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Archive for the ‘Greece’ Category

The good news is that there is plenty of room in the rear of trucks and lorries going BACK into North Korea so if you hurry, you might just be able to escape to a less intrusive regime while there’s still time. The bad news is that today, Ireland enhances its reputation as a world laughing stock for its idiocratic public administration with the launch of personal insolvency rules that will see the State setting guidelines for personal expenditure on food, clothes, holidays, cars and in fact, will allow the State peer into every nook-and-cranny of your life. We might laugh at mass displays of boiler-suited communists marching in formation before a baby-faced despot, all with oversized hats and punching the air;  they’ll be having a laugh at what we’ve just done. In North Korea they might punish citizens for not looking sad enough when a Dear Leader expires, in Ireland you’re allowed €28.97 per week for so-called “social inclusion activities”.

Ireland has a colossal public and private debt problem. We have an economy that has slipped back into recession, a deficit of over 7%, unemployment of over 14%, emigration of over 80,000 per annum in a country of just 4.6m and the IMF are in keeping a daily watch over our finances. As a country, our gross debt:GDP is forecast to rise to 121% in 2013, our gross debt:GNP is over 140%. Private borrowing ballooned in the last decade partly to fund property acquisition and speculation, partly for consumer spending. The State has taken over most of the banking sector and is now, ultimately, the main creditor for many people. Now the economy has contracted by nearly 10% and the invoice has finally arrived in the post. And we can’t pay.

Up to now, the only avenue available for heavily indebted citizens was a domestic bankruptcy which lasted 12 years and was practically unavailable. Or emigrate and file for bankruptcy elsewhere or live a half-life under the whip-hand of your creditors.

At the end of 2012, we passed into law the Personal Insolvency Act which provides a more modern set of solutions, but the Act has not been commenced yet and won’t be until June. Today, we find out the detail of what the new Act will entail even if it will be another three months before anyone can actually use any of the new processes. The new quango, the Insolvency Service of Ireland has launched its  website which provides detail on how the new solutions will work. What will have them rolling in the aisles internationally are the detailed rules on living expenses allowed during the insolvency period which is set between 12 months and 6 years.

The guidelines are here. Here’s an extract.

HasItComeToThis

And yes, of course under “education” they couldn’t even spell “stationery”.

Stationary

The long-held view on here is that we import a template from an established democracy to allow quick and cheap bankruptcy which is in the interests of our economy generally, not to mention our society. What we have is going to be very expensive with a burgeoning personal insolvency industry and most heavily indebted people will still be better off emigrating. The level of intrusion into peoples’ lives for between 1-6 years is world-beating.

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It is truly remarkable that more than two months after the special liquidation of Irish Bank Resolution Corporation that the smoke is only now beginning to clear on some very important aspects of the liquidation.

In the Dail this week, the Independent TD for Wicklow and East Carlow Stephen Donnelly asked Minister for Finance Michael Noonan about exposure of Irish pension funds to the liquidation at IBRC. You will not be surprised to learn that after the repayment of 10s of billions of euros to bondholders, domestic pension funds are indeed now exposed to losses. Thankfully the losses would appear to be capped at €1m, but in his response, the Minister set out the pecking order of creditors to be repaid and it is (with the top ranking at 1)

(1) Preferred creditors

(2) debt purchased by NAMA from the Central Bank

(3) “if there are proceeds available after repayment in full of the NAMA debt, these proceeds will be applied to remaining unsecured creditors” which apparently includes part of the pension fund deposits at IBRC (by the way, if your pension fund had no-notice deposits at IBRC, it might be an idea to demand an explanation as to the actions of your pension fund)

In February 2013, Minister Noonan directed NAMA to buy IBRC debt at the Central Bank and NAMA issued €15bn of state guaranteed bonds to buy the charge over €15bn of IBRC assets held at the Central Bank.

Here is the IMF schematic of the IBRC liquidation.

So, it is now NAMA that is exposed to losses on these bonds, and the estimate on here is that IBRC’s assets were worth €1-3bn less than their book values in February 2013. This is beginning to look maverick, ah-hoc despite being planned since last October 2012 and amateurish, and worse, Minister Noonan refuses to provide us with the meat of the NAMA directions. But what we do know, is that bondholders covered by the ELG are being paid €933m ahead of NAMA which we own – according to the March Exchequer Statement, €933m was provided to IBRC by the Government on our behalf in March 2013.

This is just crazy.

