backstop.  They wanted to send out a clear message to the markets that we are back, and we are standing on our own two feet.  
They also wanted to avoid the strings that would have come with a credit line which would have meant ongoing conditions and extra oversight from the EU.

In particular, a few other countries were making noises about the tax regime we use to bring so many foreign companies in here, companies that might otherwise go elsewhere in Europe.   Rather than let anyone open that can of worms -- and to avoid a lot of other financial interference from Europe -- the government decided to avoid asking for backstop.

One can appreciate their reasoning.   But that does not diminish the potential for it all to go wrong. 
And if it does, we will have to go back to the EU and the IMF again for another bailout injection.  It won't be on a Greek scale, but it won't look good.  

So this "clean exit" from the bailout is a risk.  It's a risk we did not have to take.  And you might ask why the government choose to do so.

As we said above, the real reason is political, not economic.   Asking for a credit line and accepting the conditions that would have been part of that would have taken the shine off the government's moment of glory, the big success in getting us to the point where we are ready to exit the bailout on time.  

Instead of being able to declare that we are fully taking back our economic sovereignty on December 15, the government would have had to talk about the continuing external oversight of our economy that would have come with a backstop.  

Given what the Irish people have been through with the austerity program, it is vital for the government to be able to say, without equivocation, that it was all worth it because we are the masters of our own economic destiny again.  If they can get that clear message across, they have a chance of winning the next election, despite all the cutbacks and unemployment.

So you are going to hear a lot of triumphant speeches in the next few weeks as we exit the bailout.   But it is important that everyone realizes exactly what the exit means.

It does not mean that we are home free, that the economy is about to bounce back, or that we are now able to run the country without the massive borrowing that is still going on. 

It does mean that we are at the end of the program during which the IMF and the EU gave us billions so that we could keep the country going while we tackled the deficit.  The program gave us a few years of breathing space to get our finances under control and get the deficit down enough so that the markets would start to lend to us again.  (You will remember that it was the refusal of the markets to lend us any more funds that started the crisis.)  We are now at that point.

But it doesn't mean everything in the garden is rosy.   All the bailout money has to be paid back -- more than €65 billion euro of it.  

It's costing us billions in interest payments every year. That dead weight is going to be a heavy drag on any recovery here for at least the next 10 years. 

And remember that, apart from funding our budget deficits, a big chunk of the bailout money went to recapitalize the banks so that they could pay back all the foreign bondholders, even the unguaranteed bondholders.  The decision to repay all the bondholders and dump the cost on the ordinary Irish taxpayer was forced on us by the European Central Bank, with the support of the Americans, because none of them wanted to see any bank failures here that could spread elsewhere.

It was a terrible mistake, the scale of which is almost unimaginable.  We may be making a "clean exit" from the bailout.  But we will be paying for that mistake for years.

A temporary detour from ecomic issues to Irish soccer madness

Alex Ferguson with his new autobiography in Dublin last week.

There was plenty of heavy political and economic news here over the past week to do with the bailout exit, a new housing bubble in Dublin, property tax and other serious subjects.

But really there was only one show in town for the media.  All anyone wanted to hear about was Martin and Roy.

As Eamon Dunphy put it when asked on radio if he understood the rationale behind the new management duo for the Irish national soccer team, "It's show biz, folks!"

We all know what he meant.  Martin O'Neill, a former manager of Glasgow Celtic from Northern Ireland, on his own would have been a great choice.  But the addition of Cork-born Roy Keane lifted the whole thing on to a different level altogether because Roy is box office.

It's a pairing made either in heaven or hell, depending on how you look at it.  And it could go either way!  That's why the interest has been phenomenal.

The tension is palpable.   Was O’Neill mad to ask Keane, or inspired?  As the legendary Liverpool manager Bill Shankly once said, "Some people think football is a matter of life and death. I assure you, it's much more serious than that."  

