Following the announcement at lunchtime today by An Taoiseach, Brian Cowen, that the eagerly anticipated general election will be held on Friday 11th, March 2011, attention will inevitably turn to the composition of the new government and a particular interest on here is the identity of the new Minister for Finance and the new administration’s attitude towards NAMA.
The new Minister of Finance will operate the powerful (some would say draconian) provisions of the Credit Institutions (Stabilisation) Act (“the Act”) and remember four banks face challenging capital raising targets in the next six weeks. In particular the new MfF might be at the centre of determining Bank of Ireland’s future – that bank has now less than 40 days to raise €1.5bn and seems to have been flouncing around in recent days unsuccessfully trying to secure an extension to the 28th February deadline for bringing its Core Tier 1 capital up to 12% and now apparently trying to devise some scheme to allow State injections which wouldn’t result in State control.
The Act was passed just before Christmas having unusually prompted the President to convene a Council of State to consider the provisions of the Act in the context of the Constitution. The Act had a very public demonstration at the AIB court hearing which was ironically held in private, protesting journalists and interested parties having been kicked out of the court room by a judge who claimed she was following the new provisions of the Act. The new MfF will indeed wield great power for the restructuring of the banking sector in 2011 and 2012.
Below is a table showing the present composition of the Dail and recent opinion polls (and the results of the Donegal South West bye-election).
(click to enlarge)
At this point the betting would be that the new administration will be FG/Labour with Enda Kenny as Taoiseach and Labour contributing a MfF which would naturally be Joan Burton. The odds given by Paddy Power for the next administration are as follows:
FG/Lab 1/20
FG Minority Government 12/1
FG Majority Government 16/1
FG/FF 16/1
FF/FG/Lab 16/1
FF/Lab 18/1
Lab/SF/Green 28/1
Technocratic Government 33/1
Lab/SF 33/1
FG/Lab/Green 33/1
FG/Lab/SF 50/1
Labour Minority 50/1
FF/Green/SF 66/1
FG/Green 66/1
FF/SF 66/1
FF Minority Government 100/1
You would have to say that next MfF is likely to be either Michael Noonan or Joan Burton though Pearse Doherty, Brian Lenihan or a Green politician are theoretical possibilities.
This blog is impartial for the time being on this election campaign. Plainly serious mistakes have been made by the incumbents but it is the privilege of Opposition to avoid detailed policy statements during the term of the government of the day. However in the run-up to the election these alternative policies should be teased out and tested. Expect comment and criticism of proposals on here regardless of their source.
With respect to NAMA, neither FG nor Labour has signalled radical changes at the agency. Perhaps we will get better transparency but at this stage I would not expect any major change in direction, but that might change – I note banker Peter Mathews is contesting a seat for FG and he is on record as calling for the reversal and effective abolition of NAMA. Labour has indicated that there would be a tougher line on spousal transfers and developer salaries. Labour has also been delving into conflicts of interest.
Sinn Fein has said that it would scrap NAMA. The Greens and Fianna Fail’s position seems established and would continue with the status quo.
And regardless of the composition of the new administration, the officials at the Department of Finance won’t change and I note that the NAMA Report and Accounts for Q3, 2010 which were delivered by NAMA to the Department of Finance on 31st December, 2010 still have not been published. Plus ca change!
NAMA Wine Lake 
987 days into ‘Biffo the Clowns’ reign and despite all the shenanigans in the last few days we have a date (even though its seven weeks away), we finally have a date.
Please take a look at the film below of Brian Cowen as Fatty Arbunkle and Brian Lenihan as Buster Keaton. They were made for each other.
Well it looks like we’ll have eight weeks of selections, “I stand on my own record”, kissing babies, vandalising ESB poles, “can I count on your vote”, a televised debate, “time for change”, loudspeakers atop Mondeos, “let’s get the country back to work”, no cemetery opportunity left unturned, “an end to elites/clientilism/cronyism”, rosettes and new beginnings – eight weeks of it!
I think we’ll all get pretty bored on here with personal attacks on politicians, as entertaining as they sometimes are and God knows we have earned the right to extract some value in that area.
But there will be important documents and exchanges and policy positions. And accepting that the incumbents were at the tiller when an unstable economic boom developed with poor regulatory supervision of key institutions and anything but surefooted handling of the ensuing crisis, the Opposition have to an extent escaped the scrutiny of real-world testing of their alternative policies. We are still in the eye of the storm, our banks are anything but stable with creaky capital bases and ongoing deposit flight. Add to that the potential to revisit the terms of the IMF loan (not the interest rate but the duration) and the EU/bilateral loans (all the terms including interest rates). And of course NAMA is slap bang in the critical phase of its life as it manages the loans it has acquired. Transparency, strategy, policy on transfers/salaries/debt pursuit. There are a lot of areas where I look forward to hearing what the politicians propose. They have real power in some areas and we deserve clear proposals and policy positions. I hope we can concentrate on these economic policies on here, particularly those that relate to NAMA.
NAMA is a symptom of a disease. It is important to keep a close eye on it, and in that endeavour you’re doing a great job, but it can’t be treated in isolation. It has to be examined and dealt with in the overall context of the disease.
The disease is that Ireland is riddled with corruption and cronyism. Combined with a very large public sector and a long history of State involvement in the private sector, this can be lethal. Every liberal democracy has some level of corruption and cronyism but Ireland is ‘off the charts.’ There’s an inverse correlation between this disease and economic success.
There’s no difference between the main parties except perhaps that FF were better at ‘it.’ This means that there’ll be no real debate about the symptom or the disease. Unless something radical happens, there’ll be no substantial improvement after the election.
I realize this may seem bizarre, but I genuinely believe that the most expedient way to put Ireland back on ‘the straight and narrow’ would be 5-10 years under a right wing dictator. I can now see why a large segment of Spain still admire Franco.
@ Frank,
I think you may be sadly deluded if you think a benevolent dictator (Left or right) will make your life & our society better.
I can not recall a glorious period where such, a society and freedom has existed.
Checks and balances, transparancy – a meritocratic society is what is needed. Where equality is valued and everyone has the right and chance to participate. There is the responsiblity on the individual, and the duty of society to protect.
Not Ireland then @Simon where we have nepotistic political dynasties on both sides of the house. Which results in the sons (or daughters) of previous political generations elected to the Dail not on merit but on name.
We need to reduce the number of TDs by more than 50% to 80 and an elected Seanad of 30 members. And then we need to do something that the Irish people have avoided since the foundation of the State. We most hold those in elected office accountable for their actions.
Only then will we have even a sniff of a chance at decent Government in this country. Btw as much as I detest the incumbent government I cry a little at the thought of Joan heading off to negotiate on my and your behalf to the EU/IMF.
@ Banama,
I don’t dispute your feelings on our republic, but lets through the baby out with the bath water. How we let the system run is our , the citizens fault.
We the people need to demand of those we elect. if I am not mistaken the floor is available for such a movement & moment.
It doesn’t take a genius to know that we will end up with a FG/Lab coalition and that Michael Martin will lead what’s left of FF.
The real questions are:
Will the new government default (a rose etc..)?
Who is going to be sent to the EU/IMF to repudiate the bailout and give the finger to the bondholders?
What’s in the new NAMA legislation?