The full parliamentary questions and response are below (with my emphasis added) and available at the Oireachtas website here.

Deputy Stephen S. Donnelly the total value of Irish pension funds on deposit, or in any other financial product, on the books of the Irish Bank Resolution Corporation at the time of liquidation under the Irish Bank Resolution Corporation Bill 2013; and if he will make a statement on the matter.

Deputy Stephen S. Donnelly the total write-down in the value of Irish pension funds due to the liquidation of the Irish Bank Resolution Corporation under the Irish Bank Resolution Corporation Bill 2013; and if he will make a statement on the matter.

Deputy Stephen S. Donnelly the number of individual pension funds, that is persons, affected by the liquidation of the Irish Bank Resolution Corporation under the Irish Bank Resolution Corporation Bill 2013; and if he will make a statement on the matter.

Deputy Stephen S. Donnelly if he will publish the analysis done prior to the liquidation of the Irish Bank Resolution Corporation under the Irish Bank Resolution Corporation Bill 2013 on the effect of the liquidation on Irish pension funds held by IBRC; and if he will make a statement on the matter

Minister for Finance, Michael Noonan: I propose to take Questions Nos. 275 to 278, inclusive, together.

As the Deputy is aware, I am not in a position to advise on the specifics of any accounts with IBRC (in liquidation). I have been informed that there are a number of customer accounts that may not be entitled to full compensation under the deposit guarantee scheme, DGS, or the eligible liabilities guarantee scheme, ELG, due to the nature of the products or deposit options in which those account holders invested. At the time that such products were offered there was no additional guarantee provided by the State in respect of those products. It was always the case that the ELG scheme covered only those liabilities which were entered into during the issuance window.

I have been advised that the total value of Irish pension funds placed on deposit with Irish Bank Resolution Corporation at the time of liquidation was in the region of €1m. This could exclude any funds placed on deposit with the Bank in client accounts opened on behalf of beneficiaries, where these beneficiaries are Irish pension funds. The total value of Irish pension fund deposits is currently under review with the respective Guarantee Scheme Operators, regarding consideration for payment under the respective schemes. The total number of individual pension funds with funds placed on deposit with Irish Bank Resolution Corporation at the time of liquidation was 23. Again, this could exclude any pension funds who are the beneficiaries of client accounts opened on their behalf.

Through the liquidation process, the proceeds from the disposal of IBRC’s assets will be used to repay creditors in accordance with normal Companies Acts priorities and consequently, preferred creditors will be paid first and then debt purchased by NAMA from the Central Bank will be paid. If there are proceeds available after repayment in full of the NAMA debt, these proceeds will be applied to remaining unsecured creditors. This would include depositors to the extent that their deposits are unguaranteed.

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The position on here remains skeptical about the ability of our banks to deal with our own mortgage crisis where one in four mortgages is in some form of difficulty. There is a target whereby 20% of distressed mortgages are to have resolution plans by the end of June 2013, but that equates to 25,000 mortgages out of the 125,000-odd buy to let and owner occupier mortgages in arrears at the end of December 2013.  The disgrace is that we’ve known about the crisis for over two years, with the Keane report initiated in August 2011 and President Clinton acknowledging mortgage debt as the number one economic challenge facing the country, something accepted by An Taoiseach.

Ireland is not the only country in which there is a mortgage crisis.

Greece has put together proposals which are being sent to the ECB now, and which are expected to come before the Greek parliament before the end of May 2013. The Greek original is here and there is a pigeon translation here. You will recognize many of the elements of the scheme!

If

(1) You have net household income of €25,000 or less (for large families or where there is disability, the limit rises to €30,000)

(2) And your household income has declined by at least 20% since January 2010

(3) Mortgage and other lending of less than €180,000, mortgage lending of less than €150,000

(4) The value of the property is less than €250,000

(5) Total cash deposits are less than €10,000

Then

(1) You get a 48-week, that is, 4-year “umbrella” period

(2) Repayment of debt is limited to 30% of your net monthly income

(3) After the 4-year umbrella, repayments kick back in on the original terms

There are two additional measures

(1) If income is less than €15,000 then the interest rate during the 4-year period is capped at 0.75% over the ECB rate, or 1.5% at present

(2) If you are unemployed then you get an interest holiday during the first 6 months of the 4-year period

The ECB needs to be involved because these measures which are expected to apply to 200,000 households will have a negative impact on the banks, with both reductions in revenues and losses. There is no published estimate of these impacts.