They used to talk about the whiff of sulphur off Gerry Adams.   But Keane is truly explosive, simmering there in his sharp suit on TV football panels these days while viewers everywhere wait for him to go off, to say the un-sayable and then slap down any panelist who disagrees with him.  

As the legendary former Manchester United manager Alex Ferguson says in his new book, when Keane got mad with him "his eyes started to narrow, almost to wee black beads.  It was frightening to watch.  And I'm from Glasgow."  

O’Neill may think Keane will behave himself as his assistant.  But who knows?

So the incredible announcement that O’Neill was the new manager and that he had asked Keane to be his assistant and that Keane had accepted after just five seconds was the most serious news last week for a lot of people here.

An incredible 200 alleged journalists and over a dozen TV camera crews turned up for O’Neill’s press conference in the Gibson Hotel, a super-cool new hotel at the far end of the new financial area in Dublin's old docklands.  

The venue, all steel and glass and designer furniture, seemed to emphasize that this was big.   The ranks of the assembled sports writers, news reporters sent to do color pieces and social diary writers sent to see who might turn up, were infiltrated by football "officials" and followers, security men and gawkers of all kinds. It all got very One Direction when the press were kept in a holding area as O’Neill arrived and the officials rushed him into a private room.

God knows what it would have been like if Keane had been there too!  O’Neill emerged ten minutes later to face the press conference looking a bit sheepish and shook hands all round and was as thoughtful and affable as ever.

Mind you, the absence of the new assistant manager (at the Aston Villa game presumably watching Ciaran Clark) allowed the real journalists there to put a few hard questions to O’Neill about Keane.  And to be fair to O’Neill he did not dodge any of them -- for example, at the World Cup pre-training camp in Saipan in 2002, when Keane left the Irish team after a disagreement with manager Mick McCarthy, O’Neill said he thought Keane was wrong and should have got on with it.

And no, he doesn't expect Keane to change.  He wants that intensity, that insight.  "I expect that from Roy," he said.

As my mother used to say, I hope it stays fine for him.   Opinion appears to be somewhat divided here,  but judged by on street interviews and calls to radio, most of the real fans (the ones who actually understand the offside rule) think Keane’s arrival is great.

The most recent Irish boss, Italian Giovanni Trapattoni, had a controlled, defensive approach that sucked the lifeblood out of the Irish team.  The team badly needs that fierce determination, belief and even aggression that Keane brings with him.  That, and O’Neill’s shrewd management could be a winning combination.  

O’Neill was not the only football show in town last week.  Just up the road in the new Convention Center on the waterfront, Alex Ferguson appeared before a capacity crowd of 2,700 fans in a public interview to promote his new book.

Security was even tighter there, with fans warned to be in their seats half an hour before the event was due to start or they would not be let in. Tickets for the event had sold out in minutes a few weeks ago, crashing the Easons website even though they are the biggest bookstore chain in the country.

The place was a sell-out and the audience had paid €40 each for their tickets.  That's pretty steep for an event of this kind, but it included a signed copy of the book, and there's only one Alex Ferguson.   They could have charged far more and still filled the place.

What we got for our money (me and my Man United expert son and all the rest of the fans) was an hour-long question-and-answer session with TV presenter and Man United supporter  Eamonn Holmes.   In fact it ran into about 15 minutes of extra time, or Fergie time as we call it.

After nearly 27 years at the helm, Ferguson is well used to being on TV and being interviewed and holding press conferences.  He can handle hard questions ... but he didn't get any in Dublin.

He came into a raucous standing ovation which went on for minutes, and that set the tone for the evening as Holmes turned what should have been a proper interrogation into a love-in.

Fergie was relaxed and good humored throughout, with no sign of the hairdryer.

"I think when you grow older, you mellow," he said, although he did not really take back any of the heavy  tackles he landed on Keane in his book.

"It only went wrong in the last year," Fergie said, reminding the audience of how Keane had been "fantastic" for him for years as a captain, a leader and a motivator.

