Archive for October, 2012

“NAMA and IBRC are actively engaged in reducing their respective portfolio of debts and debtors. They are not in direct competition with each other for customers and resources. The board of NAMA and the IBRC actively monitor all cost headings and are driving efficiencies and substantial savings through their procurement processes. Due to funding and operational considerations it is not considered appropriate to merge the two agencies at this time” Minister for Finance Michael Noonan responding to a parliamentary question on 18th September 2012

The IBRC top team turned up before an Oireachtas committee this morning and the headline might be that current estimate that the ultimate cost of Anglo Irish Bank will “only” be €25bn but that is in the range that has been understood for over two years – examples here and here. Mike Aynsley and Alan Dukes have said on numerous occasions in the past, as has Minister for Finance Michael Noonan, that the ultimate cost of Anglo will be €25-28bn, so a €25bn estimate today is hardly news though it is welcomed that it is at the lower end of the range previously provided. Alas, we received little information during the hearing which might validate the forecast, though we do know the eventual outturn will depend on the performance of the economy and property markets in particular.

But the IBRC team did complain that staff were being poached by state agencies and others.  This is an issue for IBRC as it sets salary levels. Although not specifically referred to, NAMA is in the same business as IBRC and is a state agency. But Minister Noonan said in response to a parliamentary question from the Sinn Fein finance spokesperson Pearse Doherty on 18th September that there was no competition between IBRC and NAMA for “customers and resources”. This wasn’t credible on 18th September 2012 and indicates Minister Noonan doesn’t understand the work of NAMA or IBRC.  Merging NAMA and IBRC through the issuance of more NAMA bonds would save this State well over €100m operating costs per annum, would improve performance of NAMA and IBRC through avoiding dysfunctional competition and by having one agency across all loans to the same debtor at both agencies.

The full parliamentary question from Deputy Doherty was

Deputy Pearse Doherty : asked the Minister for Finance the consideration that has been given to the merger of the National Asset Management Agency with the Irish Bank Resolution Corporation; and the scope for reducing competition between the two State owned entities for resources and customers, and potential savings to the combined annual operating costs of €400-500million. 

Minister for Finance, Michael Noonan:  NAMA and IBRC are actively engaged in reducing their respective portfolio of debts and debtors. They are not in direct competition with each other for customers and resources. The board of NAMA and the IBRC actively monitor all cost headings and are driving efficiencies and substantial savings through their procurement processes. Due to funding and operational considerations it is not considered appropriate to merge the two agencies at this time.

Read Full Post »

On this side of the Border, the mega property auctions held by Allsop Space are going to get megaier with 200 Lot auctions expected in 2013, the catalogue will be available on Monday next 6th November, 2012 for the next auction which will be held in the Shelbourne Hotel in Dublin on 4th December 2012. But in Northern Ireland, Osborne King is building up its auction business and on 23rd November, 2012 there should be 36 properties on offer on behalf of receivers, administrators, mortgagees, financial institutions and private clients – the auction catalogue is here. The 36 properties  are spread across the six counties in Northern Ireland and have a total maximum reserve of just under GBP 2.4m (€3m).  The properties are a mixture of residential, commercial and development. A key difference between Allsop Space and Osborne King is that Allsop Space will not sell properties before the auction itself, whilst Osborne King will.  By Northern Ireland standards, the auction of 36 properties justifies the characterisation of “giant”

Read Full Post »

During the Christmas 2004 tsunami in Asia, it was remarkable that there were so few mass animal deaths, and there is a long-held belief that animals can sense disaster ahead of human beings.  Likewise, banks with their fingers on the pulses of households’ and businesses’ financial performance and prospects might be expected to have an unusually perceptive grasp on the economy; with a pattern emerging of banks exiting or considering exiting the State, this doesn’t augur well for our medium term economic prospects.

Next week we should get the Q3, 2012 results from Belgian-owned KBC bank which just a few weeks ago was strongly protesting that it didn’t have plans to exit from the Irish market. Industry speculation however is that KBC has had a lousy Q3,2012 in the Irish market and that its residential mortgage book in particular continues to deteriorate at an alarming rate. Insiders thought there was something of the bank “protestething” just a little too much recently, and that a partial or total exit may also be on the cards. The single reference to Ireland in KBC’s presentation to analysts on 8th October 2012 was noted with curiosity by some.

Towards the end of last week, there was unverified speculation in Dublin that Ulster Bank, owned by troubled British banking giant, Royal Bank of Scotland was considering an exit from the Irish market. Ulster Bank has already been flogging loan portfolios in an obvious bid to reduce its exposure in the Irish market, but the fear is that a more substantial action is afoot. Nothing came of the speculation, but the bank’s actions will be scrutinised closely in future, to see if a more radical exit is on the cards.

Today however, we actually get a definite announcement. Danske Bank, whose local bank brands are called Northern Bank in Northern Ireland and National Irish Bank in (the Republic of) Ireland, has published its Q3,2012 results which continue to show severe deterioration in its Irish loan book, though the pace of decline has eased. Danske has announced today that “the non-core Ireland portfolio will be divested” Looking through the Danske Irish financial statement for Q3, 2012 it looks as if there’s about €3bn of non-core lending in Ireland plus €2.5bn of core in the Republic and €4.8bn in Northern Ireland. There are €1bn of non-core deposits and €2bn of core deposits in the Republic and €5bn in Northern Ireland. So today’s announcement represents a major disposal though we await details of how and when the disposal will be made.