These proposals may be shot down by the ECB, but it demonstrates the Greek government is at least trying to progress solutions, even if they have an impact on the banks. Let’s see how we get on in Ireland at the end of June 2013.

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You will be glad to have confirmed the identity of at least one bondholder to whom we have paid tens of billions. David Tepper has been named by Forbes as the highest earning fund manager in 2012. He, himself personally, was paid USD 2.2bn (€1.68bn) in 2012; yes, he actually earned 2,671 times Pat Kenny’s 2012 RTE fees. Forbes reports “his flagship hedge fund successfully bet on stocks and other securities at key moments in 2012, posting a net return of nearly 30%. His $15 billion Appaloosa Management has been knocking out annual net returns of about 30% since 1993”

And how is David earning 30% annual returns? We don’t have a detailed breakdown but we’ll remember David here in Ireland after his January 2013 performance on Bloomberg TV, when he told the US audience.

“We invested in the Bank of Ireland… and we bought their bonds, subordinated bonds…They [BoI] wanted to ‘cram us down’ … So we took them to court.. We were gonna go into the English and Irish courts to fight the Bank of Ireland, and fight the Irish Government for that matter…We finally won at the beginning of this year… The debt was trading at 40/50 cents…..So the Bank of Ireland this year, goes and issues a new issue, of the same debt…. a month and a half ago….the debt is now trading at 115..The only reason it is worth buying, is because we fought it, and we won”

Here’s the video

Bank of Ireland, the bank into which we have shoveled €4.7bn gross, about €3bn net.

We have no real idea of the bondholders in Anglo, Irish Nationwide, Permanent TSB, EBS and AIB into which we have shoveled €60bn. Yes, there was a partial listing of INBS junior bondholders from Guido Fawkes which Senator Norris tried to read into the Seanad record, and was stopped, but it’s just the tip of the iceberg.

Challenge the government on this and the key defence is “think of the credit unions”, but we know they are suffering circa €15m losses on deposits at Irish Bank Resolution Corporation. The government also claim that because the banks don’t maintain lists and the banks merely pay clearing companies which then make payments to the actual bondholders, that there is no way of knowing the ultimate identity of the bondholders. Well, at least, we know David.

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It is infuriating that secret communications in 2010 on the eve of Ireland’s bailout from the IMF, ECB and EU which were closely guarded back then and whose disclosure in response to Freedom of Information requests has been strongly resisted, are now dropped into conversations as if they were everyday and mundane. We learned during the week that the IMF mission chief to Ireland in 2010, Ashoka Mody outlined three options for Ireland in 2010 – burning bondholders, extending our debt or getting lower interest rates or austerity and the last Government plumped for austerity.

BillyKelleherFF

Today, on RTE Radio’s This Week programme, Fianna Fail’s TD Billy Kelleher (pictured above) who was a junior minister for trade and commerce between 2009 and when FF lost the February 2011 election, blithely commented that back in 2010 the ECB threatened Ireland that if we didn’t enter a bailout programme, then the ECB would withdraw €100bn of lending to our banks. The podcast of the programme should be available in a couple of hours, but there is little to add, and the former junior minister wasn’t challenged about the remarks by the presenter or by the Fine Gael deputy, Paschal Donohoe.

What the former minister stated in a matter-of-fact manner has always been suspected, but the best we could get from current finance minister Michael Noonan was that “a nod is as good as a wink to a blind horse” but even Minister Noonan has been careful to say Ireland was never threatened – “No, no there’s no threat and they never threaten” is what Minister Noonan said in June 2011. Even the plain-speaking and preemptive governor of the Central Bank of Ireland, Patrick Honohan would only refer to the “influence” of the ECB – no suggestion of any threat from Governor Honohan either. Even the Dan O’Brien “the Bailout Boys go to Dublin”, the 28-minute radio programme for BBC Radio 4 available here from Youtube, doesn’t capture the explicit threat by the ECB and indeed the ECB representative to Ireland’s bailout Klaus Masuch, whom Vincent Browne monstered at that Troika news conference last year, asserts it was Ireland that made the bailout choice and there was no pressure from the ECB.

Now we have a minister telling us the ECB threatened to withdraw funding to our banks if we didn’t enter a bailout, which has subsequently seen 10s of billions shoveled into banks and paid to bondholders. Because Deputy Kelleher wasn’t pressed, we don’t know the nature of the threat and how it was treated.