Ferguson had to let him go because Keane had complained that year about the pre-season training facilities in Portugal (shades of Saipan), refusing to join his teammates in the luxury accommodation there because he was unhappy about air-conditioning.  As Fergie told it, what was really wrong with Keane was that he could not accept that injuries and age had caught up with him.

And then when they got back to Old Trafford Keane had heavily criticized his teammates in an infamous MUTV interview that was never aired.

Fergie insisted he had no option but to let Keane go.

"I can't say it was wrong – it was the correct thing to do. That was a tough, tough call but I had to keep stability at the club right. I had to let the boys know you can't go around criticizing your teammates. There was no other way to deal with it,” Ferguson said.

What was really going on was that Keane was openly challenging Fergie, accusing Fergie at a team meeting called to view the disputed interview of letting personal issues affect his management of the club.

And that public challenge in front of his teammates was something that Ferguson, the master of control, could not tolerate.  That was something Holmes could have explored, but he failed to make the tackle.  

Mind you, Fergie also said that O’Neill’s choice of Keane as his assistant manager was a good decision and would be "terrific for Roy," who had gone into management very early and could learn lots from O'Neill.  Talk about being damned with faint praise!

Fergie is not often wrong.  We'll just have to wait and see whether he is right about this as well.

Meanwhile, Keane is due to face his first press conference as assistant manager in Dublin on Wednesday of this week.  And that's unlikely to be any kind of love-in.

Give Britain a break after decades of Irish emigration to the UK

Ryan Tubridy.

“It’s time we got over our history with the Brits,” says Ireland’s top chat show host Ryan Tubridy.

This columnist (wearing his books editor hat) had a fascinating chat with Ireland’s leading broadcaster last week, Ryan Tubridy.  Tubs, as he is jokingly known in the business since he is as skinny as a rake, is the young fogey who took over as the "Late Late Show" host a few years back, the hottest seat in the media in Ireland.

He also presents a morning radio show here, five days a week.  And he writes books.  As the old saying goes, if you want something done, ask a busy man to do it.

You may remember Tubridy’s first book, published in the U.S. in 2011 and recently out in paperback there, a superbly researched and beautifully written account of the Kennedy visit to Ireland in 1963 titled "JFK in Ireland: Four Days that Changed a President."  Tubs was over on your side of the pond a few weeks back doing "CBS This Morning" to plug it.

He has now written another book which is why we were talking last week.  Given his fascination with Kennedy and rumors recently that he was writing about the diaspora, most people had been expecting his new book to be about Irish America.

But the rumors were wrong.  Tubridy’s new book, "The Irish Are Coming," which is published in Ireland and the U.K. this week, is about the Irish in the U.K., not the U.S.

It’s not nearly as substantial as his JFK book.  But it’s an interesting read for particular reasons I will come to in a minute.

"The Irish Are Coming" is a book which profiles around 40 prominent Irish people in the U.K. who Tubridy in his introduction says “really did help to make Britain Great.” So it’s all about the contribution so many Irish people who went to live in Britain have made there over the years.

The book covers the Irish in Britain in various walks of life, the chat show hosts from Eamonn Andrews to Graham Norton, the comedians from Dave Allen to Dara O Briain, the actors from Peter O’Toole to Chris O’Dowd and lots of writers, politicians, builders and businessmen, as well as some Irish who served with distinction in the British armed forces.

All of them prospered in Britain, and Tubridy thinks it’s time we woke up to how welcoming the British have been to us for decades. “The book is a bit of fun, but there’s a serious message underlying it,” he told me, which is when our conversation really got interesting.

“We all know about the 800 years of oppression, but it’s time we got over our history and our traditional attitude to the Brits.  Most of us have moved on, but you still detect a reservation among some people,” he said.

