Archive for January 26th, 2013

Tonight at 8pm in Charleville there will be an event to mark the 100th week of bank bailout protests by the communities of Ballyhea and Charleville – it’s free and promises to be an entertaining and enlightening evening. And after the Reuters exclusive this afternoon, it promises to be electrifying particularly if the Fine Gael TD, Deputy Peter Mathews speaks, as was announced by lead-organiser Diarmuid O’Flynn on the Claire Byrne show on RTE Radio 1 today.

One of the original demands by the Ballyhea and Charleville protesters was that there be a complete stop to the repayment of bonds in our bust banks. There are a number of reasons for taking that aggressive stance but “possession being nine tenths of the law” was one. If the cash wasn’t transferred from our banks, then we would have a stronger position in one sense, even if it would generate legal action by burned bondholders,

This Government’s policy has been to try to work consensually with the ECB in alleviating the burden of the bank bailout, and burning the senior bondholders was certainly on the agenda; after all, that’s precisely what Minister Noonan announced when he was on a visit to the IMF in Washington in the summer of 2011. But the ECB rejected this approach and so we have 100% repaid unguaranteed and unsecured bonds in our banks, including about €4bn in Anglo and Irish Nationwide Building Society, since the start of 2011.

The consensual approach has taken a knock this afternoon with Reuters exclusively reporting that the ECB has rejected the Irish government’s proposal to alleviate the burden of repaying the €31bn of promissory notes in Anglo, INBS and EBS. Reuters reports “sources familiar with the talks” saying today that the Irish preferred solution has been rejected. We don’t know what the preferred solution was, and if there were alternative solutions and what those are and if they are still “alive”. However, on 16th January 2013, the governor of the Central Bank of Ireland appeared before the Oireachtas finance committee and alluded to “an initiative” – in the singular – which would be “novel…, while not taking other decision makers too far out of their comfort zone”. The Governor said

“Taking into account both the statutory position and wider policy stance of the ECB, an initiative of this type will be novel and, as such, challenging. Using our knowledge of central banking law and practice, we have been working carefully to build understanding and confidence around a set of proposed transactions designed to deliver for Ireland, while not taking other decision makers too far out of their comfort zone. The ECB is an organisation that seeks to proceed as far as possible by consensus, and it is not surprising that this work has been taking quite a while. In fact, what we have designed from our side is, I believe, largely in the interests of the euro system as a whole. On work in progress, I have nothing to add today to what has already been said by the Minister for Finance about the prospects and timing of the conclusion to these discussions.”

Despite the general mood music of there being “no doubt “ about a debt deal, and the “confidence” which has been promoted at parliamentary party meetings, the view on here remains skeptical. Remember, Ireland is not unique and there are other countries who want to alleviate their own bank bailout burden also, and the ECB risks opening the floodgates if it approves an individual way-forward for Ireland. After all, other countries might legitimately point to the EU communiqué last June which said “similar cases will be treated equally” – always remember that any proposal that comes our way might have a cost to Ireland because we are not alone in our problems despite the scale and severity.

What now for the promissory note deal which needs to happen in the next nine weeks if the 31st March 2013 payment is to be avoided? We don’t know, the Irish Department of Finance is not commenting this afternoon.

UPDATE: 26th January, 2013. Sean Whelan at RTE is reporting that he has obtained a comment from the ECB, though it remains the case that Irish “interlocutors” are not commenting. The ECB has said that no deal has been rejected, and it seems from sources that there might be a prospect of “tweaking” the preferred Irish option. It’s all very muddy.


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Somehow, I don’t think the controversy of Minister for Health James Reilly and his involvement in the selection of primary care centre sites, is going to dissipate despite it being a new year. Just before Christmas, there was a particularly testy exchange between the Opposition and Government on the last day before the break for Christmas, and amid a distinct absence of Seasonal goodwill, serious allegations were made and the Opposition was invited to step outside and repeat those allegations in an environment where they would no longer enjoy parliamentary privilege. We also found out during the exchange that an internal audit report was produced in October 2012, which concluded there was no political interference in the selection of controversial sites in the Minister’s own constituency. That report might provide a few more loose threads to be pulled at during the coming session…

And because I can’t find it elsewhere in the media free online, this blogpost is to report that it has also emerged that the Minister for Health is suing the Mail on Sunday for defamation arising from an article apparently published on 7th October 2012 and which was the subject of an apology by the Mail on Sunday on 21st October 2012.

On 7th November 2012, the Minister launched an action in Dublin’s High Court – the reference is 2012/11254 P. The respondents are named by the Court Service as Associated Newspapers Limited and Associated Newspapers [Ireland] Limited, both represented by William Fry solicitors – Associated Newspapers is the publisher of the Daily Mail and Mail on Sunday. The Minister himself is represented by O’Connor solicitors. Yesterday, the 25th January 2013, Minister Reilly lodged an affidavit in the case, it looks as if it is proceeding.

The Phoenix Magazine – seriously worth a read, this issue –  reported that, although the Minister received an apology, he is still pursuing damages against the Mail on Sunday.

We hardly need repeat the details of the story which has given rise to the proceedings, but in outline, it seems the Mail on Sunday mis-reported a property transaction involving the Minister in the 2000s.

UPDATE: 10th April, 2013. The case has been scheduled for hearing at the High Court on 4th June 2013.

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Table of the Week


It seems to have gone largely unnoticed that the Government’s own plans are to reduce headcount in the public sector in 2013 by 7,404 so-called “whole time equivalents” It remains unclear how many employees this will affect, as two employees working half-time would make just one “whole time equivalent”. But what the plans, outlined when the Budget 2013 documentation was published in December 2012, mean is that we will need create a net of at least 7,404 jobs in the private sector just to maintain employment at current levels.