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Following the re-opening of the banks and the apparent agreement of a bailout, Cyprus became page two news, and that is not surprising, because absent accurate up-to-date deposit withdrawal and ECB lending information, we are unable to plot the graph to see whether ECB support for Cypriot banks is reaching unacceptable levels. This lock-down on information was discussed here previously and unless the ECB provides information on its level of support, the first wemight  know about how critical things are, might be when the ECB withdraws funding. Out TV screens are no longer filled with ATM queues nor loud protests outside the Cypriot parliament nor worried looking European and Cypriot politicians.

There is some hopeful news yesterday with some capital controls being eased with interbank payments under €300,000 no longer needing approval and international transfers raised from €5,000 to €20,000 but the daily cash withdrawal limit remains at €300.

But another threat to the Cypriot economy has now emerged with news that the country needs a €23bn bailout rather than the €17bn previously slated; I notice that the previous figure is now being put at €17.5bn as if that will minimize the increase! There is no indication that the external bailout Troika of the IMF, ECB and EU is willing to provide more than €10bn which leaves a funding requirement of €13bn for Cyprus itself, and €13bn in an economy with a GDP of €18bn is not pocket-change – Ireland with an economy of €160bn contributed €17.5bn to its bailout and all of that was in the national rainy day fund, the pension reserve.

The BBC reports that raiding deposits over €100,000 at Laiki and Bank of Cyprus might raise €10.6m. There is now talk about Cyprus selling its “excess” gold reserve worth €400m and previously there was talk of privatization proceeds of €1.4bn. How confident though would you be that a bailout requirement that has risen by 35% in a month, mightn’t rise by another 35%, particularly with what pseudonymous Pawel Morski, a London fund manager, calls “dementedly optimistic”, the assumptions about the Cypriot economic outlook – that blogpost contains links to the leaked bailout documents and is worth a read. Perhaps we will get some enlightened thinking in Dublin today and tomorrow when European finance ministers and central bankers are meeting to discuss the Euro crisis, bailouts and all that.

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Press Conference of the Week

MarioDraghi

I’m still scratching my head, and I don’t think I’m the only one. At the ECB press conference on Thursday, the president Mario Draghi was predictably asked about developments in Cyprus. But not once was he asked how much support was now being provided by the ECB to Cypriot banks. Just before the original bailout proposal mid-March 2013, the ECB is understood to have loaned €9-10bn to Cypriot banks. Then there was the scarifying proposal to tax all deposits, even small ones, at 6.75-9.9%. And the banks were closed for 12 days. And then we learned that credit card spending didn’t count as a deposit withdrawal, so you could have bought a Lamborghini on your credit card for €300,000 whilst the banks were closed and then told the bank that your €400,000 deposit was completely safe because once you deducted the €300,000 credit card charge, your deposit was below €100,000!

But not one questioner asked Mario about the level of ECB support, so we’re still in the dark about where we are on the graph of ECB financial support intersecting with danger-level support to banks so illiquid that they are doomed to insolvency. The Irish Times reporter was present and confused the bejaysus out of the Italian with a rambling question, which looks clearer on paper than it was when asked. And you had keyboard warriors turning up for the first time, with questions asked on behalf of ZeroHedge to which an exasperated Mario responded

“You are asking questions that are so hypothetical that I do not have an answer to them. However, I may actually have a partial answer. These questions are formulated by people who vastly underestimate what the euro means for the Europeans and for the euro area. They vastly underestimate the amount of political capital that has been invested in the euro. And so, they keep on asking questions like “if the euro breaks down” and “if a country leaves the euro area tomorrow”. The euro is not like a sliding door, it is a very important thing; it is a project in the European Union. So, that is why you will have a very hard time asking people like me “what would happen if?” There is no plan B. In addition, I think the ECB has shown its determination to fight any redenomination risk, and OMTs, with their precise rules, are there for this purpose. So, that is the answer to the first question. The second question was about ELA, but again, it is related to “if Cyprus leaves” and we do not have that in mind. There is no plan B.”