“The fact is that the British have been very good to us over the years, giving us free access there and jobs. No visas or work permits needed, come and go as you please.  It was an important escape route from the miserable Ireland of the 1950s.  And they continued to do that over the years, even when the IRA were bombing British cities during the Troubles.”

Now with emigration high again, especially among the young Irish, Britain is still providing us with a way out, a chance to find work and build a life, Tubridy pointed out.  He feels strongly that we should be aware of that, instead of just taking it for granted.
He knows as well, of course, that at street level in some British cities there were sometimes difficult patches even though British government policy always kept the door open to us.

“We traveled in our droves there looking for work (in the 1950s and ‘60s) and plenty of doors opened for us on our arrival.  It wasn’t always pretty and it wasn’t without occasional borderline racism, but for plenty of Irish people it was Britain, not America or Australia, that proved to be their land of opportunity.  They helped us but we certainly made our contribution in return.”

Tubridy says his own family story kind of sums how much the British-Irish relationship has changed in just 90 years.  He is the grandson of Todd Andrews, who fought in the War of Independence, became a leading figure in the Irish business world and was the father of the former Irish Minister for Foreign Affairs David Andrews.

“I remember during the Queen’s visit to Ireland two years ago,” Tubridy told me.  “I was in the Gravity Bar on top of the Guinness Storehouse for RTE (Irish television) when she came up there.  Because it has glass walls and it’s so high up it’s one of the best places to see the city from.  My job was to point out the various landmarks you can see to the Queen.

“Looking across the city I realized I was seeing places where my grandfather Todd Andrews was shooting at British soldiers during the War of Independence.  My other grandfather, Sean Tubridy, was doing the same thing at the same time over in the West.  And here I was talking to the Queen. I had a sudden realization of the enormity of the moment.”

Tubridy is an avid amateur historian.  “I adore history,” he says. “I’m not that old, but even my generation were never taught about all the Irish who fought with the British in the First and Second World Wars. It was a taboo subject.  That is changing, thanks to Mary Robinson and Mary McAleese.

“One of my favorite stories in the book is about Brendan ‘Paddy’ Finucane who was one of the great RAF fighter pilot aces of the Second World War.  His father, Thomas, was in Boland’s Mill in 1916, fighting with de Valera.  But most Irish people have never heard of Paddy.

“We have to get to the stage where we see people like Paddy as heroes, fighting a noble war for the defeat of the Nazis.  There should be an equality of respect whether one died in the GPO or in Flanders,” Tubridy said.

“I think the Queen’s visit was a very significant moment in history for everyone.  It had a huge impact and I think it was very revealing as well.”

Tubridy says that his own children and their generation cannot comprehend what had been going on just a few miles up the road in the North during the Troubles.

“The hatred and the tit-for tat killings, it’s beyond their understanding,” he says.  “The old hatred or even dislike for all things British is also something they just do not get.”

Tubridy says he enjoyed his time working in Britain on BBC Radio 2 during the summer when he was on his annual break from his RTE shows.  He particularly liked being able to stroll around London and not be recognized by anyone, something he can no longer do in Ireland.

His time in Britain seems to have clarified his thinking about the close ties between Ireland and the U.K.  He set out to write this new book to pay tribute to the Irish who have done so well in Britain.

But it became more than that as he reflected on the unique bond between the two countries despite the long unhappy history.  His thoughts on all that are well worth reading.  

"The Irish Are Coming" is being published here this Thursday, November 7, and if you can’t wait for it to come out over there, you can always get it now via Amazon.

The Irish police had to take those Roma children

Gardai search the bags of Roma gypsies in Dublin earlier this year.

The clumsy handling of the cases involving the removal of two Roma children from their families in Ireland last week has brought an extraordinary level of criticism down on the heads of the Gardai (Irish police).  But the truth is that the Gardai were damned if they did, and could have been damned if they didn’t.