Bank of Scotland (Ireland) and Halifax are already in the process of running down their Irish loans, partly using the asset manager Certus. This follows the announcement of the exit from the Irish market of the two Lloyds-owned units in 2010.

ACC Bank, the Irish unit of Dutch-owned Rabobank said in June 2012 that it had no plans to exit the Irish market, this despite running up four years of losses, and needing a bailout of €930m from its parent operation in Holland.

We will shortly get mortgage arrears data from the Central Bank for Q3,2012 and for the first time should get detailed information on Buy-To-Let mortgages alongside the traditional data on Owner-Occupier mortgages. BTL is especially expected to show signs of crisis, the picture with Owner-Occupier mortgages is less clear with a slowing-down in the rate of deterioration recorded in Q1 and Q2, 2012. Commercial property continues to decline at an annualised 10% and it may be too early to claim the residential market is stabilising. Unemployment remains elevated at close to 15% and economic forecasts for 2012 and 2013 are trending downwards.

Maybe some banks do have a sixth sense.

Read Full Post »

He may be down, but he’s not out.

Having lost a marathon court battle with the billionaire Barclay brothers in London’s High Court this year, having giving NAMA a bloody nose in a judgment which was ultimately reversed in a superior court and amid recent reports that he now faces a legal fees bill of €25m, you might have thought you had heard the last of Paddy McKillen.

But he’s back!

Today the British Court of Appeal granted leave to Paddy to appeal against the decision by British High Court judge, Judge Richards on 10th August 2012 which saw Paddy comprehensively lose his challenge to David and Frederick Barclay buying €800m of loans from NAMA that are secured on the Maybourne group of London hotels – Claridge’s, the Connaught and the Berkeley – a loss to Paddy that might enable the Barclays to foreclose on the loans and deprive Paddy of control over the hotels. In addition, the British High Court decision bizarrely concluded that the Barclays’ acquisition of loans secured by Derek Quinlan’s shares in the Maybourne group didn’t constitute a disposal of Derek’s shares which would have given rise to Paddy having first right of refusal on Derek’s shares. As things stood before today, Paddy’s prospects for keeping control over the hotels were not looking good.

But the appeal offers a ray of hope to the Belfast-born developer and businessman. The appeal court has directed that the matter be heard within five weeks because it “concerns the entitlement to a significant stake in the ultimate owner of very substantial assets “ and because “of the owner’s financial circumstances” The consent for the appeal refers to Paddy’s skeleton arguments but these are not available on here at present. The NAMA angle in this case appeared to have been settled in June 2012 when the UK’s appeal court held that NAMA’s disposal of the loans was not in breach of the assigned contractual agreement relating to the loans, but absent the skeleton argument, we don’t know if the NAMA involvement might be re-opened. Paddy hasn’t apparently reacted to the recent news that NAMA’s asset manager Paul Hennigan – who along with John Mulcahy, gave evidence at the marathon High Court hearing this year – apparently shared an offer from a Malaysian concern named Wynton with the Barclays’ representative.

Back in 2010, Paddy comprehensively lost his challenge to NAMA in Dublin’s High Court where he was trying to stop the Agency acquiring his loans. But that comprehensive loss was turned into a score-draw with an appeal by Paddy to the Supreme Court and given NAMA’s subsequent decision to not acquire most of Paddy’s loans and to pay his legal expenses, you might regard Paddy’s outcome from his battle with NAMA in the Irish courts as a victory. No doubt, Paddy will now be hoping for the same pattern to be reproduced in the British courts.

The British Court of Appeal decision today is available here.

Read Full Post »

Readers of the Phoenix magazine (available here with subscription) are treated in the current issue to a centrefold advertisement by John Corcoran, the owner of Korky’s shoe shop on Grafton Street in Dublin who has been locked in a legal battle with his landlords for several years. The advertisement takes the form of an open letter to Minister for Finance Michael Noonan challenging the decision announced by Minister Noonan in his Budget 2012 speech last December 2011 to abandon promised changes to Upward Only Rent Review provisions in leases created before February 2010. The open letter is accompanied by legal commentary from barrister and judge Gerard Hogan, whose views conflict with those of the Government and who appears to conclude that imposing changes on UORR leases would not be at odds with the Constitution.

There hasn’t been any response from Minister Noonan to the open letter, but in the Dail this week, the Sinn Fein spokesperson for Enterprise Jobs and Innovation Peadar Toibin asked the Minister for Justice Equality and Defence Alan Shatter to outline “steps or proposals under active consideration” in respect of reforming UORR leases. In his response the Minister did not allude to any “steps or proposals under active consideration” and appears to draw a line under the issue with last year’s announcements.