Philanthropist of the Week

KW

“Seed capital for the project is being provided by international real estate investment and services company, Kennedy Wilson on a philanthropic basis.” Dublin City Council announcing a €60m development of Parnell Square into a “cultural quarter”

It seems that Denis O’Brien has a competitor in the cut throat world of international philanthropy. Yesterday, Dublin City Council announced that our new best friends, Californian real estate investment company, Kennedy Wilson is providing €2.5m seed money “on a philanthropic basis” for the €60m redevelopment of the north part of Parnell Square, in Dublin city centre into a cultural quarter. Kennedy Wilson has been buying Irish property and loans at a rate of knots in the last two years and now sits atop a portfolio that includes the Allianz building off Barrow Street – the 210 apartments in the donut shaped development in the old gasworks for which it paid around €40m and it bought for €108m the loan underpinning Liam Carroll’s State Street building and adjoining land on the south quays in Dublin’s docklands. According to the Clinton Trust, Denis J O’Brien is a contributor of USD1-5m in 2012 and Denis was described in court filings reported on here as “leading Irish entrepreneur and philanthropist”

Image of the Week

In keeping with the religious context of filing for bankruptcy late on Good Friday, Sean Dunne used language last heard in Galway in 1979 when he addressed “People of Ireland” in an open mike platform provided by the Sunday Independent last weekend (even a blog wouldn’t be that generous, editorially). The image of Sean in his three-piece suit and Barney-the-Dinosaur tie amidst the skyscrapers on Fifth Avenue didn’t win him sympathy, but then again, why should Sean be seeking sympathy from a country which hasn’t yet learned to handle business failure. Sean’s claim, though, that taxes and levies paid during a lifetime of property development meant he was even-stevens with the nation despite a €185m judgment in favour of NAMA, did rankle with people generally.

(Graphic above produced by Japlandic.com, contact here)

Schematic of the Week

IllegalPromNotesforSovNAMABonds

This is how the IMF represented the promissory note deal effected in February 2013. You can clearly see the €27bn of promissory notes which we were due to pay down over the next 18 years, and these have been replaced with a mix of sovereign bonds and NAMA bonds. The NAMA bonds are an advance payment for loans that may be coming NAMA’s way later in the year. If David Hall’s challenge to the legality of the promissory notes were to have succeeded, then the decision to exchange sovereign bonds for illegal promissory notes may go down as the worst single economic decision in the history of the State.

Game of the Week

NoelKelly

RTE Bingo. This is a brand new game and involves players printing off their own bingo cards by going to the websites of the main talent agencies in Ireland and printing off a list of the “stars” represented by that specific agent, for example, Noel Kelly manages many of Ireland’s top stars. You then watch your favorite RTE shows to see what “star” has another “star” from the same stable on their show. The show was inspired by Ryan Tubridy, pictured below next to what his agent would love to be his future incarnation, Henry Kelly who used work for the BBC as a presenter and DJ – kinda what Ryan does now in fact. Last week, Ryan presented the Late Late show as usual on RTE 1 and it is the first time in many years that I have seen it,  partly because RTE had a couple of days previously released its presenters’ salary details which showed Ryan now on €495,000. And lo and behold, amongst the various advertorials for records and gigs, some other presenter turned up who didn’t seem all that newsworthy and certainly didn’t seem to be plugging anything in particular, and it turns out that Maura Derrane is a stablemate of Ryan’s at Noel Kelly management. Someplace, Noel Kelly must have been rubbing his hands with a €495,000 presenter on national TV promoting another of his presenters, making it easier for him to negotiate both their contracts on which he gets an estimated 15%. There’s no fixed prize for getting a full house, but morally you might consider the talent agency owes you something.

LankyStreaksOfPiss

Car of the Week

VolkswagenGolf

The Volkswagen Golf was the best-selling car in Ireland during the first three months of 2013, according to the Society of the Irish Motor Industry, which issued a statement this week revealing that new car sales were down 14% in Q1,2013 compared to the same period last year. Sales in the month of March 2013 were down 10%. The best-selling marques were Volkswagen, Toyota and Ford and the best-selling models, the Golf, Nissan Qashqai and Ford Focus.

Word of the Week

Marriage” (©, used with permission from Susan Philips who claimed the word belonged to her during a debate on gay marriage on RTE Prime Time this week). Putting gay marriage on the same footing as traditional marriage is a knotty issue is many countries, the US, the UK and now Ireland. Here, the Government had thought it had kicked the issue into the long grass by passing the parcel to the Constitutional Convention, but it looks as if it will be reporting its recommendations on the matter imminently, and with a (small) majority nationally in support of gay marriage, it seems that we are to have change here soon. And as elsewhere, there is resistance and during the week, we were treated to the kind of debate which might become commonplace in the not-too-distant future. The matter was discussed on RTE’s Prime Time, available here on RTE Player, in which “political analyst, community activist, agribusinesswoman” and now, opposer of gay marriage, Susan Philips memorably claimed marriage as “our word”, presumably meaning traditional couples.

