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Full banking inquiry a potential minefield could politicians rise above takling sides?

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World of Politics with Harry McGee – harrymcgee@gmail.com

That was a sensational scoop in the Irish Independent on Monday. Newspapers love nothing better than unearthing secrets and all the better when it is a tape, especially one that is candid and self-incriminatory.

Viewed through the prism of today, there is little in the conversation between the two senior executives from Anglo Irish Bank that is surprising. That is knowing what we know now.

But it is clear that those within the failed Irish bank knew then what we only know now.

I heard people getting outraged on Joe Duffy’s show on Tuesday about the fact that the two fellows were cracking jokes. I actually have no issues with that. It was a private conversation between two colleagues. If you listen carefully to the tone and tenet of the conversation they both realised that the company was in the soup. It was a bit inappropriate, it was a bit of gallows humour. And if you excuse my contradiction of the previous sentence as I mix my metaphors, it wasn’t really a hanging offence. Ok, the laddish quote to the ‘Drummer’ (then chief executive David Drumm) and pulling a figure out of his ass was inappropriate. But it wasn’t that big of a deal.

What was really striking to me was that both knew that the game was up. In the last sentence of the transcript (which I urge you to read in full, it’s on the independent.ie site and also on the irishtimes.com site) there is an admission that the bank is a goner and can’t survive. One of the two is prescient when he says the only solution is for the bank to be broken up or be nationalised. It was as stark as that.

It’s clear from the gist of the conversation that both knew deep down that all of the other Irish banks were so reputationally damaged and  weakened (Bank of Ireland might be big here but was a ‘minnow’ in the bigger world) that they were in no position to buy Anglo and, indeed, were in trouble themselves.

What was also intriguing is that they also knew at the time that €7 billion was not enough. They said if the Central Bank was willing to cough up that amount of money it would have “skin in the game” and would cough up more. In other words, the Central Bank would have no choice but to invest much more (and we know the eventual figure came to a staggering €40 billion) in order to protect its initial investment of €7 billion.

The transcript, with its mixture of macho bravado and uncertainty, reads like the script of a David Mamet play (he’s the guy who wrote the seminal play and film Glengarry Glen Ross). There’s even a hilarious parody of the hapless financial regulator Patrick Neary. One of the two mimics Neary’s nervous search for reassurance as he was told that the Central Bank would have to stump up €7bn. Neary championed the now discredited light touch or principle-led regulation of the banks and was unaware that a crisis was about to befall Irish banks until caught in the headlights of the juggernaut bearing down on him.

There are two major political issues that arise from this disclosure. The first is how much of this knowledge was shared with the Government on the famous night of the guarantee in September 2008. All accounts of that fateful meeting seem to suggest that the problem was presented by the banks – including Anglo – as a liquidity problem but one that could fell all the banks if it was not sorted.

It’s clear that Anglo and others were economical with the verité as they obviously knew much more than they pretended and knew that the problems were graver and more systemic and – most probably – unrecoverable.

For more, read this week’s Connacht Tribune.

Connacht Tribune

Housing policy can make or break Fianna Fáil’s future

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Faded glory...the Corrib Great Southern Hotel.

World of Politics with Harry McGee

When you approach Galway City from the east, you come across it as soon as you clear Merlin Park – standing out like a sore thumb; a sentinel warning us that buildings like humans fall victim to the ravages of time and to fortune.

The Corrib Great Southern Hotel is the city’s biggest eyesore and has been for many years. It’s a huge hulk of a building; vacant for many years, heavily vandalised, its windows smashed or boarded-up, its once-pristine grounds now overgrown.

Built in 1970, it’s long way away from its heyday when, in an era of optimism, it became the CIE-owned Great Southern Hotel Group’s most modern hotel.

We were kids when it was operating fully and it seemed to be thriving, as a hotel, wedding venue and for dinner dances.

All of that seems a long time ago now. The hotel has been vacant for a hell of a long time (since 2007) and in a way has become a symbol of Galway’s housing crisis.

All the more so because it stands across a roundabout from the gleaming new Garda headquarters and also the wonderfully revamped GMIT.

It’s been due for demolition for a long time and has been on the derelict site register since 2015 – but no action has been taken despite statutory orders on the registered owners.

In one way, the hotel is a symbol of the inertia of successive governments in tackling the housing crisis in Ireland. The inaction in relation to it is replicated across the board in Galway and in all other Irish counties.

The roots of the current housing crisis have its beginnings in the Celtic Tiger years when local authorities stopped developing their own housing and left it to the private market.

A big part of the strategy was Part V housing, where developers had to earmark ten per cent of all new developments for social housing.

The second hammer blow was the recession. When the money ran out after 2009, one of the first casualties was capital funding for housing.