However the Minister does say that “NAMA is playing a role in dealing with problems caused by upward only rent reviews applying to NAMA properties, and since the start of the year has approved cumulative rent reductions of over €6 million” We previously learned that NAMA is approving practically all applications made to it to reduce rents, though there have been exceptions. €6m is a major reduction in income to NAMA though Minister Noonan has previously said that the long term survival of businesses in their commercial tenancies will more than offset any short-term reduction in income to NAMA. Given that NAMA has approved about 150 rent reductions, the €6m cited by Minister Shatter equates to an average annual rent reduction of €40,000.

Somehow I get the impression that we have not heard the last of the push for UORR reforms.

The full parliamentary question and response are here.

Deputy Peadar Tóibín: asked the Minister for Justice and Equality the steps or proposals that are under active consideration by him to address the issue of the operation of upward only rents.

Minister for Justice and Equality, Alan Shatter: The primary responsibility which I have in relation to this matter relates to possible legislative intervention to ban upward only rent reviews in existing commercial leases. The Deputy will recall that following extensive consideration of this matter, the Government announced in December last that it had decided not to proceed with such legislation. There was a substantial concern that any legislative scheme involving interference in the contractual relationships of private parties would find it extremely difficult to survive a Constitutional challenge. In addition, the Government was advised that any model proposed would require the payment of compensation to landlords whose rights were infringed in order to ensure that the proposal would be compatible with the Constitution and with the European Convention on Human Rights. The Government was strongly of the view that payment of compensation to landlords in such circumstances could not be justified in the current economic climate.

Although legislative intervention may not be feasible, NAMA is playing a role in dealing with problems caused by upward only rent reviews applying to NAMA properties, and since the start of the year has approved cumulative rent reductions of over €6 million. I would also mention that I have commenced the Property Services (Regulation) Act 2011 which, amongst other matters, provides for the establishment and maintenance of a Commercial Leases Database by the Property Services Regulatory Authority. This Database will assist in providing readily accessible, accurate information in order to determine the market rent payable in respect of comparable commercial properties. Work is underway to ensure that the Database will be operational at an early date.

Finally, I wish to highlight the existence of a rent review arbitration code which was drawn up by a group of experts whose membership was drawn from all stakeholders in the commercial property arena. The code, which can be found on http://www.justice.ie, provides a mechanism to deal with the resolution of rent review disputes in the commercial property sector.

Read Full Post »

One of these fine days, RTE news is going to come a cropper with its liberal use of the word “murder”. Remember the tragic death of journalist, Eugen Maloney on Camden Street in Dublin in June 2012 when RTE reported the death as murder? Four months on, and there is a trial where the accused faces the charge of manslaughter. Where would RTE be if the accused’s lawyer claimed his client couldn’t get a fair trial because the national broadcaster had described the death as “murder”? RTE is not alone in this practice, and the print media also reported the death as “murder” but somehow, our publicly funded broadcaster should be held to a higher standard. It is one of the very few faults in RTE news, and it almost comes as a surprise to conclude on here that RTE is actually quite good, with generally clear and reliable reporting of the events of the day. Yes, there have been a few blips like showing the “Georgia” that was invaded by Russian/southern Ossetia in 2008 as Georgia USA on a map, but speaking as a consumer of RTE news, overall it is quite good.

The same can’t be said about RTE’s current affairs and it won’t have escaped your notice that TV current affairs is being revamped under the tutelage of Kevin Bakhurst, the BBC man who came on board at RTE in September 2012 in the wake of the clearout and fallout from the Fr Kevin Reynolds scandal. The Week in Politics, which is the by far the best current affairs offering on RTE in my view, will in future be broadcast at lunchtime on Sundays with an evening repeat. Whether this allows the flaghship politics programme, fronted by Sean O’Rourke, to adequately assimilate the contents of the Sunday press remains to be seen, but there is no reason why the programme shouldn’t continue to provide first-rate reporting and analysis of the political scene – a “scene” that is all important in Ireland with the State owning banks and most media organisations, or at least the debts therein.

There are changes afoot also at the Frontline and Prime Time strands at RTE. And about time too. They stand out as godawful programming, oftentimes with the production standards you would associate with a community college media project. Characterised by lack of research with little fact checking, unchallenged claims from participants, poor topic selection, programming which at times seem to break RTE’s own producer guidelines, incoherent with a failure to deliver a story to its audience, hectoring interviews which glean nothing for the audience all thrown together with expensive graphics and sound which at times veer from MTV video to horror movie soundtrack, but add little to the understanding of the topic at hand.

Although both strands have generated programming of note and of value, both are generally awful and so it came as no surprise that these two strands were facing revamps also. To date, little has changed – someone seems to have stuck a 5v electrode in Miriam O’Callaghan’s bra and she now seems to jerk her upper body every few seconds, perhaps to confer the impression of life to proceedings. Pat Kenny has been recruited to Prime Time where his hectoring has so far extracted little in the way of hard information from interviewees. George Lee is a welcome addition to the strands for his economic gravitas. Clare Byrne has been drafted into Prime Time as a presenter, and the jury is out on her performance, but in truth, it will be the quality of the research that provides the foundation that will make or break both strands in future. Like good barristers, TV presenters should know the answers to their questions beforehand and should try to lead proceedings in such a way as to present a coherent story to their audiences. That doesn’t mean new information is discarded or ignored because it doesn’t fit, but it does mean that the needs of the audience should be paramount.