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Tom Lynch – pictured here – the former Principal Officer in, what was the Department of Justice, Equality and Law Reform and who was appointed in 2006 to run, what was then the National Property Services Regulatory Authority, has failed to deliver again. We were supposed to have a register of all post-Jan 2010 commercial leases by the end of March 2013, but there is absolutely no sign of it, and a request for comment sent to the Property Services Regulatory Authority over the weekend has not been responded to. There is no message on the PSRA website indicating a delay.

The bould Thomas has a history of late delivery. In November 2011 he told the Irish Times in relation to the residential property price register that it would be online by June 2012. In the end, we got a surprisingly basic register at the end of September 2012, and people are still picking errors out of it.

The March 2013 deadline for fulfilling what is another Troika demand to make the Irish property market more transparent, had been signposted for some considerable time, and Minister for Justice and Equality Alan Shatter has been frequently asked about it in the Dail – for example here and here and here, and when most recently asked about it in the Dail, Minister Shatter indicated that we might be seeing details of up to 20,000 commercial leases.

When this Government says that it has met all the targets in the 2010 bailout agreement with the Troika, that’s not totally true; some targets were deferred  in agreement with the Troika and some were missed, like the introduction of personal insolvency legislation. So, Thomas isn’t just not delivering in his own organization but he puts in jeopardy the delivery of terms under the bailout agreement.

Developments will be monitored on here.

UPDATE: 5th April, 2013. The Property Services Regulatory Authority has responded to say the database will not be launched “until the end of May 2013”

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The news from Cyprus on Thursday suggests that banks, which opened for six hours for the first time in 12 days, experienced brisk business but there was no panicky mobbing of the banks with depositors breaching public order in attempts to get at their money. The sense imparted through the media is that there was a strong expectation of a visible meltdown, but it just didn’t transpire, which tends to augur well for the future of Cyprus.

According to commenter John Gallaher who was keeping a close eye on the comings and goings at the Fitzrovia, London branch of Bank of Cyprus on Thursday, the London branch was busy and it seemed there was a steady stream of people making withdrawals.

So, how much money  is leaving the Cypriot banking system at present? We just don’t know and you can bet that neither the central bank in Cyprus nor the ECB will offer up this information, unless it portrays a positive message. Like our own central bank here in Dublin, the central bank of Cyprus produces monthly banking financial information, and the latest available is for the end of February 2013 which was published this week, but I cannot see in it details of ECB support for Cypriot banks. Old media reporting suggested that the ECB had lent €9-10bn to Cypriot banks two weeks ago. Haircuts on certain deposits will reduce liabilities in banks’ balance sheets which should also reduce reliance on ECB funding, but deposits flying out the door will do the opposite and force banks to seek alternative sources of cash.

The view on here is that €500m per day may have been exiting Cypriot banks during the 12 day shutdown. But who knows? The central bank of Cyprus and ECB, probably, but they’re staying schtum. If the withdrawals had been modest, I would have expected a statement to that effect. So there appears to be a lockdown in effect on information.

We found out on Thursday that the haircutting of deposits in Cypriot banks might be illegal and unconstitutional.

OhOoooh

We also found heard allegations of shenanigans yesterday in Greek newspapers alleging that Cypriot banks had written off millions of euros in loans to, amongst others, Cypriot politicians. Cyprus is regarded by Transparency International as the 29th most honest county in the world, that’s just four spots below Ireland at position 25, so Cyprus is no clear-cut banana republic.

We are in the dark over precisely what capital controls apply in overseas branches of Cypriot banks, with a request for information and comment from here last week, met with a meaningless response.

Al Jazeera is reporting that “Bankers have told Al Jazeera that they will only penalise depositors once all their liabilities have been offset against their assets.” In other words, rack up as much expenditure as possible on your credit card and you can offset that against your deposits. I wonder how many Lamborghinis have been purchased on credit card in Cyprus in the past fortnight? After all, if you have a €400,000 balance at Bank of Cyprus or Bank Laiki, it would make sense as you are facing wipeout of deposits in excess of €100,000.