The cases of the two children taken from their Roma families followed the case in Greece where a blond, blue-eyed little girl, named Maria by the press, was removed by police from a Roma family living there.  That story, partly because of the still unsolved case in Portugal of missing Madeleine McCann, got massive coverage all over Europe, including Ireland.  People here and across Europe were wondering if the same kind of thing might have happened to Madeleine.

It’s probably not a coincidence that the two cases in Ireland emerged just a week after the Maria story broke in Greece.  The actions by the Gardai in the cases here were prompted by calls from the public.

In the case of the family in Tallaght, the big blue collar suburb on the west side of Dublin, a person contacted a TV station here (TV3) via Facebook to say there was a blond girl living with Roma parents in a house in the area.  The parents, like most Roma, are dark skinned with dark hair, as are the girl’s siblings.

The TV station then contacted the Gardai who went to investigate, were not completely happy with the answers they were given, and ended up taking the seven-year-old girl away from the family and placing her in care, pending DNA testing.

The second case, which was in the town of Athlone in the middle of Ireland, was similar. The Gardai were tipped off by a member of the public that a blond, blue-eyed child - this time a two year-old boy - was living with a Roma couple.

Again, after some investigation and questioning of the family, Gardai were not satisfied with the information they were given and they removed the child, pending DNA tests.

Both children were seized under the Child Care Act which allows Gardai to remove a child where there is an immediate and serious risk to the health or welfare of that child.

In Greece DNA testing subsequently showed that Maria was not the child of the Roma family she was living with, but she was the child of another Roma family living in severe poverty in Bulgaria who came forward after all the publicity.

The mother had been working as an olive picker in Greece when she either gave Maria away or sold her because she could not care for another baby and needed to get back to Bulgaria to look after her other children.

When the cameras descended last week on the hovel in the Roma camp outside the small town in Bulgaria where this woman and her nine other children live, they discovered something that made everyone here sit up and pay attention.  At least one other child in the family was blond.

Investigators said there was a blond or albino gene in the family bloodline and that the same thing, although not common, was also evident in other Roma families.
Sometimes the effect of the blond gene would skip a generation before becoming visible in a child in a family in which both parents and siblings had the typically dark Roma complexion and hair color.

In Ireland the DNA tests subsequently showed that the two children were the biological offspring of the respective parents.  The little boy had already been returned to the family on the advice of a social worker who knew them.

The little girl was returned to her family as soon as the test results were available.  The parents told reporters that there were other relatives who were also blond.

An outpouring of recrimination then started as immigrant and traveler support organizations here berated the Gardai and accused them of racial profiling.  This accusation was extended by other politically correct people into wider allegations about racism in Ireland and about how, as a society, we are far too quick to jump to conclusions about Roma people and our own travelers.

The spokespeople involved were full of outrage and self-righteousness.  Where was the evidence that there was “an immediate and serious risk to the health or welfare” of the children which is what the law requires before the Gardai can take them away?

Both children appeared to be well cared for. But that was not the issue here.  The issue was the suspicion that the children did not belong to the parents.

And the problem for the Gardai was that many Roma families move around between various countries in Europe.  The Gardai could have done some questioning and taken swabs for DNA testing but not taken the children away.

But suppose they had done that and while they were waiting for the results one of the families had vanished”  And if the DNA then showed that the child they had was not theirs, what then?
We would then have had headlines about how the incompetent Irish police failed to rescue a stolen child when they had the chance.  As I said, for the Gardai it was a case of damned if you do and possibly damned if you don’t.

Was there racism or racial profiling involved?  We don’t know yet, although an investigation here by our ombudsman for children is underway, with powers to question all those involved, including the Gardai.

But the assertion now being made that the Gardai should have totally ignored the obvious difference in appearance of the two children from the other members of their families is another example of political correctness gone too far.  The rights of a child, particularly a child who is possibly at risk, must supersede everything else.

Another flawed argument being put forward here is that since the Gardai only took away the two blond children and not their brothers and sisters, they could not claim that there was “an immediate and serious risk to the health or welfare” of the children.  If that had been the case, if the Gardai had decided there was a danger of physical or sexual abuse, all the children would have been removed, the argument goes.