And the numbers above look light. Take the Gardai where they are required to make €36m of payroll savings in 2013. That would equate to 1,500 Gardai at €48,000 per annum for six months, and 1,500 is the cut suggested by Garda representatives.

The information is contained in Table 6 of the “Expenditure Report 2013” on page 132.

How much do you earn of the Week


It was slipped out just before Christmas and not covered on here, and in truth there is little in it that we didn’t know already, but above is an extract from the letter sent to the Committee of Public Accounts in December 2012 by the CEO of the NTMA, John Corrigan.

Text message of the Week

“Your account has just been credited with €30,000” Imagining of the texts that Aoife Quinn must have been receiving each month from Ocean Bank.

In the High Court this week, the latest installment in the Quinn family saga involved the questioning of the first of the Quinn children over the documentation and evidence provided by the Quinn family to the Irish Bank Resolution Corporation – these hearings fit into the context of Anglo’s overall case against the Quinns as merely preliminary hearings to establish the documentation that exists in the case. This week, Aoife Quinn confirmed that she had signed what was described as an employment contract with three Russian companies which provided for an annual salary of €379,000 or just over €30,000 per month. Aoife neither understood the contract because it was in Russian nor did she keep a copy. The money was paid into a bank account each month at Ocean Bank and Aoife merely received texts to confirm the sums had arrived.

Remember that IBRC or Anglo is pursuing properties which were secured by loans advanced by the banks. IBRC is also trying to trace where the rental income on the properties has gone, and the contracts referred to above may ultimately provide clues during the main court hearing as to where that rental income has gone. Remember also that the many unanswered questions this week – like “what did Aoife do for the €379,000?” – should be addressed in the main hearing later this year.

What did Aoife do with the money? She told the court she may have spent it on legal fees but didn’t now have any documentation or receipts to support that claim. The case continues, and the other Quinn children will be quizzed in the coming week.

Video of the Week

The bondholders in Irish banks are generally hidden with their identities protected. Minister for Finance, Michael Noonan defends their anonymity by saying the banks don’t know the identities of the current bondholders, and that the information is held on a confidential basis by the bond clearing companies like Clearstrea. But this week in New York, a bondholder stuck his head above the parapet to boast about his success with recovering his investment in subordinated bonds at Bank of Ireland. David Tepper’s Appaloosa Management had invested in BoI’s bonds, and when BoI sought to impose a haircut, Appaloosa reacted by taking Bank of Ireland to court, and if you believe the charming David, he received full repayment from the bank.

At least next time, the identity of bondholders crops up, we have a name and a grinning face.


We have shovelled €4.8bn gross into Bank of Ireland, though we have received €3.7bn back (See below, which excludes the €1.056bn realized from the sale of the €1bn of Contingent Capital Notes in January 2013 – comprising €1.01bn for the CCNs and €46m for accumulated interest. The net cost of bailing out Bank of Ireland was outlined in a parliamentary question in December 2012,


Gig of the Week

Tonight at 8pm in Charleville in county Cork, there’ll be an event, the like of which, you’ll rarely see again. From 8pm sharp, a varied selection of economists, politicians and activists, a comedian and, what the organizers bill as a “special guest” will be informing and entertaining. The event is part of the marking of the 100th weekly bank bailout protest by the Ballyhea and Charleville communities – pictured above on a special protest in front of the ECB headquarters in Frankfurt. It’s free and is being held at the Charleville Park Hotel – they’d appreciate your support.

Unopened envelope of the Week


Newly-invigorated current affairs presenter, Miriam O’Callaghan was at the top of her game on Thursday as she quizzed Minister for Agriculture, Food and the Marine, Simon Coveney about the ungoing horse-infused-burger controversy – it doesn’t seem to have yet copperfastened the classification of “scandal” but elevation to that level might be imminent. On Thursday evening “just as he was coming out to meet” Miriam,  Minister Coveney says he received the results from the latest analysis of a sample of beefburgers. Miriam quite rightly suggested that if the results were good or gave an all-clear, then the Minister would be eager to trumpet that good news to the world. Minister Coveney however looked shifty and 36 hours later we still don’t know what the latest results are, but suspicion is naturally enough growing that the results are not good.

The controversy took a turn for the worse this week with suggestions that the horsemeat which had seemingly been used in the preparation of the beefburgers may have contained medicines which might be carcinogenic, that is, having the potential to cause cancer.  So the controversy has moved on from being a slightly humourous play on our sensibilities when it comes to the selection of animals to eat, to a health concern where the meat consumed might have contained nasties.

Larry Goodman, whose plants in Monaghan and Yorkshire are now firmly at the centre of the controversy, has been brought out of his self-imposed seclusion from the media, and pleaded his case to the Financial Times.  Burger King stopped doing business with the Monaghan plant, which has in any event been temporarily closed down. Waitrose – upmarket food competitor to M&S in the UK – became the fifth British store to withdraw Goodman burgers, and in Oxfordshire there was some drama when a member of the public saw the offending Goodman burgers still on sale at Tesco.

Minister Simon Coveney has had an altogether plain-sailing tenure at the Department of Agriculture so far, but as this week comes to an end, he looks to be in danger of slipping on a giant banana as he still refuses to tell us the contents of the envelope.

Graph of the Week


You might be interested in the graphic representation of the latest extraction of data from the Property Price Register which shows that in 2012, volume of transactions grew from 2011 which indicates a degree of stabilization. But simple average price data shows that prices were generally below levels in 2011 – take the simple averages with a large grain of salt, no account is taken for different mixes of properties sold. This week, the Central Statistics Office recorded a decline in prices nationally in the month of December 2012, with Dublin houses in particular suffering. Stabilization in house prices might be some ways off yet.

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