Prime Time Investigates, which was suspended in 2011 after the Fr Reynolds affair, has yet to return to our screens but there is a sore need in Ireland for such an investigative strand. We wait to see how Kevin Bakhurst will develop what is generally regarded as very difficult programming – investigative journalism – which is expensive and time-consuming, legally problematic and can ultimately result in abandoned projects.

So far, and with just eight weeks under his belt, there doesn’t appear to be any great change at Prime Time or Frontline, but it is early days yet and the man from the BBC is contending with entrenched ways of doing things, not to mention a maze of relationships, some of which are poisonous to the overall prospects of current affairs. It will be a subject worth re-examining in a few months.

Read Full Post »


“The Irish people shall agree to assume responsibility for a share of the present debt of the United Kingdom and of the liability of pensions arising out of the Great War, the share in default of agreement between the Governments concerned to be determined by an independent arbitrator appointed from within His Majesty’s Dominions.” Extract from British proposals for a Treaty in July 1921

If I ever make it onto the TV quiz programme “Mastermind” one of my specialist subjects could be NAMA and it would be enjoyable spending a couple of minutes responding “I can’t answer questions on individual transactions” or “I can’t discuss individual members of staff” or “I can’t answer questions on individual court cases” or “that is commercially confidential” or “the NAMA Act prevents me from answering that”. But a backup specialist subject would be “The Irish Boundary Commission 1921-25”, a subject which bears strong similarities with the current debt negotiations in Europe.

The Boundary Commission might seem like a dry old subject for a Bank Holiday Sunday morning, but its development and ultimate failure 90 years ago echoes down the ages, and for those of you amenable to seeing history repeating itself, it might give you cause to be anxious.

In 1921 as the War of Independence with Britain was drawing to a close, a Boundary Commission was proposed as part of the settlement which nationalist Ireland hoped and believed would ultimately yield a large portion, if not all, of what was Northern Ireland. The previous year however, the British had practically pulled the rug from beneath nationalist Ireland by partitioning the country with six of the nine counties in Ulster – having a 25% Catholic population – forming what was first called the SixCounties and North-East Ulster but then became known as Northern Ireland. Interestingly Cavan, Monaghan and Donegal were omitted from the new Northern Ireland because their inclusion would have meant a 40% Catholic minority in Northern Ireland which was deemed too dangerous by Unionists – in 2012, the Catholic minority is well over 40%.

It was hoped by nationalists in 1921 that the Boundary Commission, which would ultimately decide on the final territory of Northern Ireland would lead to Fermanagh, Tyrone, Derry city and Newry all being transferred to what was then called the Irish Free State but today, the Republic of Ireland. You will see from the extract shown at the top of this blogpost that the terms initially sought by the British in the Treaty were cheeky – impoverished Ireland repaying British war debt, indeed!

The Boundary Commission didn’t start its work until late1924 – our Civil War in 1922/3 and Northern Irish non-cooperation delayed matters. But the 3-man Commission which had an Irish member Eoin MacNeill, an English member James Fisher who stood in place of what was intended to be a Northern Irish member and the Commission chairman, a South African, Dick Feetham did their work over the course of 12 months. They inspected the 1911 Census, determined the Catholic populations of electoral areas of Northern Ireland and produced a wonderful map which was only published in 1969.

Their map showed that most of Tyrone and Fermanagh were Catholic as were areas of south Armagh. Derry was Catholic on the Bogside but beyond Derry in Donegal there were non-Catholic majorities. So, the 1925 map proposed that Northern Ireland would INCREASE to absorb bits of Donegal but because they didn’t want to create “islands” Fermanagh and Tyrone would remain in Northern Ireland, but south Armagh would be returned to the Irish Free State.

When our Taoiseach-equivalent William Cosgrave and Northern Ireland’s leader James Craig were presented with the plan, BOTH said they preferred the existing Border to the proposed changes. And so we have Northern Ireland and the Republic of Ireland today, with Northern Ireland territory exactly matching the six traditional counties of Fermanagh, Tyrone, Armagh, Down, Antrim and (London)Derry. Despite the hopes of nationalists in 1921, they ultimately got nothing and indeed were presented with a plan to give over territory to Northern Ireland.

The similarities

(1) Expectations. All the evidence in 1921 on the Irish side points to an expectation that the Boundary would eventually be drawn so as to include Tyrone, Fermanagh, Derry city in county Derry and Newry in county Armagh in the Irish Free State. This would have represented half the territory of what had become Northern Ireland. On the British side, the evidence points to a determination to keep the Border as it was first determined in 1920 “for good and all” – somehow that overarching British view was never fully appreciated on the Irish side, and yet, it was the British view which prevailed in 1925. In the present day, an expectation has been allowed to develop that Ireland may get €64bn from “the Europeans” or that we might get €30bn for the State’s stakes in our banks which are only worth €6-8bn on the open market.  In 1925 Ireland faced the prospect of losing territory to Northern Ireland, something unthought of in 1921 – in 2012, Ireland faces the prospect of paying €11bn into the European Stability Mechanism fund, and although Ireland portrays a one-way flow of funds, in truth Ireland may need bail out Greece (again), Spain, Italy and even France.