But that also misses the point.  The danger to the “welfare” of the two blond children arose from the possibility that they had been taken from their natural parents somewhere else.
It also arose from the fact -- and it is a fact no matter what the politically correct say — that some Roma families in Europe have been involved in child trafficking, and that some Roma families force children to work as street beggars in the way that used to be common among Irish travelers.

To ignore that reality would be a mistake. It is the context in which the Gardai had to make a decision on whether to act.

Being aware of the wider context is not racist. Making assumptions in individual cases on that basis alone would be racist, and we do not know yet if that is what the Gardai did.

That said, the Gardai did not handle this matter well.  They could have talked gently to the families about wanting to reassure everyone, they could have taken swabs for DNA and they could have left the children in their homes with a police presence outside to ensure nobody vanished before the tests were complete.

In retrospect, that would have been a more sensible and humane approach.  But the national orgy of guilt and self-recrimination that is now underway in Ireland, led by the politically correct, is ridiculous.

The Gardai act to protect children, not to harm them.  We all need to calm down a bit and get real about this.

In that context, the comments last week by Michael Moran, the assistant director of Interpol’s Human Trafficking and Child Exploitation section in Europe, who is based in France and happens to be an Irishman, are instructive.

He said that the “migration habits” of many Roma people, and the involvement of some of those who move between Romania and Bulgaria and other European countries in theft and begging gangs, make them susceptible to human trafficking for exploitation purposes.  He referred to “the problem of organized street gangs, child street gangs, theft gangs, organized begging, forced marriages, child marriages within their (the Roma) community.”

Moran also warned against applying this to all Roma people in a racist manner and said that the Roma community themselves were working to stop this kind of activity.  It is important that assumptions are not made about all Roma simply because they are Roma.

There are now estimated to be over 5,000 Roma living in Ireland, most of whom have arrived since 2007 when Romania and Bulgaria joined the EU.  Many of them are now settled permanently in housing here, with children in school.

But there is still a problem with some Roma here who are involved in begging, shoplifting, theft and other activities.

You may remember the notorious case four years ago of the Rostas clan of up to 100 people who were discovered living in squalor in the middle of a big roundabout on the M50 motorway that encircles Dublin. The conditions for the women and children in this camp, which was invisible in the middle of the overgrown trees and bushes on the roundabout, were appalling.  They were being brought into the city every day in vans by their men to beg.

They were all eventually deported, and cleaning up after them was a major operation.  But many of them subsequently came back and their leader, Barron Rostas, rented a house in the inner city to house them, from where the street begging operation continued.

Gardai estimated the operation was making several thousand euro a week, and they began an investigation when it was discovered at one point that Rostas had wired €40,000 ($54,000) back to Romania.

That begging operation is still going on, and the current estimate is that there are at least 60 Roma from this clan and other families begging on the streets of Dublin every day -- women and children, because the men do not “work.”

The lifestyle of some extended Roma families or clans -- as with some Irish traveler families — is difficult for settled society to accept and live with.   In France, they have deported thousands of Roma back to Romania and Bulgaria in recent years due to the problems they were creating.

In some German cities a lot of the prostitution is carried on by Roma women from Bulgaria.  In other European countries, particularly in tourist areas, Roma clans have proved a problem due to aggressive begging which often culminates in bag snatching or other forms of theft.

Life can be very cheap when people live in the abject poverty we saw when the cameras visited the Roma camp in Bulgaria where Maria’s real family lives.

Embarrassed by the conditions seen by TV viewers around the world, the Bulgarian authorities have now taken two of the nine children in the family into care, and it seems very unlikely that Maria will be returned to them.

Here in Ireland, the Gardai need to be very careful never to act on the basis of racial profiling.  But particularly in cases where children are involved, never investigating is never going to be an option.