For more, read this week’s Connacht Tribune.

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Connacht Tribune

Labour’s awakenings will take time to reap any real reward

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Passing of the baton...Michael D Higgins with his successor Derek Nolan at the Galway West count at Leisureland.

World of Politics with Harry McGee

The film Awakenings was based on the experience of the psychiatrist Oliver Sacks with patients who had contracted a disease called encephalitis lethargica during and shortly after World War I.

Thousands contracted it around the world. How they got it has remained a mystery but it could have been connected to the Spanish Flu outbreak at the time.

It essentially left them in a catatonic state, sleeping, unmoving, like zombies for decades. By the time Sacks came across a group of them in New York, they were all residents of an institution called the Beth Abrams Home for the Incurable.

That did not leave much to the imagination. Some of these people had been essentially sleeping for over 40 years.

He experimented with a drug called L-dopa, which had been used successfully for the treatment of Parkinson’s Disease.

The effect was extraordinary; the drug was like an electric shock that jolted the patients back to life and to sentient existence.

The ‘miracle’ had its drawbacks, however. After a while, it became difficult to control the patients as they became increasingly manic. Ultimately a tough decision was taken to withdraw the drug and the patients relapsed into their catatonic states.

All of that is a bit of a stretched way of saying ‘flash in the pan’, but life sometimes teaches us that success can be very temporary indeed.

There is a long pattern in Irish politics, for example, of a winner in a by-election going on to win a seat in the subsequent general election. However, less than six months after winning a by-election in Wexford, Malcolm Byrne of Fianna Fáil got turfed out in the general election.

Look at it the other way. Sinn Féin were the big losers of the 2019 local elections but turned the ship around completely less than nine months later. The lesson to be learned is success or failure is never a permanent phenomenon in politics.

For more, read this week’s Connacht Tribune.

Connacht Tribune Digital Edition App

Download the Connacht Tribune Digital Edition App to access to Galway’s best-selling newspaper.

Click HERE to download it for iPhone and iPad from Apple’s App Store, or HERE to get the Android Version from Google Play.

Or purchase the Digital Edition for PC, Mac or Laptop from Pagesuite  HERE.

Get the Connacht Tribune Live app
The Connacht Tribune Live app is the home of everything that is happening in Galway City and county. It’s completely FREE and features all the latest news, sport and information on what’s on in your area. Click HERE to download it for iPhone and iPad from Apple’s App Store, or HERE to get the Android Version from Google Play.

 

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Connacht Tribune

Changing political landscape fast becoming Double Dutch

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Big winner...Ivan Bacik after her by-election victory.

World of Politics with Harry McGee

Holland is so used to enduring a perennial political log-jam – where every election just digs you deeper and deeper into a rut – that they’ve actually come up with their own name for it.

It’s called Dutchification – when society has become so urbanised, and globalised, and fragmented, and lacking cohesion, that no party, or parties, can expect to win any more.

The former RTÉ journalist Peter Cluskey wrote a very interesting article last week about this continued electoral limbo they have in Holland, where he’s been based for many years.

And truth be told, the same is happening here; the day of overall majorities is long gone.

We have gone from having two large parties to having three medium sized ones (and with the demise of Fianna Fáil it could even by two medium sized ones, or one large and one medium).

The reality is that it will be difficult for the foreseeable future for any two parties to form a coalition, and it could be difficult for any three parties to do the same.

The old fealties to the three long-established parties have been blown out of the water.

The biggest pool of voters now has no permanent loyalty. They are the floaters.

And there is a growing ‘none of the above’ contingent too, possibly spurred on by the cynicism, empty populism and downright lies, of social media.

They will vote for a party that opposes the government. And once that party they support goes into government, they immediately withdraw their support for it. Short of coming up for an elixir that guarantees everlasting joyous life, these voters will never support a party in government.

I know it sounds cynical but if you talk to enough people around the country – as I always try to do – the person with a deeply cynical disposition and a hate of politicians is no longer a rarity.

Sinn Féin is the growing party at the moment and – from this vantage point – looks like it will be in government for the next spin.

For more, read this week’s Connacht Tribune.

Connacht Tribune Digital Edition App

Download the Connacht Tribune Digital Edition App to access to Galway’s best-selling newspaper.

Click HERE to download it for iPhone and iPad from Apple’s App Store, or HERE to get the Android Version from Google Play.

Or purchase the Digital Edition for PC, Mac or Laptop from Pagesuite  HERE.

Get the Connacht Tribune Live app
The Connacht Tribune Live app is the home of everything that is happening in Galway City and county. It’s completely FREE and features all the latest news, sport and information on what’s on in your area. Click HERE to download it for iPhone and iPad from Apple’s App Store, or HERE to get the Android Version from Google Play.

 

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