(2) Vagueness of commitments. Back in 1921, Article 12 of the Treaty merely said “Provided that if such an address [exercising Northern Ireland’s right to opt out of the Irish Free State] is so presented, a Commission consisting of three persons, one to be appointed by the Government of the Irish Free State, one to be appointed by the Government of Northern Ireland, and one who shall be Chairman to be appointed by the British Government shall determine in accordance with the wishes of the inhabitants, so far as may be compatible with economic and geographic conditions the boundaries between Northern Ireland and the rest of Ireland, and for the purposes of the Government of Ireland Act, 1920, and of this instrument, the boundary of Northern Ireland shall be such as may be determined by such Commission.”. In June 2012, the EU summit communiqué said “We affirm that it is imperative to break the vicious circle between banks and sovereigns… The Eurogroup will examine the situation of the Irish financial sector with the view of further improving the sustainability of the well-performing adjustment programme. Similar cases will be treated equally” In hindsight, some historians are suspicious of the term in the 1921 Treaty because the equivalent term in the Treaty of Versailles in 1919 was very specific indeed. Lack of specificity generates suspicion today.

(3) Negotiations behind closed doors. Yes, in 2012, the Information Age with the Internet, mobile phones and 24-hour news, we still know next to nothing about the negotiations about the debt deal, and the suspicion these days is that the participants on the Irish side are not doing very well at all. It was the same back in 1921-25 though absent radio even, that shouldn’t be surprising. But in November 1925 the Irish people were presented with a fait accompli, Northern Ireland was to keep the six counties, and that was an end to it. No apology for dashed hopes, little explanation for the failure. “We are where we are”

(4) Poor planning and leadership. It was decided by the 3-man Commission that the 1911 Census would be used to determine Catholic areas. But between 1911 and 1924/5 there had been significant migration of Catholics into what had become Northern Ireland to assist with the war effort in particular. And of course Catholics tended to have larger families, so you would have expected that over 14 years between 1911 and 1925 the demographics of Northern Ireland might have changed considerably but that was not deemed sufficiently important by the Commission. In addition, the basis for determining a recommendation to relocate land in the Irish Free State or in Northern Ireland was base on the Catholic/non-Catholic split, which in hindsight is an atrocious error on the Irish side. What would the results have been if the split was Protestant/non-Protestant? Probably, significantly different.

(5) Pre-judgment. It was claimed on the Unionist side that back in 1920/21, the British had given a pledge that there would be no subsequent change to the territory of Northern Ireland. This was denied by the British, but in hindsight, it seems to have been borne out by coincidence of events. In these negotiations, the Irish have consistently failed to identify the “Santa Claus” in Europe who will magick up compensation, and this prompts the suspicion that the negotiations have been prejudged. If there was a commitment or at least a suggestion by Chancellor Merkel that German people might contribute a sum of money to Ireland for compensation for protecting the EuroZone’s banking system at the behest of the ECB, then that would change matters, but that hasn’t happened. All we have are vague commitments to examine the Irish debt situation and no European country has suggested it will hand over cash to this country, at a direct cost to its people.

(6) Complicated. We have been hearing for the past 14 months that the work involved in our debt deal negotiations is “technical” and “complicated”. And so it was back in 1924/5 when the 3-man Commission assisted by a secretary and a cartographer went about analysing the terms of the Treaty, analysing the 1911 Census and “perambulating” around Ireland and Northern Ireland examining territory and meeting with vast numbers of representatives. What could be more complicated than deciding of Derry city was to be split between Bogside and Waterside, or extended to Muff in county Donegal, how was the waterway in Lough Foyle to be split, how would the arrangements affect the shirt and collar industry for which Derry was famous. Is extending the period by which the  promissory notes will be paid off from 20 to 40 years any more “complicated”

(7) Poor personnel. The English had Stanley Baldwin who might be remembered for being a mediocre prime minister, but they also had the Establishment which had learned its rough trade on the rugger fields of Eton. Winston Churchill was to the fore of the final negotiations in November 1925 just as he had been at the Treaty in 1921. The Irish member of the Commission, Eoin MacNeill might be regarded as an embarrassment today for his lack of engagement and failure to see issues from the outset, issues which would cause immeasurable problems or undermine what was the Nationalist hope from the work of the Commission. Why we fielded the young Kevin O’Higgins in the 1925 final negotiations is incredible, and points to a lack of resources available to, and leadership by, William Cosgrave. Who have we batting for Ireland today? How did we allow the negotiation of the territory of our state to be concertinaed into two days on British territory at Chequers on 26-28th November 1925?

(8) Leaks. There was one huge leak in the work of the Boundary Commission and that was in November 1925 when a map was published in the Morning Post (later taken over by the Daily Telegraph) showing in remarkable detail and matching the actual map constructed by the Commission, the areas for relocation. The finger has been pointed at the English member of the Commission, James Fisher who corresponded on friendly terms with the widow of a prominent Unionist, but the effect of the leak was that the Irish member of the Commission, Eoin MacNeill resigned. The leak prompted an intensification of the Northern Ireland Unionist campaign founded on the principle of “Not an Inch”. Nationalists were gutted. We haven’t yet had leaks as such in the present debt negotiations, though we constantly have statements from the participants which sway opinions and hopes. It is almost beyond comprehension that the full text of the letters and communication from then-ECB president, Jean-Claude Trichet to then-finance minister, the late Brian Lenihan in October and November 2010 have not been leaked by our side.