It remains to be seen if we will see information released by the banks. It seems Cyprus has a weak media and political opposition so idiosyncrasies over the implementation of capital controls are unlikely to be closely examined. Our experience in Ireland has told us that people are reluctant to pursue legal challenges to attempts to deal with the financial crises.

So, all of this may blow over. But I wouldn’t bet on it.

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Risky business of the Week

At midnight on Thursday, the Eligible Liabilities Guarantee from the Government to Bank of Ireland, AIB/EBS and Permanent TSB expired, which meant that depositors with deposits in excess of €100,000 would no longer be covered with the deposit guarantee on the excess, though they still enjoy a guarantee on deposits of less than €100,000. We learned that just before the ELG expired, Bank of Ireland issued €5bn of bonds and Permanent TSB issued €3.065bn; in both cases, the issues were artificial in that both banks issued bonds to themselves that can be exchanged for cash at the ECB until 2015. AIB didn’t issue anything with its spokesperson Niamh Hennessy saying “AIB’s liquidity position is healthy” and that AIB didn’t want to issue bonds which would incur guarantee fees payable to the Government. As Cyprus remains on the brink of the abyss, withdrawing the ELG this week was risky for the Irish government, though as we saw in Cyprus, guarantees ultimately aren’t worth the paper they’re written on when governments are pinned to the collar.

Carrigsodom and Ballygomorrah of the Week

FootFetishistsNirvana 

Some light relief this week when we learned the Department of Health was providing €124,000 annual funding to a charity which supports 16-24 year olds; the range of services provided by SpunOut.ie is impressive, ranging from advice on mental health to drugs to life skills, but all focus this week was on its skinny repertoire of sex advice, and particularly its advice on threesomes. Having been predictably discovered by Sindo sex expert Niamh Horan, no time was wasted in getting offended comment from Fine Gael’s straitlaced Michelle Mulherrin and hey presto! you had a scandal. Liberal champion Colette Browne used her column in the Irish Examiner to defend the charity whilst critically evaluating the advice provided on threesomes. The title of her column? “Threesomes are sleazy, but let’s not get our knickers in a twist” But “knickers”? What knickers? In Carrigsodom and Ballygomorrah, do we even wear knickers anymore?

Crackdown on Cheek of the Week

MartinCallinan

“Showing disrespect to the minister of the day or to the commissioner of the day is not on, as far as I am concerned and I don’t expect it from either a member of sergeant or garda rank” Commissioner Martin Callinan speaking after criticism of Minister Shatter and of himself by the AGSI this week where four sergeants from Carlow and Kilkenny walked out during both addresses and afterwards provided expressions of “no confidence” in either Minister or Commissioner. The usual form of protest previously was giving the minister “the silent treatment”, criticism of the Garda Commissioner is unprecedented. The Gardai are not happy about cuts in resources and pay, and see the Commissioner as an extension of the political establishment that is now attacking the force. The four officers claimed they had a mandate from their members to mount the protest in the manner exhibited, and the four faced the possibility  disciplinary proceedings for their troubles, after the protest.

As the week drew to a close, and after an informal disciplinary hearing in Templemore, the four sergeants claimed that although they stated they hadn’t confidence in the Commissioner, that was not in fact their personal view, but the views of the people they represented. A statement was issued to the effect that both sides now regarded the matter as closed. Except, there is a third side in all of this, the general public which has seen calculated insubordination by Gardai who are genuinely at their wits end with balancing their incomes.

Doublespeak of the Week

247FrontLineAllianceCuts

The 24/7 Frontline Alliance this week produced what it called an “actuarial report” on pay cuts proposed under Croke Park 2. It indicated that workers earning less than €65,000 faced cuts of up to 11.4% for a staff nurse down to 3% for a firefighter.

HowlinCuts

On the other hand, when the Minister for Public Expenditure and Reform, Brendan Howlin was recently asked in the Dail for the pre- and post- Croke Park 2 gross salaries and allowances, he merely said that those earning less than €65,000 would continue to earn the same. I tend to believe the 24/7 Frontline Alliance in this.