(9) Loss of Negotiation Positions. In the present financial crisis, whenever we paid bonds in busted banks, we lost some more of our negotiation position. Most of the bonds in Anglo have now been repaid. The money has gone, that ship has sailed, though there is still a battle to be had about AIB, the 99.8% state-owned bank that has to date cost us €20.7bn. This loss of hard negotiation chips closely matches the strategic decision by the British/Unionists in 1920 to create Northern Ireland, which once created was very, very difficult to set aside, particularly with the heroic efforts of Unionists to consolidate their position with the establishment of government, and to their immense credit, they established a working government and state in a very short period of time.

(10) Small Dog Syndrome. Back in 1921-25, the Irish focussed on their own territory which was understandable, but there seems to have been a lack of appreciation of how the world had changed. The British had won the Great War but at a terrible cost. All around the world, territories were being carved out from eastern France, Poland/Ukraine, Austria and elsewhere. The Irish had little sensitivity to this and seemed to forget they were negotiating with a country which controlled, in vary degrees of dominion, Canada, Australia, New Zealand, Palestine, India, Pakistan, Bangladesh, South Africa, Gibraltar, Hong Kong, bits of the Pacific and Carribean. Today we are dealing with a Germany which has spent €1-2tn on reunification, with countries which have also had expensive bank bailouts or which have dealt with their own crises and disasters by themselves. We also conveniently forget that it was us, acting unilaterally, who decided to implement a guarantee in 2008 which was opposed by many in Europe.

In July 2012, An Taoiseach Enda Kenny unveiled a commemorative plaque to Kevin O’Higgins, one of the key negotiators with the British at Chequers in November, 1925. Kevin was to be assassinated in 1927 at the tender enough of age of 35 for his role in signing the execution orders of 77 anti-Treaty prisoners during the Civil War. The utter failure of the Boundary Commission resonates through the ages, and those players in today’s debt negotiations might do worse than examine the parallels and avoid the mistakes of the past.

Read Full Post »

In June 2012, Minister for Finance Michael Noonan stated in the Dail in response to a question from the Fianna Fail finance spokesperson Michael McGrath that “NAMA advises that it is currently challenging the release from bankruptcy in Northern Ireland of one debtor, due to non-cooperation with the bankruptcy trustee” NAMA has not confirmed the identity of the Northern Ireland bankruptcy that it is challenging but this might be the one.

Back in June 2011, Northern Ireland developer and businessman Sean McWilliams from Derry and his wife Mary McWilliams were declared bankrupt at the behest of AIB. AIB subsequently challenged their discharge from bankruptcy which would normally have occurred in June 2012 – the UK bankruptcy period is 12 months compared with 3-12 years in (the Republic of) Ireland. AIB was initially unsuccessful but at the start of October, 2012 Judge Deeny in Belfast’s High Court ruled that AIB was entitled to now present new material which might impinge upon the discharge from bankruptcy of Mr and Mrs McWilliams. Judge Deeny comments that “I enquired from counsel in chambers, and was told that the AIB Group were now not at the forefront or heart of the dispute between the parties” and the betting in some quarters is that it is NAMA which is driving the challenge.

It seems that there is concern on the bankruptcy official’s part that there are assets or dealings by the McWilliamses which have not hitherto been declared, but these matters were not set out in any detail in the judgment. One asset or dealing might relate to an apartment in the Centria building in Manhattan which might be familiar to some of our readers as it was at 19E that Ray Grehan owned an apartment which NAMA went to court about and was apparently successful in stopping a sale by the Galway developer who was declared bankrupt in the UK, though NAMA continues to pursue him there over a transaction involving an apartment at One Hyde Park in Knightsbridge, London. In the case of McWilliams, it seems an apartment registered to the couple , an apartment bought by the McWilliamses in 2007 for USD 1.445m and sold to a company called Kravet Inc for USD 1.193m in 2009, may have piqued the interest of the bankruptcy official.

The McWilliamses were described by Judge Deeny as being involved “at a very substantial level, in dealing in property in France (including Cap Ferrat) and the United States and perhaps elsewhere of a valuable kind and they achieved a significant number of sales” According to the BBC which reported on the matter yesterday, the couple “owned a number of property companies registered in Swatragh and Dublin and had their biggest projects in County Donegal”

The BBC reports that the case is set to return to court in Belfast on 5th November 2012 and that the bankruptcy which would have been discharged in June 2012 continues until the appeal has been heard.

UPDATE: 8th November, 2012. News today that the Official Receiver has abandoned their challenge to the discharge of the McWilliams couple. A statement issued on behalf of the couple says “Given the criticisms against them in the original judgement and clear lack of evidence it is difficult to comprehend why the Official Receiver/Trustee refused to accept the original decision of the Court, and sought to drag us through further proceedings…Those questions are for others to pose, we are just glad to have come through the process fully exonerated and can now look forward to  rebuilding our lives”

Read Full Post »

Word of the Week

 “Special”  – Ireland is “special” according to the joint statement by An Taoiseach Enda Kenny and German Chancellor Angela Merkel last Sunday evening. Alas “special” is a word which has a wide variety of meanings in different contexts. “That child is special” used to be a euphemism for indicating some disability. Britain has a “special relationship” with the US, but then again US presidents say that to every country’s head of state who turns up at the White House. During World War II, “sonder”, one of the German words for “special” had a sinister meaning as testified to by the many “sonderaktion”s in former Nazi-occupied territories. “Special” might mean that Ireland has shouldered an extraordinary amount of bank debt with a side effect of protecting the EuroZone banking system. But then again, Germany might claim the  €1-2tn cost of reunification in the 1990s and 2000s was “special” and the “legacy” being addressed had nothing to do with most of the current generation of German people. And although it might be an uncomfortable truth, other EU countries have shovelled more euros into their bust banks than the Irish, it’s just their economies and banking sectors were larger so as a per cent of their GDPs, the figure was smaller.


Mobile Phone Service of the Week

The former Independent News and Media director, Karl Brophy may have settled his case at the High Court during the week, against what is now his former employer, but not before revealing in open court the content of text or SMS messages received from Denis O’Brien’s spokesman James Morrissey, one of which said, according to the Irish Times “Karl – truth comes hard to you . . . ask Samantha McCaughren, Paul Cullen . . . When you stop telling lies about me I will stop telling the truth about you . . . Just remind your father of the day he visited Fleishman [where Morrissey works] to enquire about digging the dirt on Denis O’Brien, you want the day and time? history dear boy! James.” We might recall that earlier this year, the former chairman of INM, James Osborne claims to have received a telephone call from INM’s biggest shareholder Denis O’Brien, where James claims Denis said “they’ve been on to me, there’s an article in tomorrow’s paper and I want it withdrawn”. And of course, former INM CEO Gavin O’Reilly was himself the recipient of text messages and phone calls from Denis O’Brien associate and current INM chairman, Leslie Buckley including ones which, according to Broadsheet.ie reproduction of Gavin O’Reilly’s emails and memos, sought the removal of journalist Sam Smyth from reporting on the Moriarty Tribunal proceedings. Even veteran journalist and broadcaster Vincent O’Brien has been on the receiving end of unpleasant correspondence from Denis O’Brien which included an intimation of legal action against Vincent personally, as opposed to the publication for which he writes, the Irish Times.  This pattern is really too good an opportunity a pass up, so will some enterprising mobile phone entrepreneur introduce a service where you can text 68880 and a [telephone number] and a series of bizarre and slightly threatening text messages will be sent to the [telephone number], all for just €2 a pop? You’ll might find templates for such messages in the reported writings and telephone calls of Leslie Buckley, James Morrissey and Denis O’Brien.

 Spot the Difference of the Week


With the CSO confirming during the week that Irish residential property prices have risen for the third month in a row, with the imminent abolishment of mortgage interest relief for first time buyers and with some isolated rays of hope in the economy, there is a tentative feeling of normality amongst estate agents. Competition between agents can’t be far behind, but since the awful crash in 2007 followed by a moribund market for five years, the game has changed and there are new players in town…

 Graph of the Week


During the week, Eurostat, the statistics agency for the EU released debt figures for EU for the second quarter of 2012. Ireland is in the Top 4 at 112% just behind Portugal. Next year we should rival Italy and Portugal for the second place. Coincidentally this week, NAMA announced that the 17% stake in the Agency formerly owned by Irish Life and Permanent had been sold to a little-known UK outfit founded just over a year ago, Walbrook Partners LLP. The transaction was driven by ILP, which is now 99.5-100% owned by the State and which needed to divest itself of the stake lest the State’s stake in NAMA exceed 50% which would mean that the bonds which NAMA used to pay for the loans it acquired from the banks would come onto the State’s balance sheet, and would have increased our Eurostat-reported debt:GDP for Q2,2012 from 112% by €27bn approximately or another 18% bringing our debt:GDP to 130%. Since it is the State that is ultimately on the hook for NAMA’s losses, some might say that this accounting would be more accurate, though it should be remembered that NAMA has assets backing up its bonds and NAMA maintains it is still “confident” it will break even. Minister Bruton seemed to let to cat out of the bag a month ago when she conceded that a loss of up to €15bn may be on the cards at NAMA.


TV format of the Week

This was a landmark week for television in Ireland with the analogue signal being switched off on Wednesday as the new digital service, dubbed “Saorview”, became the only signal available to TVs. “SaorView” means “FreeView” in English and of course, the UK has had a digital service called FreeView for over a decade. Unless the miserable offering of channels on Saorview, Freeview had nearly 100 channels with a strong line-up of entertainment, films, news, current affairs. Here’s the FreeView schedule for today, there doesn’t appear to be a Saorview schedule yet but since the only channels on it are RTÉ One,  RTÉ Two HD (in high definition),  TV3,  TG4,  3e – a second service offered by TV3 currently only available to cable TV subscribers,  RTÉ News Now – a dedicated news channel,  RTÉjr – a kids channel,  RTÉ One +1, it wouldn’t take long to find out what was on. Feeling short-changed? The licence fee in Ireland is €160 and is GBP 146 (€182) in the UK. A FreeView set-top box in the UK costs €23 at Argos, in Ireland the lowest cost for a SaorView box at Argos seems to be €60.