Easter Egg of the Week

Given the weekend that’s in it, you might like to know why you may be seeing A LOT more chocolate bunnies wrapped up in golden foil this weekend. Lindt, the Swiss chocolate maker has just lost a trademark infringement case where it claimed exclusive rights to the familiar Lindt chocolate bunny and it objected to rivals flogging their fattening fare in similar attire. So you’ll be seeing a lot more colonies of golden bunnies, like these ones from rival Italian chocolate company, Ferrero Rocher

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Coalition partner of the Week

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This was the election leaflet produced by the Labour party in the Meath East by-election which was held this week, and where Fine Gael’s Helen McEntee romped home whilst coalition partners Labour saw a 78% collapse in their vote from 21.04% at General Election 2011 to just 4.57% this week. Labour’s man lost his deposit and must shoulder his expenses. The election leaflet above is said to have rankled amongst coalition partners, but in the end, it just didn’t matter as Labour was wiped out. Poor Aodhan O’Riordain, the Labour TD in Dublin pulled the short straw to appear on the Vincent Browne show on Thursday night – see screengrab below, left – to defend the indefensible. Fine Gael’s Damien English from Meath West who was Helen McEntee’s election manager could hardly contain his mirth, though he eventually composed himself to say with a straight face that he didn’t think Meath East was reflective of attitudes to Labour nationally.

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Crime of the Week

MixedAndCertainlyNotAnarchy 

This was the week when the Central Statistics Office issued annual crime figures for 2012, together with a comparison with 2011.  Overall, crime is down, but as is usual with these annual reports, there were varying results with murders, sexual offence and burglaries up slightly and big declines in assaults, dangerous acts, damage against property, public order offences and offences against the government. Critics of the Gardai will zoom in on burglaries after a spate of well-publicised rural burglaries, many aggravated.

Table of the Week

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One of the common reasons cited for the introduction of the local property tax or “family home tax” as Sinn Fein call it or the “bankers bailout tax” as People Before Profit call it, is that the money collected will be used in local areas. This is a load of rubbish. The Government funds local authorities to the tune of €2bn per annum, and what is going to happen is the Government will reduce local authority funding by the amount collected. The only truth in this is the Government needs to collect more in tax to plug a deficit and “expanding the tax base”, “introducing a stable recurring tax”, “funding local services” are hogwash.

Baby boom of the Week

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It seems that Ban Gardai are getting more and more pregnant. Figures released by the justice minister, Alan Shatter last week show that in 2011 there was a 20% increase in the number of Gardai that availed of paid maternity compared with 2010. And so far in 2012, we are on track for a 16% increase over 2011. The projected numbers seeking maternity leave in 2013 are 384, up from 330 in 2012 and just 273 in 2011.

We’re open (but) of the Week

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Cypriot banks opened for six hours on Thursday for the first time in 12 days. In Cyprus, there was brisk business but the banks weren’t mobbed as feared. We still don’t know the rate at which deposits in Cypriot banks are being depleted, and the last information from the secretive ECB was that it had advanced €9bn in emergency lending, and that was two weeks ago before the banks closed. On Thursday, the above was the message greeting Bank Laiki customers, who it is believed, will see the excess of €100,000 in their deposit accounts wiped out entirely, or if not, they’ll have to wait years to get anything back. Those with less than €100,000 are untouched. Well, except for the capital controls that have been “temporarily” imposed and these are the restrictions that currently apply in Bank Laiki.

TV royalty of the Week

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RTE strategically published the salaries of its Top 10 presenters this week. Pat Kenny is top of the heap with €630,000 though he faces an imminent renegotiation of his contract, assuming RTE wants to continue the relationship of course. Oh, and assuming the 65-year old Pat would want to continue with RTE, but then again, where else would he go? When the old media went looking for comment after the revelations, the RTE presenters went to ground as the fog of the Easter holidays moved in to offer temporary respite. What we received this week were the top salaries of presenters, we still don’t know the top salaries for RTE management of course, but we do know that in its last published accounts for 2011,  including a €50m charge on its pension fund – that loss is equivalent to €61 for 1.147m households that each paid RTE €160 or €183.6m  in total licence fees in 2011. In a crisis-hit Ireland in 2013, these salaries are unforgivable, and both RTE management and the presenters will be held to account when the fog clears after Easter. We still don’t know how much RTE presenters earn in extracurricular activities, like penning memoirs, after communications minister Pat Rabbitte abnegated responsibility for RTE this week,  but we finally got the RTE policy for staff  which sets out the rules on competing with RTE

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and gifts.

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So I guess the RTE policy allows you to accept five hardback books one day, five concert tickets the next, a “moderately valued” product or service from a business promoted the next day, five CD albums the next day and at the weekend some promoted business might be good enough to take the kids off your hands with weekend jobs. As long as the gifts don’t come from the same source and are notified to RTE management, then you’re golden.

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