On a separate but related point, RTE this week broadcast a TV programme on the future of TV, but as regards the present day, it is a wonder that Ireland, the land or musicians and poets, has seemingly failed to ever produce a single TV format that was successful on a global stage. Yes, we use X-Factor, Come Dine with Me, Family Fortunes, Come Dance with Me, reality TV and other formats from the US, UK and Holland but what format have we ever created? I stand to be corrected but I can’t think of a single one, except…


The vastly overpaid and slightly mediocre TV personality.


This week, we learned that Ryan Tubridy has signed a new contract with RTE which will see him, or his company, earn €373,333 per annum. This, in a TV market that is 1/15th the size of the UK’s. This, at a company which lost €70m in 2011. “€70m?!!!” I hear you say, but that can’t be right and didn’t RTE itself say it lost just €17m.One. Seven. But no, when taking the increased provision for pension payments into account, RTE lost €70m, including a €50m provision for pensions. Ryan Tubridy wouldn’t be my cup of tea – that would be more Sean O’Rourke, there’s no accounting for tastes – and you can’t blame Ryan Tubridy for the salary others chose to pay him. The managers at RTE are more to blame and indeed they know that if Ryan’s salary is cut too much, then their salary will also be in line for a chop.


Yes, we most certainly have created at least one TV format in Ireland.



Quote of the Week


Okay, it’s just over a week since junior minister Brian Hayes dropped the clanger that Official Ireland believes our debt to be unsustainable, this despite the minister having previously expatiated until he was nearly cross-eyed that our debt was in fact sustainable. Minister Ruairi Quinn chipped in on Monday this week on RTE Radio to reaffirm the change in the official position. I wonder were people as confused when the Church decided that it was okay to eat meat on Fridays?


“It’s not sustainable to have a debt to GDP ratio of 120%. A fifth, 20%, of all taxes that we’re taking in this year are going towards payment of the interest on our national debt, that’s not sustainable. We know that, our national funders know that and we’ve got to ensure the deal we get deals with that” Junior minister at the Department of Public Expenditure and Reform, Brian Hayes on Prime Time 18th October, 2012


“Ireland is not Greece. We do not have a debt to GDP ratio of 160%. It is 100% at present and we expect it to top out at approximately 118% by 2013. It will be enormously challenging to service that debt for the foreseeable future. In the 1980s, one third of all tax received in this economy was used to make interest payments on the national debt. In our worst position — in 2013, when our debt to GDP ratio will be at its height — the proportion of taxes being spent on interest payments will be no more than 120%. We need to ask whether that is manageable. I contend that it is. We did it in the 1980s.” Junior minister at the Department of Public Expenditure and Reform, Brian Hayes in the Seanad in July 2011

Read Full Post »

Sources are this afternoon claiming that Gortanore, the 3-acre site with a modest house in Foxrock, Dublin is under offer by the embassy of Saudi Arabia for a price a little north of the €5m asking price when it came on the market in August 2012. The property was the most expensive residence sold in Ireland in 2006 but its €31m price then reflected its development potential and there were plans to build apartment blocks with some commercial space. The property was owned by David Arnold of D2 Private fame. Neither of the joint agents, Jones Lang LaSalle or Daphne L Kaye had any comment at time of writing.

Separately , the property which was the subject of most expensive residential property transaction ever in Ireland – the Sean Dunne-associated €58m purchase of Walford at 24 Shewsbury Road – which went on the market a year ago with a price tag of €15m appears not to have been sold. In the Dail this week, the Sinn Fein finance spokesperson Pearse Doherty asked the justice minister Alan Shatter if the property had been sold. He was told it hasn’t been sold.

The full parliamentary question and response is here.

Deputy Pearse Doherty: To ask the Minister for Justice and Equality further to Parliamentary Questions No.183 and 184 of 9 October 2012, if there has been a sale of a property known as Walford at 24 Shrewsbury Road, Ballsbridge, Dublin 4 during the period covered by the recent release of data by the Property Services Regulatory Authority in its property price register, and if there has been a sale of said property, if he will provide the sale price, the date of the sale and the quantum of stamp duty paid to the State on the sale.

Minister for Justice, Equality and Defence, Alan Shatter: The information included in the Residential Property Price Register is compiled from data filed with the Revenue Commissioners for Stamp Duty Purposes. I am advised by the Property Services Regulatory Authority, which has responsibility for the Register, that all properties filed with the Revenue Commissioners in the period 1 January 2010 to 19 October 2012 are on the Register and that the property referred to by the Deputy is not included.

The Residential Property Price Register provides information on the address of the property, its sale price and date of sale. The Register does not provide any information on the quantum of stamp duty paid to the State, which is solely a matter for the Revenue Commissioners.

Read Full Post »

Older Posts »